April increase will impact staff 'at every level, not just those on the minimum'
Retailers across New Zealand have revealed that the latest wage hike announced by the government will have an impact on employee headcount and working hours.
A survey by Retail NZ revealed that 57% of retailers will reduce the work hours available to their teams, while 41% plan to reduce staff numbers to remain afloat following the wage hike.
A bigger 69% said they are planning to increase retail prices, a fifth of retailers said they are eyeing reduced store hours, while 17% are considering shutting down entirely, according to Retail NZ.
"In many cases, businesses will undertake a combination of these actions. These are concerning results from a sector that, on average, pays well above the minimum at an average of $26.65 in 2022," Retail NZ said in a media release.
Overall, 88% of the retailers surveyed by the association expressed disapproval on the government's move to hike wages.
It comes as 59% of retailers said last year that wage increases had the biggest impact on their business, just behind inflation at 61%, according to Retail NZ's quarterly report.
'Relativity is important'
Retail NZ was among the industry bodies that expressed disapproval over the government's announcement to hike the minimum wage to $22.70 per hour starting April.
In its survey, retailers said that the wage hike will impact employees "at every level, not just those on the minimum."
Prime Minister Chris Hipkins previously said that the wage hike's impact on inflation is "negligible," adding that it is not likely to have a significant impact on unemployment.
"Relativity is important and expected for everyone on our team," one retailer said.
"Most of my staff are paid above the new minimum wage, but they too, will expect an increase to maintain the differential. That's where the expense comes in. Don't think the government understands the expectations of employees already above the minimum wage," another retailer added.