Why we support increasing the minimum wage

Labour has a proud history of standing for fairness at work, supporting the development of high-quality, high wage jobs and for improving the quality of life for New Zealand workers.

Since coming into Government, we’ve continued to fight for workers by raising the minimum wage every year, going from $15.75 in our first year to $16.50 in 2018, to $17.70 in 2019 and up to $18.90 in April 2020. This has improved the lives of approximately 242,000 workers, giving full-time workers an extra $48 a week before tax.

If re-elected, Labour has committed to raising the minimum wage to $20 an hour. This will give full-time workers on minimum wage an extra $44 a week, or $2,288 a year, before tax. This will not only mean that workers receive a fair day’s pay for their hard work, it will put more money in the back pocket of New Zealanders and help to give our economy a much-needed boost.

Those on lower incomes tend to spend every dollar they get instead of putting it aside for another time, so this minimum wage raise will help to stimulate the economy and support local businesses by giving it an immediate cash injection.

If National were to get in, they would scrap this minimum wage increase and instead prioritise tax cuts that only people on larger incomes would reap any significant benefit from. For example, under National, someone on $30,000 a year would only receive $8.10 a week in tax cuts, while a person earning $90,000 a year would receive $58.10 a week – over seven times more.

COVID-19 has shone a light on the many workers who do important work in our community but who are not well or fairly paid for it. We believe we can and need to do a lot better at lifting wages and easing financial stress for hard-working New Zealanders. Putting more money in the pockets of our lowest paid workers will be vital for stimulating the economy as we go forward in the COVID-19 recovery.

It’s time to get our economy moving again, and supporting our workers plays a key role in helping us to build back better.