New Zealand living wage rate increases to $26 an hour

The New Zealand living wage has increased to $26 an hour.

The 2023/24 rate is an increase of $2.35, or 9.9 percent, on the 2022/23 rate. It means a full-time worker who earns the new living wage rate is paid $54,080 before tax annually.

There was a full recalculation of the living wage, which happens every five years. In other years, the living wage is linked to New Zealand's average hourly wages.

Recent increases in the cost of living are reflected in the new living wage rate, as are considerations for what families need to "live with dignity and participate in society". This includes the cost of recreation and saving for emergencies.

The rate will see workers at accredited living wage employers earning at least $3.30 more than the minimum wage, which is $22.70 an hour.

Rev Stephen King, the chair of the Living Wage Movement, said they're seeing increased hardship in the community due to rising costs and pressures on low-wage workers.

"The full recalculation ensures the living wage will continue to address in-work poverty, and offer working people greater security and wellbeing," King said.

Rose Kavapalu, a cleaner who is paid the living wage, said the increase to $26 an hour will mean she can reconnect with family.

"Since petrol prices have gone up, we've cut down on visits to extended family. Now, I'll be able to take the grandkids to visit their cousins. We would feel like a family again," she said.

"The living wage might feel like 5 cents to some people, but to me and my family, it means finally living a life."

Accredited living wage employers will pay the new rate by September 1, 2023. Environment Canterbury (ECan) is the latest accredited living wage employer, which chair Peter Scott said is an honour.

"Living wage accreditation is something we've been working towards for some time," he said.

"Being a living wage employer means our people and contracted providers are paid fairly for the great mahi they do."

ECan is the first regional council to gain living wage employer accreditation. It joins over 370 other living wage employers who voluntarily pay at least the living wage to staff and regular contractors.

"The living wage movement congratulates ECan, and all living wage employers," said Felicia Scherrer, living wage employer programme lead.

"These employers have chosen to prioritise paying a living wage, and together they have transformed thousands of lives.

"We know that living wage employers reap the benefits too. Research has shown that paying the living wage can reduce staff turnover, improve productivity, and boost employee morale."