Make minimum wage the living wage for all

1. What the Topic Is

This petition asks the New Zealand Parliament to change the law so that the national minimum wage becomes the living wage. The minimum wage is the lowest amount an employer can legally pay an employee per hour. The living wage is a separate, higher figure calculated by the Living Wage Aotearoa New Zealand Trust. It represents the hourly rate needed for a typical household to meet basic needs, including food, housing, and transport, without relying on government benefits. The petition seeks to make this higher rate the legal floor for all workers.

2. Current Situation in New Zealand

Currently, the minimum wage and the living wage are two different amounts. As of 2024, the national minimum wage is significantly lower than the calculated living wage. This gap means many workers, particularly those in low-paid sectors like hospitality, retail, and care work, earn less than what is estimated to be necessary for a decent standard of living. The petition exists because advocates argue that the current minimum wage is a "poverty wage" that forces many families to rely on supplementary government support to make ends meet.

3. Arguments in Favour

• Reduced Financial Stress: Supporters argue that paying a living wage reduces financial distress, improving mental health and overall well-being for workers.
• Lower Public Costs: If workers earn enough to cover basic needs, there may be less demand for government assistance programs, such as welfare benefits or emergency social services.
• Economic Boost: Higher wages can increase consumer spending, potentially stimulating local economies.
• Fairness: Proponents view it as a matter of social justice, ensuring that full-time work provides a sustainable income.

4. Arguments Against

• Business Costs: Employers, especially small businesses and those in low-margin industries, may struggle to absorb the increased labor costs.
• Job Losses: Critics argue that higher mandatory wages could lead to reduced hiring, increased automation, or job cuts to manage budgets.
• Price Increases: Businesses may pass on higher labor costs to consumers through increased prices for goods and services.
• Flexibility: Some argue that a single national rate ignores regional differences in the cost of living and industry-specific realities.

5. Relevant Context

The minimum wage is reviewed annually by the Ministry of Business, Innovation and Employment (MBIE) and set by the government. The living wage is calculated independently by the Living Wage Aotearoa New Zealand Trust, which uses data from Statistics New Zealand. While the government has raised the minimum wage in recent years, it has consistently remained below the calculated living wage. This issue affects millions of workers, particularly those in entry-level, part-time, or casual roles, as well as small business owners who must balance payroll costs with profitability.

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