New Zealand’s adult minimum wage rate will increase by 2% to $23.15 an hour from April 1, 2024, with peak body Retail NZ calling the limited lift a relief for retailers across the country.
Retail NZ CEO Carolyn Young said wage increases are one of the major concerns among New Zealand retailers right now, as noted in its latest Retail Radar quarterly survey.
“During these challenging economic times, every cost increase has to be passed on to consumers,” Young said. “So it is a relief that the Government has announced the adult minimum wage rate will increase by only 2%.”
Retail NZ had written to Workplace Relations and Safety Minister Brooke van Velden before Christmas, asking her to restrain minimum wage increases to enable retailers to set a level that is more sustainable.
“We are pleased that Minister van Velden has listened to us and recognised the pressures that retailers are under,” Young said.
Minister van Velden said the NZ Government is committed to striking the right balance between protecting incomes of the country’s lowest paid workers and maintaining labour market settings that encourage employment.
“The economic context has changed significantly over the past year,” van Velden said.
“While unemployment is currently low, the labour market is softening due to high net migration rates, constrained consumer spending and subdued economic growth. Given these economic headwinds, a cautious approach to the minimum wage is required this year.”
The Minister added that New Zealand’s minimum wage is one of the most generous in the OECD in terms of relativity with the median wage.
“As a ratio to the median wage, the minimum wage has increased from 62% of the median wage in June 2017 to 72% in June 2023. This has made it harder for businesses to issue pay rises or take on more staff.
“An increase to $23.15 will benefit between 80,000 and 145,000 workers and will give our lowest paid workers more money in their pockets, without hindering job growth or imposing unreasonable costs on businesses.”
Training wages and starting wages will remain at 80% of the adult minimum wage rate, thereby increasing to $18.52.