An effective Labour market policy can both underpin economic growth and ensure the fruits of growth can be shared fairly.
The minimum wage is part of every government’s general responsibility to ensure socially acceptable employment standards that are prescribed and enforceable. It provides a floor for wages paid to employees.
There are also formal international commitments that establish an explicit obligation on the New Zealand government to ensure an adequate minimum wage. International Labour Organisation (ILO) Convention 26 recommends that minimum wages should be set according to the "general level of wages prevailing in the country".
In this decade, New Zealand’s lowest paid workers have experienced increases to their income of 71%, this is more than four times what they would have experienced in the decade before. The minimum wage increased every year since 1999. Over 120,000 New Zealanders experienced increases in their income in 2008.
Last year's increase lifted the adult rate from $10.25 to $11.25 per hour and the youth rate from $8.20 to $9.00 an hour. This was the largest increase in the adult minimum wage since the incoming Lange Labour government boosted the rate in 1985. On 1 April 2008, the minimum wage was increased again from $11.25 per hour, to $12 per hour.
Labour believes that we need ensure that all wages reach a socially acceptable minimum. That is why we are committed to offering wage protection to vulnerable workers so that they are paid wages that reflect their worth and productivity. This also ensures that the earnings of people on low incomes do not deteriorate relative to those of other workers, and increases the incentives to work for people considering work.
We acknowledge that there have been calls from a number of quarters to lift the minimum wage to $15.00 an hour. Labour would like to meet this target if possible, but in the current economic circumstances we are not able to commit to doing so.
Labour will guarantee annual adjustments to the minimum wage during the next term of government, so that the minimum wage at least keeps pace with increases in the average wage or the consumer price index, whichever is the greater.
Raising the minimum wage, combined with other assistance such as with Working for Families, has a significant positive effect on the lives of working New Zealanders and their families. Especially during these times of turbulent economic conditions, it reduces the stress and tension some families face in trying to managing financial pressures while ensuring a happy and healthy family environment.