The minimum wage is set to rise by 2% to $23.95 per hour, effective April 1st, 2025. This decision has sparked mixed reactions, with the opposition labeling it as a 'piddly' and 'measly' increase, while the government argues it strikes a balance between cost of living adjustments and business sustainability. The government's announcement comes as a result of the annual review of minimum wages, mandated by law, and aims to address youth unemployment and wage compression. The starting-out and training minimum wage rates will be set at 80% of the adult minimum wage, at $19.16 per hour.
The Minister for Workplace Relations and Safety, Brooke van Velden, expressed satisfaction with the moderate increase, emphasizing its role in helping minimum wage workers keep up with the cost of living, which is projected to remain stable at around 2% from June 2026. Van Velden also highlighted the government's commitment to easing wage compression, a trend that has previously reduced pay differentiation based on skills, experience, or performance. This approach, she added, supports young people in gaining employment, a group more likely to earn at or below the minimum wage.
However, the opposition has strongly criticized the increase. Labour and the Greens described it as an 'effective pay cut' for workers, while the Unite Union, representing hospitality workers, expressed 'appall' at the proposal, noting it falls $4 below the Living Wage of $28.95. The union's national secretary, Shanna Olsen-Reeder, criticized the government's disconnect with the working public, suggesting that a 45-cent increase on April 1st is insufficient to address the cost of living crisis. The Labour Party's workplace relations and safety spokesperson, Jan Tinetti, echoed similar sentiments, accusing the government of being out of touch and failing to address the rising cost of living, which has led to Kiwis leaving the country due to job losses and financial strain.
