OPINION: Minimum Wage to $17.70 on 1st April 2019

I am all for people earning the best wage or salary they possibly can. That said I have concerns about the decision to increase the minimum wage to $17.70 from 1st April 2019 which will have an impact on some businesses.

Whilst the current government has an ambitious strategy around its minimum wage objectives, I am concerned by the broader ramifications that these decisions may have, not only for the business community (particularly small businesses) but also for potential job seekers, particularly those falling into certain age demographics.

For businesses such as manufacturing operations, decisions will inevitably be made to reduce their staff levels as a way to ensure costs are contained. Alongside this process, businesses will speed up the implementation of automation and other technologies to reduce their dependency on people and the associated impact of continued wage growth. Fundamentally this means that it is quite possible for less people to be employed across various industries – that is on the back of rising unemployment rates in certain geographical areas.

From my experience, selecting people straight out of school is becoming less attractive to employers. Further education is often encouraged but is not for everyone. Some young people just want to gain a job and some independence. Unfortunately with this demographic having a limited skill base and often no experience, their prospect of finding any job let alone one that provides a positive challenge for them, will be even more difficult. Prospective employers will simply not want to pay them at the level of the increasing minimum wage.

I have no doubt that people, particularly families with dependents, may struggle to keep their head above water in the current environment, however I would much rather see a system implemented where those who are vulnerable, such as our youth, can earn a wage that allows them to gain some valuable experience at a level that the business community can afford. That ultimately will provide value and benefit to a variety of stakeholders.

In conclusion and only in my opinion, while continually increasing the minimum wage sounds like a positive for the general population, I am concerned that ultimately opportunities for more vulnerable job seekers may actually be further reduced!

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