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The government has announced a $0.50 increase to the minimum wage commencing April 1. It will bring the rate up to $15.25 per hour.
The starting-out and training minimum wage is also rising by $0.40 from $11.80 to $12.20 an hour. This will keep them at 80% of the adult minimum wage.
Workplace Relations and Safety Minister, Michael Woodhouse, stated that an increased wage of $15.25 per hour would directly benefit approximately 152,700 workers, and increase wages throughout the economy by $75 million per year.
“With annual inflation currently at 0.1%, an increase to the minimum wage by 3.4% gives our lowest paid workers more money in their pocket, without imposing undue pressure on businesses or hindering job growth.”
The government has received flak from the opposition who see the increase as not enough. Labour leader Andrew Little said the increase of $18.00 per week in take home pay would just cover rate rises.
He went on to say, “Labour first called for a $15.00 minimum hourly rate seven years ago—today we are just $0.25 above that.”
“At the same time we have corporate salaries in the millions of dollars and we are lagging behind Australia’s minimum wage which is more than $3.50 per hour above the New Zealand rate.”
The government’s announcement coincided with the living wage being raised to $19.80 per hour—an increase of $0.55 from 2015.
The living wage is formulated by Charles Waldegrave of the Family Centre’s social policy research unit, with the help of Peter King. The living wage lobby group state that living wage is the rate needed to maintain a decent standard of life.
Lyndy McIntyre from the living wage campaign in Wellington has hit back against the new minimum wage. She told Salient about the importance of the increase in the living wage, especially for students.
Stating that a “$15.00 minimum wage is a poverty wage and does not address the range of costs New Zealand workers and students need.”
She went on to stress the impact the living wage would have on students. “It would mean fewer students being forced to work long hours on the minimum wage because they cannot afford anything else.”
Businesses paying a living wage will have until July 1 to implement the rate.