The real minimum wage needed for a family to have a decent standard of living is about to rise to $20.20 an hour, the Living Wage movement says.
The living wage is a non-binding goal designed to put pressure on employers to raise workers’ pay above the legal minimum.
Organisers say the new figure reflects the effect of rising prices on a typical Kiwi family struggling to pay the rent and cover everyday costs from supermarket trips to school uniforms.
The minimum wage a New Zealand employer must pay its staff by law is $15.25 per hour.
However, research conducted by the Family Centre Social
Policy Unit in 2013 found the minimum wage often fell short of covering the costs of necessities to allow an average New Zealand family — two adults and two children — to live with dignity.
A living wage of $18.40 was recommended — a figure based on the income a couple would earn if they worked a combined 60 hours per week.
As the cost of living rises each year, the living wage rate is increased.
Over the past four years, 64 New Zealand businesses have joined the Living Wage Movement, committing to paying their staff at least the yearly living wage rate.
Last year, the majority of representatives on six councils around New Zealand voted in favour of paying all council employees the living wage.
Living Wage national convener Annie Newman is due to announce today the living wage rate will increase from $19.80 to $20.20 on July 1.
This is in line with the average wage increase of 2.1% that employees across the workforce got in June 2016 compared with the previous year.
Ms Newman said although the living wage was only $4.95 more than the minimum wage, the difference the pay rise made to employees on the lower end of the pay scale was huge.
‘‘The minimum wage is an incredibly low bar and the difference is quite transformative. That difference is massive and I think it’s a difference that people on high incomes can’t conceive of.’’
Ms Newman said it was important for councils to lead the charge by paying their staff and contractors a living wage.
‘‘There is a moral imperative when you are using the money you’ve taken out of people’s pockets, either by tax or rates, that you are using it for the public good. In other words, you are using it to create flourishing, thriving communities and you can’t have those communities if people aren’t paid enough.’’
Large corporates were also yet to commit to the living wage movement, Ms Newman said.
‘‘When businesses step up and say we want to do this, they shine a light for all others. We’ve seen small and medium sized businesses come onboard, but we’re yet to see any corporates recognise that they have a responsibility to the communities in which they operate,’’ Ms Newman said.
Organisers of the campaign hoped larger businesses would get on board this year.
Attempts to reach Workplace Relations and Safety Minister Michael Woodhouse for comment were unsuccessful yesterday.
Pay rates:
Minimum wage: $15.25 ($31,720/year)
New living wage: $20.20 ($42,016/year)
Difference: $4.95 per hour ($198 a week, $10,296 a year)
