NZ to increase wages for migrant workers in 2023

However, employers express concerns around staffing shortages and business costs

NZ to increase wages for migrant workers in 2023

Wages for migrant workers will be hiked to $29.66 in late February 2023, according to the New Zealand government – and businesses are crying foul.

"In line with existing policy, I also confirm today that the new median wage of $29.66 per hour will be adopted into the immigration system on 27 February 2023," said Immigration Minister Michael Wood. "All wage thresholds indexed to the median wage, such as sector agreements, will also be updated."

The announcement came alongside government measures targeted to support the hospitality and tourism sectors to alleviate the effect of the labour shortage felt by employers. One of these initiatives include the removal of the qualification requirement for chefs before they are hired through an Accredited Employer Work Visa (AEWV), according to Wood.

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The minister said that while the New Zealand Certificate of Cookery (Level 4) or equivalent qualification was introduced to reduce wage and job inflation risks, they heard from the industry that the requirement was "limiting their options to recruit chefs who do not hold formal qualifications."

"Employers hiring chefs will now only be required to meet the median wage and market rate requirement, enabling employers to recruit from a larger pool of migrant chefs," Wood said.

Businesses react

In reaction to the new wage hike, BusinessNZ chief executive Kirk Hope said increasing wage thresholds for international skills and talent is "unnecessary and will feed inflation."

"In the current environment of extreme skill shortages, high inflation, negative net migration, and ongoing global supply chain constraints, further wage pressure on employers announced today does not support the economic recovery businesses are working hard to achieve," Hope said in a statement.

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According to Hope, while BusinessNZ welcomes the measures to alleviate severe skill shortages for restaurants, cafes, and other industry members, the combination of increased costs faced by the sector like food, wages, and rent will make it a "risky business to be in unless consumers can afford to pay more."

"The border has been open less than three months and government continues to change the rules on productive and resilient New Zealand businesses and public service organisations. Our current workforce simply doesn't have the people or skills required," Hope said. "That's why correct and welcoming immigration settings are critical as more New Zealanders leave the country."

Read more: NZ to hike wages for trainee GPs to lure more talent

The Federated Farmers also warned that hiking migrant wages will have a domino effect on the prices of goods purchased by Kiwis.

"Our concern is that never-ending wage increases will add additional costs not just to farm employers but also the downstream and upstream industries that service agriculture and businesses in the wider economy, driving up input costs and reinforcing a wage-price spiral that will drive inflation even higher. Ultimately, it will be the New Zealand public who pay the price on the supermarket shelf," Federated Farmers immigration spokesperson Richard McIntyre said in a statement.

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