New Zealand’s minimum wage to increase

17 Jan 2019

moneyIn an effort to reduce inequality, New Zealand’s minimum wage is set to increase by NZ$1.20 in April, amounting to a total of NZ$17.70 an hour.

The minimum wage has seen consistent increases as it moves towards Prime Minister Jacinda Ardern’s centre-left coalition government’s hourly NZ$20 goal for 2021.  

In an e-mailed statement, Minister for Workplace Relations Iain Lees-Galloway said: "The government is determined to improve the well-being and living standards of all New Zealanders as we build a productive, sustainable and inclusive economy.

"A fair day's work should equal a fair days wage and that is what this Government is seeking to achieve."

Lees-Galloway also said that the increase would mean an additional NZ$48 per week before tax for minimum-wage workers.

The wage increase, which would direct around an extra NZ$231 million yearly to workers’ wages, has been criticised by some. Businesses have complained of added pressure, and leader of the opposition, Simon Bridges, backed these concerns.

"I acknowledge if you are there on minimum wage, you will welcome this," Bridges said.

"But I also think what is true is big increases over a period of time too far too fast for small businesses, for people who are unemployed and want to get a job and for cost of living which hits the pocket of all kiwis."

He went on to say that businesses would likely respond by firing some workers or increase the costs of their services.

Kirk Hope, chief executive of BusinessNZ, also expressed concerns surrounding the impact this would have on small and vulnerable businesses.

However, Lees-Galloway highlighted the effect this would have on around 209,200 workers and their families, saying: "About a quarter of those earning the minimum wage – 36,000 people – are parents, with children.” reports that wages for those in training or just starting out will also rise from NZ$13.20 an hour to $14.16 on April 1, so as to remain at the regulated 80% of the adult minimum wage.