A minimum wage increase of $1.20, bringing it to $21.20 per hour has been confirmed for 1 April by the government.
The starting-out and training minimum wage will also increase from $16 to $16.96 per hour.
Workplace Relations and Safety Minister Michael Wood says the rise will directly benefit about 300,000 workers, and help many households most impacted by Covid-19.
"For someone working a 40-hour week on the minimum wage, this increase will see them earning an extra $48 a week, and almost $2500 more each year."
He says the government is delivering on an election pledge with the increase, and remained committed to supporting employees and employers throughout the Omicron outbreak.
"The wage increase will also have a stimulatory effect on the economy as many workers will spend the extra money on goods and services, which in turn, will help support businesses," Wood says.
In September, the Living Wage - the rate at which someone would need to afford the necessities of life and participate as an active citizen - increased to $22.75.
It comes after inflation hit its highest level in 30 years, with an annual rate of 5.9 per cent for 2021 and an increase of 1.4 per cent in the three months ended December.
Simon Bridges.
National Finance spokesperson Simon Bridges says raising the minimum wage to $21.20 is an admission by Labour that New Zealand has a cost of living crisis.
'This won't stop the pain lower income New Zealanders are feeling when inflation is up to its highest level in over thirty years, when petrol is going to $3 and when rents are $50 more a week than last year.
'Despite this huge increase, those receiving it will be no better off than they were a year ago. And it's cold comfort to millions of other Kiwis who are also being hurt by cost of living pressure.
'The only reason the Government has had to increase the minimum wage this much is to keep pace with the cost of living crisis they have created.
'It's no coincidence the increase is 6% - almost exactly the same as inflation over the last 12 months.
'This increase is going to be incredibly hard for many businesses who are already struggling – that's the reality of the mess that Labour have created."
David Seymour.File photo/SunLive.
ACT Party leader David Seymour says the move will mean businesses raise their prices or close, and more people are out of work and on welfare for longer.
"We just can't afford that.
'Prices have gone up 5.9 per cent. Wages have gone up just 2.6 per cent. Kiwis can buy less with their money – they're getting poorer.
'Inflation is at a 31-year high and Kiwis are being squeezed from every direction – at the checkout, at the petrol pump, and when they pay the rent.
'The only adequate response is a return to rational economics.”
7 comments
Lefties
Posted on 11-02-2022 11:13 | By Slim Shady
This is what you get with left wing Governments. All around the world, repeated time and again over history. They borrow and print money and give out the sugar pills. People think this is good but a year down the track it drives up inflation and people are worse off, particularly the people who spend most on basics - the very people they claim to look after. They always follow the same pattern and people always fall for it. It's hilarious.
Complex
Posted on 11-02-2022 11:30 | By Kancho
Yes a promise for votes but a two edged sword . Inflation has already eaten up buying power. The cost to employers will be passed on with the cost of the extra holidays the extra sick leave and extra compliance costs already created by government policies . Now with NZ low productivity ready well behind many countries all this adds up to more inflation that the lower paid are already suffering and employers will push up prices to just survive. So interesting conundrum. Does this really help anyone much . Half the petrol cost is actually tax and the money you pay for petrol is tax paid already then gst then import tax etc...so although lower paid need the money there are actually better ways to help them
Catchin up
Posted on 11-02-2022 12:30 | By Merlin
Catching up with inflation is good news for the lower paid who actually help make the profits for the businesses except for oppositions parties who care about profits before people.
Another nail..
Posted on 11-02-2022 14:10 | By groutby
...in the coffin of SMB's...and some larger ones. Nice and simple 'at the stroke of a pen' politics and at no direct cost to the government but sure will be for business trying damn' hard to recover from the last couple of years. Add extra ACC costs, new Employment Insurance costs and along with other raw material cost it won't be only $1.20 per hour extra will it? I assume the latest polling results have got the Labour party a bit concerned, so to appease the Greens and 'sure up' their support, you can bet it won't stop here. Prepare for further punishment people!
Merlin I wish it were true
Posted on 11-02-2022 16:28 | By Kancho
Doubt this is a catch up as inflation is a 30 year high. This will just be passed on. Targeting help is a better option and doesn't feed inflation . The profits you talk of that workers produce is also slim with a well documented poor productivity in relation to OECD countries. That and our inflation is the highest of all our trading partners except America but it's still rising. Rents and petrol are good indicators and far greater than any so called catch which is a political illusion
Min wage
Posted on 11-02-2022 22:33 | By Portland
Its a joke gst and tax is like a drug you become a addict and don't want to let it go, take gst of food basics and fuel. When a government spends more than they collect in tax we have a big problem. This is the last thing employers needed. Inflation will hit a record high this year it will be bad for labour. NZ needs a reset, stop immigration for a couple of years because its quite evident kiwis can't compete with rich immigrants with housing, Michael Hill has always said it is a ponze scheme because governments for some reason think we need to boost our population we should be reducing it due to climate change and food security. Lets face the facts NZ has always and still be a low paying country.
...
Posted on 14-02-2022 15:05 | By This Guy
Last four decades, CEO pay is up 1,322% and the median worker pay is up 18%... but go on keep attacking the lowest paid workers, its clearly all their fault and not the people at the top giving themselves massive raises off the backs of the people doing the actual work... The same people at the top who are going to keep raising prices regardless because there is no endgame in capitalism except "make more money"
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