E tū is appalled with the Government’s decision to increase the minimum wage by less than inflation for a second year in a row.

Minister of Workplace Relations and Safety, Brooke van Velden, announced today that from April next year the minimum wage will be $23.50, an increase of just 35c, or 1.5%. The Consumer Price Index (CPI) most recently reported annual change was 2.2%.

A calculation done by the New Zealand Council of Trade Unions shows this will make full time minimum wage workers worse off by $1,206 per year, compared to how much they would have earned if minimum wage increases had kept up with inflation.

The announced rate is $4.30 below the Living Wage, which is $27.80 for 2024/25. The difference is $172 per week, or $8,944 per year.

E tū Assistant National Secretary, Annie Newman, condemns the decision.

“The Government has made another callous decision which will make in-work poverty even worse in Aotearoa,” Annie says.

“This is effectively a pay cut for the most vulnerable and lowest paid people in the workforce. Costs continue to rise across the board, with housing, food, transport, energy, and other essentials becoming even less affordable.

“Workers and their families are already up against extra costs imposed by this Government, such as ACC levy increases, the reinstatement of prescription fees, and slashing public transport subsidies.

“The Government seems hell-bent on making life hardest for those who need the most support.”

Annie says every worker deserves the Living Wage.

“The difference the Living Wage makes for workers is life changing. When our members win the Living Wage, they’re in a much better position to make ends meet. Many report being able to reduce their very long hours, allowing them to spend decent time with their families.

“Increasing wages in the best way to reduce in-work poverty. The Government should be lifting the minimum wage above the rate of inflation to bridge the gap between the minimum wage and the Living Wage.

“Instead of increasing the minimum wage above CPI, or even keeping up with it, they’ve chosen to give minimum wage workers a pay cut in real terms. It’s a decision to exacerbate the cost-of-living crisis for those it hits hardest.

“As Aotearoa’s workers finish 2024 and look ahead to the new year, those who earn the least are finding out today the Government has chosen to make life even harder for them in 2025. It’s frankly outrageous.”

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