Govt delivers early on $12 minimum wage promise

Labour Minister Trevor Mallard today announced an increase in the minimum wage to $12 an hour from next April for about 140,000 workers aged 16 and over around New Zealand.

"Thanks to the support of New Zealand First and the Green Party through their confidence and supply agreements, the government has delivered well ahead of time on the promise to 'lift the minimum wage to $12 an hour by the end of 2008, if economic conditions permit'," Trevor Mallard said.

"Under the Labour-led government, New Zealand's economy has been stronger for longer than at any point since the end of World War 2 and we are pleased to see that success flow through to workers.

"This increase will ensure that lower paid workers share the benefits of economic growth, it will encourage people to join the workforce and provide protection for some of New Zealand’s most vulnerable workers.

"The changes to minimum wages are part of the Labour-led government's work to raise living standards across the board, and support higher quality working lives and productive workplaces. Our other initiatives focus on workplace productivity, and work-life balance. These include Working For Families, initiatives around labour and skills shortages, and the promotion of pay and employment equity. "

The minimum wage, which applies to people 16 years and over, will increase from April 1 2008 by 6.7 per cent, from $11.25 to $12.00 an hour ($480 for a 40 hour week).

The youth minimum rate of $9.00 per hour, for employees aged 16 and 17 years, will cease from 1 April 2008 and be replaced by a new entrants minimum hourly rate of $9.60, or 80 per cent of the adult minimum wage. The new entrants rate can be paid to 16 and 17 year olds for the first 200 hours or three months of employment, then the adult minimum wage applies.

"The replacement of the youth minimum rate with the new entrants rate was a Green Party initiative (private members bill by Sue Bradford) that the Labour-led government was very pleased to support."

The increase to $12.00/$9.60 will benefit around 102,400 adult workers aged 18 and over, most of whom are women, and around 38,300 16 and 17 year olds. A proportion of these younger workers would qualify for the new entrants rate for up to three months. The minimum training wage for industry trainees would also be increased by 60c to $9.60 an hour.

The Minister of Labour reviews minimum wage rates annually for adults, youth and trainees, seeking submissions from a wide range of organisations, including employer, union, Pacific, Maori and women’s groups.

For more information, employers and employees can contact the Department of Labour at free phone 0800 20 90 20.

Information on current minimum wage rates is available at http://www.ers.dol.govt.nz/

ENDS

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