'This is effectively a pay cut for the most vulnerable,' union says
Trade union E tū has slammed the modest increase to New Zealand's minimum wage, warning that it will be a "pay cut" to the country's lowest-paid workers.
The minimum wage is expected to rise to $23.50 an hour starting April, a 1.5% increase from the current adult minimum wage of $23.15.
Annie Newman, E tū Assistant National Secretary, slammed the move as a "callous decision" from the government.
"This is effectively a pay cut for the most vulnerable and lowest paid people in the workforce," Newman said in a statement. "Costs continue to rise across the board, with housing, food, transport, energy, and other essentials becoming even less affordable."
According to E tū, the minimum wage in April will be down by $4.30 from the Living Wage, which is $27.80 for 2024-25.
Living Wage refers to the income needed to provide workers and their families with the necessities in life. According to Newman, every worker deserves to receive this.
"The difference the Living Wage makes for workers is life changing. When our members win the Living Wage, they're in a much better position to make ends meet," she said.
"Many report being able to reduce their very long hours, allowing them to spend decent time with their families."
Newman added the government is giving minimum wage workers a "pay cut in real terms," stressing the wage increase is the best way to reduce in-work poverty.
"The government should be lifting the minimum wage above the rate of inflation to bridge the gap between the minimum wage and the Living Wage," she said.
Workplace Relations and Safety Minister Brooke van Velden previously attributed the modest increase to the minimum wage to the economy still recovering from a sustained period of high interest rates and recessionary conditions.
"In that context, delivering a modest increase in the minimum wage strikes the right balance between supporting workers and limiting further costs on business," the minister said.
