Minimum wage will rise to $20 an hour on April 1, 2021.
Workplace Relations and Safety Minister Michael Wood says as New Zealand looks to recover and rebuild from COVID-19, the Government is committed to supporting Kiwis by raising wages.
'There are many Kiwis who earn the minimum wage that have gone above and beyond in our fight against COVID.
"I think everyone agrees those who served us so well during lockdown – including supermarket workers, cleaners, and security guards – deserve a pay rise."
Wood says this minimum wage increase will lift the incomes of around 175,500 New Zealanders – which means $44 more each week before tax for Kiwis working 40 hours a week on the minimum wage.
'The rise in the minimum wage is estimated to boost wages across the economy by $216 million, giving New Zealanders more money to spend at local businesses. Increases to the minimum wage can also promote productivity, which is good for businesses too.
'We're taking a balanced approach and supporting both employees and employers through the pandemic.
"We'll be providing access to a Short Term Absence Payment to support employers to ensure their employees are able to follow public health guidance while waiting for a COVID-19 test. In the event of COVID-19 resurgence, we have put in place a new Resurgence Support Payment to help firms cover their fixed costs and committed to the Wage Subsidy Scheme for Alert Level 3 and above.
'Signalling the minimum wage increases over three years has helped give businesses much needed certainty. Next year I will outline what changes we are intending to make in the coming years to give businesses time to plan ahead."
The starting-out and training minimum wages will also rise to $16 per hour, to remain at 80 per cent of the adult minimum wage.
5 comments
Tom Ranger
Posted on 17-12-2020 08:48 | By Tom Ranger
Cost of living to increase on April 2 2021. Govt tax take to increase forever after.
Just don't get it.
Posted on 17-12-2020 10:07 | By The Professor
Tom Ranger gets it, but the Government fail to understand that the cost of living goes up to pay for the increase in wages. In actual fact, it's the people who are on wages/salaries above minimum wage who keep suffering. Their wages or salaries don't increase at the same rate as minimum wages do, so in actual fact, those people are becoming poorer due to the increased cost of living.
Tom Ranger
Posted on 17-12-2020 12:22 | By Tom Ranger
Yeah...I no longer believe the govt is ignorant of this. They just know how to "frame" these thing's to the general public whom are used to thinking in face-value terms and can't/don't understand the whole picture. Here, they have taken advantage of the young to muster public support for the wage increases. Pity it's them that will suffer most as prices increase. The wage subsidy was not a wage subsidy either. It was a business bail-out with tax-payers money.
Raising minimum wage DOES increase the cost of living.
Posted on 18-12-2020 14:22 | By morepork
I disagree with the Professor that Government don't understand this. They understand perfectly but do it anyway. It targets the poorer sector of society, at the expense of the rest of us and, as long as the burden is small for the rest of us, it is probably a good thing overall. Sadly, it is driven by "feel-good" factors and politics, rather than Economic sense and squeezing the middle class has been shown to be a very dangerous endeavor for any Government. If they did it and eased tax on middle income people at the same time it would be more acceptable (and fairer), but that is unlikely to happen...
Increase Productivity?
Posted on 20-12-2020 22:42 | By Roman Tomson
In more than 40 years of working at many levels within industry I recall many occasions that staff were financially rewarded for increasing productivity. However, throughout my working life I have NEVER seen an increase in productivity that can be directly attributed to a wage rise. The only beneficiary of this wage rise will be the Government through a higher income tax take and increased income from GST - you know, a new tax which isn't really a new tax, so no promises have been broken.
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