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- By Parmjeet Parmar, Pakuranga-based ACT List MP
A positive change for employers (and for the cost of living) is now in effect.
The Accredited Employer Work Visa (AEWV) helps approved businesses hire skilled migrants in sectors with genuine skill or labour shortages.
This visa is useful for employers but has required some adjustments from the new Government.
The Labour Government’s settings forced employers to pay AEWV workers a minimum wage of $33.56 (officially, the median wage).
Of course, many migrants would happily come to New Zealand to work for a lower wage.
However, employers were forced to pay these migrants more than many of their Kiwi colleagues. This created several issues.
Local workers may find it unfair that their migrant colleagues are paid higher wages.
This puts employers in a difficult position, especially for businesses that are only marginally profitable.
Anecdotally, I’ve heard of employers pressuring migrants to work additional hours “off the books” to justify their artificially high wages. This risks exploitation.
Moreover, artificially high wages increase costs for businesses, making some unviable or unable to invest in new activities that could boost productivity and employment.
I’m glad to confirm the median wage rule has now been removed for AEWV workers, so they’re subject to the same minimum wage as Kiwi workers.
This is an ACT commitment, now made reality. Of course, the minimum wage itself can present challenges for employment when not managed well.
ACT’s Brooke van Velden is the Minister responsible for setting the minimum wage.
Politicians in her position are always faced with pleas to increase the minimum wage.
However, when businesses are forced to pay employees more than the value produced by their labour, they face a difficult choice: either cut back on minimum-wage roles or pass on costs to consumers.
New Zealanders rightly expect the Government to tackle both unemployment and the cost of living, and these are good reasons to avoid big hikes to the minimum wage, which currently sits at $23.15.
So, for the second year in a row, the Minister has resisted calls from unions to hike the minimum wage above the rate of inflation.
A small 1.5 per cent adjustment in April will increase the minimum wage to $23.50.
This shows sensitivity to the pressures on businesses, which faced years of significant minimum wage increases under the previous Labour Government.
By acknowledging the economic realities of wages, we’re easing costs for employers and customers.
