The minimum wage will increase to $23.15 per hour from April 1, the Workplace Relations and Safety Minister confirmed on Thursday.
Brooke van Velden said a "cautious" 2 percent hike to the adult minimum wage is required this year.
"This Government is committed to striking the right balance between protecting the incomes of our lowest paid workers and maintaining labour market settings that encourage employment."
She said the economy has changed markedly in the past year.
"While unemployment is currently low, the labour market is softening due to high net migration rates, constrained consumer spending and subdued economic growth."
Between 80,000 and 145,000 minimum-wage workers will benefit from the increase, van Velden said.
Aotearoa has a generous minimum wage by OECD standards, she said, when compared to the median wage of $29.66.
"As a ratio to the median wage, the minimum wage has increased from 62 percent of the median wage in June 2017 to 72 percent in June 2023.
"This has made it harder for businesses to issue pay rises or take on more staff."
She said the previous Labour Government's hikes to the minimum wage outstripped increases in inflation.
Van Velden said the Coalition's approach "sets the balance right".
"Moderate annual increases to the minimum wage reflect this Government’s commitment to growing the economy, boosting incomes and supporting job growth throughout New Zealand."
Training and starting wages will also increase to $18.52.
What have previous changes been like?
The Government considers increases to the minimum wage every April.
It's currently $22.70 after last year's increase.
Back in 2022, it was $21.20 and, in 2021, it was $20.
