JUST IN: Government Announces Significant Increase In Minimum Wage With Immediate Effect

In a move set to take effect from April 1, New Zealand is increasing its adult minimum wage rate by two per cent, reaching 23.15 NZ dollars (equivalent to 14.12 U.S. dollars) per hour. While Workplace Relations and Safety Minister Brooke Van Velden emphasized the government’s commitment to safeguarding the income of low-wage workers, she also highlighted the need to maintain employment-friendly labor market conditions.

 Van Velden acknowledged the cautious approach due to significant economic changes, citing factors like high net migration rates, constrained consumer spending, and subdued economic growth affecting the labor market. Despite low unemployment, the minister noted a softening in the labor market.

However, as a ratio to the median wage, the minimum wage has risen from 62 per cent in June 2017 to 72 per cent in June 2023, posing challenges for businesses regarding pay raises and hiring. The Labor Party criticized the increase as “tiny,” emphasizing the economic conditions.

Van Velden clarified that the adjustment considered the current economic scenario and historical increases to prevent distortions in wage relativities with other earners. Nevertheless, training and starting wages will persist at 80 per cent of the adult minimum wage rate.

 

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