New Zealand to increase minimum wage to $20 an hour

New Zealand minimum wage

The national minimum wage in New Zealand is to increase by 27% to $20 (£10.50) an hour by 2020.

The increase, which forms part of a coalition agreement between the New Zealand Labour Party and New Zealand First, will see the hourly minimum wage progressively rise from $15.75 (£8.27) an hour for employees aged 18 and over to $20 an hour by 2020. The final minimum wage increases will take effect in April 2021.

The Unite Union predicts that the minimum wage rate increase will benefit nearly 700,000 employees who are currently earning less than the New Zealand voluntary living wage rate of $20.20 (£10.61) an hour.

The voluntary living wage rate is calculated independently on an annual basis by the New Zealand Family Centre Social Policy Unit, to reflect the basic expenses of employees and their families.

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Gerard Hehir, national secretary at Unite, said: “It will make a huge difference to hundreds of thousands who most desperately need help. Over four years it is a 6.75% average increase per year. That is not excessive when we currently have full-time [employees] relying on welfare support, state subsidies and charity, and still struggling. Employers need to pay their [employees] enough to live, it really is that simple.

“Employers who don’t think their [employees] are worth $20 an hour should look at their business model. New Zealand has a productivity problem. Rather than relying on low wages and low skills, [organisations] should be looking to make their employees more productive. Investing in skills, training and new technology is the answer; not paying your [employees] the least the law allows you and complaining that it is too much.”