Just how much it will help, however, is less certain.

At 6%, the increase is in line with the 5.9% annual rise in the consumer price index (CPI) in the December 2021 quarter. But inflation is still rising, with domestic and global pressures meaning it's likely to keep rising for some time.

Those minimum wage gains, along with simultaneous increases to other benefits and superannuation payments, are already eroding.

The food price index rose 6.8% in February from the previous year. International commodity and oil prices have soared since the Russian invasion of Ukraine. Some estimates suggest an annual CPI rise of between 7% and 8% in this year's March quarter.

It's clear that low-income households will continue to struggle to keep pace with the rising cost of living. For that reason, the minimum wage increase must be accompanied by other support measures, and not viewed as a solution in its own right.

Minimum wages and employment

In fact, there are those who don't see a minimum wage as being productive at all.

One school of economic thought proposes that minimum wages actually undermine job creation by making employers avoid paying for more expensive labour at the same time as encouraging more workers into the job market.

This view was articulated by Nobel laureate economist George Stigler, who wrote in 1976:

One evidence of professional integrity of the economist is the fact that it is not possible to enlist good economists to defend protectionist programs or minimum wage laws.

But other economists have argued against this - for example, David Card and Alan Krueger, who published several controversial empirical works in the 1990s finding that increasing the minimum wage doesn't necessarily lead to fewer jobs.

Not everyone agrees with Card and Krueger, however. David Neumark and William Wascher evaluated the evidence and argued minimum wages do reduce employment opportunities for less-skilled workers, "especially those who are most directly affected by minimum wage".

So, there is no real academic consensus on minimum wages - and not even much agreement on what the research literature really says.

Effects on poverty

Given all this, perhaps the better question is whether minimum wage policies reduce poverty overall. But again, the research has been contradictory.

In one New Zealand study in 2012, researchers found that minimum wages do not guarantee that people will escape poverty. Another study using Irish data also concluded that minimum wages may be "a blunt instrument" for tackling poverty.

On the other hand, a 2021 US study found significant positive employment effects for single mothers with aged children five and under, suggesting minimum wages at least have potential as a policy instrument for reducing child poverty.

This is particularly relevant in New Zealand for two reasons: one in five Maori children and one in four Pasifika children meet the criteria for material hardship, and Pacific people and Maori represent 10% and 20% of minimum wage earners, respectively.

Minimum wage just one tool

What does seem clear is that minimum wage policies are most effective as part of a complementary income support bundle, as some overseas research has shown and which was supported by a comprehensive review of minimum wage policies in New Zealand.

Examining the effects on various economic outcomes since 2000, the authors argued that minimum wage policies should be "designed and evaluated in the context of other income support policies".

Those other supports include the Families Package introduced in 2018, which included an increase to the accommodation supplement, designed to help low-income earners with rent, board or mortgages (but is not available to those in public housing).

The same authors recently investigated the impact of increases in the maximum accommodation supplement rates to see if these had simply been swallowed by rising accommodation costs.

Their findings were encouraging: more than 90% of the increase in assistance was captured by the recipients as an increase in after-rent income. A minimum wage policy has a greater chance of success when coupled with successful support policies such as this.

But it's important that such complementary policies are synchronised, especially given that only some other social policies, such as Working for Families, are inflation-adjusted.

Getting the mix right

Elsewhere, these policy combinations have been effective. In the United States, for example, the Earned Income Tax Credit (EITC) - as its title suggests, a refundable tax credit similar to New Zealand's Working for Families policy - has been shown to benefit low-wage workers and families in combination with a modest increase in the minimum wage.

Again, the combination of policies works better than either in isolation, and some recent studies suggest EITC expansions and minimum wage hikes should be thought of in tandem as complementary policies.

However, one of the big challenges of integrating minimum wage settings with other policies is that each tool affects many economic outcomes. What should be the optimal level of minimum wages? How do minimum wage hikes interact with other supporting policies?

While there have been some official efforts to measure the relationship between the minimum wage and other state interventions, this needs to go further in order to find the right policy mix - especially during a year that will see continued high inflation, low growth and economic uncertainty.

• Murat Ungor is a Senior Lecturer in Economics at the University of Otago.
• First published in The Conversation. Republished with permission.

21-year old Fereti Maiava wants to plan his future and that of his young family properly.

He told Village Voice that family and church obligations are a big problem.

"When it comes to family faalavelave, church and villages donation it cost us lots of money. But it's a must to do it."

Fereti does not have a job.

"I am looking for a job but in the meantime we have a plantation to earn our food and money."

"Hopefully one day I'll get a job so that I can give my family the best life."

40-years-old Samuelu Soso has a job as a security officer but he told Village Voice with the minimum wages, people are struggling.

"People with minimum wages like us can only pay for food and other small things but for fa'alavelave and huge contributions this is when we consider doing loans."

56-year-old Sefo Pesamino's worst fear is not being able to help his family - especially his children.

When village Voice visited him he was hard at work in the plantation. He told Village Voice "I do this for my family and my children," he said.

Sefo has been a farmer since a young age.

"I have worked at planting taro, banana and more for a long time," he said.

"This is where my children are provided for financially until they are old enough to have their own families."

Sefo says life is a struggle but people have just got to learn to manage.

"The problem is when I don't have money sometimes," he said. "When that happens, I feel like I've neglected my family."

"There are times when I get angry at myself for not having a job to provide but I accept that this is who I am and what I do best."

Source

• samoaobserver.ws
• sobserver.ws
• sobserver.ws
• Image: oxfam.org.nz

Report author Cathy Bi said the story that struck her the most was of a girl who worked a shift at a restaurant, but was not paid because her employer told her it was only a trial.

The girl stood up to her employer and won, Bi said.

"What she communicated to me, is that this isn't common for her friends to stand up to the employer, but it is common for employers to say 'Oh we don't pay for this period' or 'We don't give contracts'".

The report was released at a Thursday evening seminar in Wellington: Unfair treatment of migrant workers - what can we do?

It has been produced to help the Church community to understand the experiences of migrant workers.

Many people who move to New Zealand to work have positive experiences their workplaces.

But the study reveals that some migrants working in Wellington experience unfair treatment and unreasonable working conditions.

It is hoped that the report will put a spotlight on barriers that prevent people from asking for help.

Caritas Aotearoa New Zealand director Julianne Hickey says, "Holding employers accountable to good employment practice is a responsibility that sits with everyone."

The study says migrants can be assisted through clarifying basic employment rights, referring them to accessible legal experts, and helping them to look for alternative work.

"It cannot be up to migrant workers alone to report cases of poor employment practice, and our research shows that having a good support person in the community can bridge several of the gaps and vulnerabilities that migrant workers face," Hickey said.

The findings are based on a small-scale qualitative research project about migrant worker experiences that was undertaken by the social justice agency in the Wellington Catholic Archdiocese.

Caritas spoke to 14 people, including migrant workers, unions and lawyers, between April and June this year.

Source

• scoop.co.nz
• radionz.co.nz
• Image: new-zealand-immigration.com

The Catholic council lodged a claim in Australia's Fair Work Commission that the national minimum wage be set at A$669.60 a week.

The council's proposed increase is more than double the amount major employer groups have argued for.

Industry groups argue such an increase would lead to job losses.

ACCER chairman Brian Lawrence said its claim is based on the need for the national minimum wage to provide a decent standard of living for workers with family responsibilities.

"The claim of A$669.60 per week will not be sufficient to achieve the living wage objective, but it is a modest and realistic step in that process", Mr Lawrence said.

The Catholic Church is one of Australia's largest employers.

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Former wages council chairman and poverty alleviation advocate Fr Kevin Barr has welcomed the Fiji government's announcement that the country's minimum wage rate at has been set at $2 per hour. However he thinks it it should be closer to $4.00.

In a Statement Barr said:

• The new rate would cover about 20 per cent of Fiji's working population, those not covered by unions or wages councils.
• The $2 per hour rate would benefit domestic workers, gardeners and farmers.
• The national minimum wage should be measured against the national poverty line which would be around $190 a week. This would mean that the national minimum wage should be around $4 to $4.20 an hour.

Both unions and employers also thing it's too low for people to live on.

But Usamate says some workers have actually been earning less, and he expects the minimum wage will eventually rise.

Source

• The Fiji Times
• Radio Australia International
• Image: ABC News

Based on the findings of the National Minimum Wage Baseline Survey, two dollars and thirty two cents an hour is now the proposed minimum wage.

Barr says the new proposed rate is a good start. "This is a transitional arrangement and I think it is a good start, I think it is excellent but hopefully it is not the final one. And as he (survey consultant) envisaged every two years - this will be re-visited and the formulas will be used again and perhaps strengthened a little bit."

Source

• The Fiji Times
• FBC
• Image: Radio Australia International