The Wesfarmers Ltd (ASX: WES) share price is falling slightly today. However, in positive news for the company's New Zealand employees, Kmart has reached a "living wage" agreement with the country's retail workers union, FIRST Union.
The Wesfarmers share price is down 0.52% to $55.59 at the time of writing.
Wesfarmers is a diversified business. It's broad operations including home improvement and outdoor living, apparel and general merchandise, and office supplies. In addition, the company has an industrials division with businesses in chemicals, energy and fertilisers, and industrial and safety products.
Wesfarmers subsidiaries include household names such as Bunnings Warehouse, Kmart Australia, Officeworks, and more.
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Wesfarmers 'living wage' agreement
FIRST Union says the pay rise for Kmart workers is a retail industry landmark. It's a recognition by the major Wesfarmers brand to uphold living wage benchmarks. These are set by an independent economic advisory panel in New Zealand.
According to the union, the deal will mean hundreds of sales assistants will move to living wages. In addition, there will be wage increases for longer-serving staff, a new CA allowance for union members, and a commitment to staffing health reviews.
New employees at Kmart will now receive at least the current living wage of NZ$22.10 per hour after six months of experience. Pay rates will also increase for Coordinators and DC Team Members as well as sales workers.
FIRST Union is New Zealand's second-largest private sector trade union. It has been negotiating with Kmart and Bunnings over pay raises for its staff. According to the union, fellow Wesfarmers brand, Bunnings, is still holding out on providing a living wage for its staff.
What FIRST Union said
FIRST Union Secretary for Retail and Finance, Tali Williams, said it was a significant step for New Zealand retail workers:
Kmart have recognised that their workers are the ones who've kept the business afloat and profitable throughout the pandemic year, and are doing the right thing by ensuring workers are paid a living wage. I'm proud of our negotiating team, who made their claims clear and approached the bargaining calmly and with unity.
Major retailers like Kmart have not experienced the drop in profitability that many predicted, and this offer shows that these companies are more than capable of paying their staff a living wage even during a year of crisis.
Wesfarmers share price snapshot
The Wesfarmers share price has been a powerful performer as Australia and New Zealand's economies rebound and retail spending increases. The company's share price is up more than 9% the past month and 51% over the past 12 months.
