Minister of Internal Affairs Albert Nicholas, in accordance with the Employment Relations Act 2012, announced that the minimum wage for 2015 will increase from $6 an hour to $6.25 per hour as of July 1 this year.
The cost government of the 4.2 per cent increase is estimated to be $100,000 per annum.
Guided by the 2015 minimum wage review panel, Nicholas said the government is positive about the increase.
Nicholas said it would be nicer if it was a bit more than 25 cents, but the government is ‘comfortable’ with their position at this stage.
“I think any government’s dream probably is that they can go out there and give a huge minimum wage increase, but again it has to be a balance between employees and employers.”
“We don’t want to find ourselves in a situation where we are creating scenarios where the employer can’t maintain employing his workers.”
He said he thinks people are leaving the Cook Islands for an average wage earning overseas of $20 to $25 an hour.
“I think there’s no amount of minimum wage increase that we could possibility do here to stop our people from leaving.”
Cook Islands Workers Association (CIWA) president and panel member Anthony Turua said workers would have preferred a $1 increase.
“I would have preferred it to be more but we’ve got to consider all the indicators in terms of affordability.”
He said 4.2 per cent is ‘about the right’ rate of increase for this year.
The panel’s Chamber of Commerce representative Steve Anderson said employers support an increase in the minimum wage, but are conscious of the difficulties of implementing it.
“Outer island employers have some difficulty in implementing a higher minimum wage immediately and we don’t want to create hardship for outer island employers.
“We want to make it affordable for all sectors, not just for businesses that can afford to pay more.”
Ministry of Finance and Economic Management advisor James Webb said a small incremental increase in the minimum wage was safer for the country.
“We don’t want to do things too quickly because you’ll find people will just lay off workers or they’ll cut hours to make it affordable which is not what we want.”
“We want to maximize the Cook Islands economy to employ as many people as possible.”
Asked whether the minimum wage would ever go up to the $8 and $10 mark, Webb said that was a question they could not answer at this stage, as all increases depend on the state of the economy and inflation.
Internal Affairs secretary Bredina Drollet said the minimum wage increase would mainly affect public sector workers in the Pa Enua.
Last year, the minimum wage was increased from $5 to $6 an hour.
To obtain a copy of the Report on the 2015 Minimum Wage Rate Review for the Cook Islands, contact the Ministry of Internal Affairs Labour & Employment Relations Office on 29370.