Fairer pay with minimum wage rise for quarter of a million workers

  • Hon Iain Lees-Galloway
Workplace Relations and Safety

The Government is making sure we share the prosperity of our strong economy fairly with those on the minimum wage by lifting it to $18.90 per hour on 1 April 2020 – the next step in the Government’s plan for a $20 minimum wage by 2021, Workplace Relations and Safety Minister Iain Lees-Galloway says.

“Around a quarter of million workers will be better off next year, thanks to another $1.20 an hour increase to the minimum wage, the biggest equal lift ever,” says Iain Lees-Galloway.

An estimated 242,000 workers will benefit by a lift in their income, which includes people working on $17.70 and between $17.70 and $18.90 an hour.

“The new $18.90 rate will mean an extra $48 per week before tax for Kiwis who work for 40 hours on the current minimum wage.

“New Zealand’s economy currently has a solid footing. Our unemployment rate is low at 4.2 per cent, our economy is predicted to add 43,600 jobs in 2020, and our GDP is growing at a faster rate than other OECD nations, including Australia, Canada, the USA and European countries.

“With our economy doing well, we want to make sure that our lowest paid workers also benefit. The rise in minimum wage is estimated to boost wages by $306 million a year across the economy. That’s a good investment in local economies where workers spend their wages.

Iain Lees-Galloway says today’s announcement reconfirms the rates signalled in 2018 and the Government’s plan for a $20 minimum wage in 2021.

“We’re implementing a balanced approach to the minimum wage increases and have provided certainty to businesses who told us they wanted to know how much the minimum wage will increase and when the changes were going to happen,” says Iain Lees-Galloway.

“Last year, we signalled minimum wages of $18.90 for 2020 and $20 in 2021.  By re-confirming these rates we offer certainty the businesses need for planning and forecasting.”

The starting out and training wages will also see a boost, with a rise to $15.12 per hour from 1 April 2020, remaining at 80% of the adult minimum wage.