Employment Relations Assignment (Solution)

Running head: Employment relations
Employment relations

Employment relations 1
Question: Why the minimum wage rates in New Zealand considered in need of change?
Answer: The workers work for some payment in return for the work or services performed by
them. The employers must abide by with the laws governing the minimum wage claims for all
the workers comprising of adults, starting out workers, trainees and disabled workers.
The minimum wage rates apply to all the workers with age of 16 years and above, comprising of
full and part time, casual, working from home, fixed –term employees and who are paid wages ,
salaries and commission and piece rates (Employment New Zealand ,2018).
The wage rate in New Zealand is governed by Minimum Wage Act 1983. The minimum wage
rates have been increased from $16.50 per hour and $ 660 for 40 hours per week. The reasons for
the increase in the wage rates are that the purchasing power of the citizens of New Zealand has
been decreased by 23.9 %. To enhance the living standards of the citizens of New Zealand, the
government has increased the minimum wage rates.
Additionally, to increase the Gross Domestic Product of the Economy, the government should
increase the minimum wages. Since the monetary compensation given to labor and their
spending habits shall increase the purchasing power so higher minimum wages would create
more demand for goods and services which boosts the economy.
Another reason for increasing the minimum wages is to increase the productivity of the
industries. Since higher wages insist the business to employ more productive resources such as
effective equipment and machinery which would make them competitive on a national and
international level. It also helps to keep in pace with the inflation as the annual inflation rate in
New Zealand is 0.1 % and increase in the minimum wages by 3.4 % shall help the workers with
sufficient money for their survival (Library of Congress,2016).
So, to conclude, the minimum wages should be increased to ensure the economic progress of the
employees, employers and of the country as well.

Employment relations 2
References
Employment New Zealand (2018). Pay and wages. Retrieved April 30th, 2018 from
https://www.employment.govt.nz/hours-and-wages/pay/
Library of Congress (2016). Global Legal Monitor. Retrieved April 30th, 2018 from
http://www.loc.gov/law/foreign-news/article/new-zealand-minimum-wage-to-increase-to-15-25-
per-hour/