Key Points:

      Pay Gap
    • Minimum wage is $15.25 ($31,720/year)
    • New Living wage: $20.20 ($42,016/year)
    • Difference $4.95 per hour, $198 a week, $10,296 a year

The real minimum wage needed for a family to have a decent standard of living is about to rise to $20.20 an hour, says the Living Wage movement.

The living wage is a non-binding goal, designed to put pressure on employers to raise workers' pay above the legal minimum.

Organisers say the new figure reflects the impact of rising prices on a typical Kiwi family struggling to pay the rent and cover everyday costs from supermarket trips to school uniforms.


The minimum wage a New Zealand employer must pay its staff by law is $15.25 per hour.

However, research conducted by the Family Centre Social Policy Unit in 2013 found that the minimum wage often fell short of covering the costs of necessities to allow an average Kiwi family - two adults and two kids - to live with dignity.

And so a living wage of $18.40 was recommended - a figure based on the income a couple would earn if they worked a combined 60 hours per week.

As the cost of living rises each year the living wage rate is increased.

Over the last fours years 64 New Zealand businesses have joined the Living Wage Movement, committing to paying their staff at least the yearly living wage rate.

Last year the majority of representatives on six councils around New Zealand voted in favour of paying all council employees the living wage.

Today Living Wage national convenor Annie Newman has announced that the living wage rate will increase from $19.80 to $20.20 on July 1.

This is in line with the average wage increase of 2.1 per cent that employees across the workforce got in June 2016 compared with the previous year.

Newman said although the living wage was only $4.95 more than the minimum wage, the difference the payrise made to employees on the lower end of the payscale was huge.

"The minimum wage is an incredibly low bar and the difference is quite transformative. That difference is massive and I think it's a difference that people on high incomes can't conceive of."

Newman said it was important for councils to lead the charge by paying their staff and contractors a living wage.

"There is a moral imperative when you are using the money you've taken out of people's pockets, either by tax or rates, that you are using it for the public good. In other words you are using it to create flourishing, thriving communities and you can't have those communities if people aren't paid enough."

Large corporates were also yet to commit to the living wage movement, Newman said.

"When businesses step up and say we want to do this they shine a light for all others. We've seen small and medium sized businesses come onboard, but we're yet to see any corporates recognise that they have a responsibility to the communities in which they operate," Newman said.

Organisers of the campaign hoped larger businesses would get on board this year.

Attempts to reach Workplace Relations and Safety Minister Michael Woodhouse for comment were unsuccessful yesterday.

Closing the gap - a tale of two councils

Before the Wellington City Council implemented a living wage for all staff and contractors last year Fuifui Anae, who works as a contracted parking warden for the council, struggled to make ends meet.

The father-of-three said life was "really tough" on a minimum wage.

"Rent was always high, food prices always up and kids needed many things ... we lived from pay to pay."

But since the council started paying the living wage, then $18.63 an hour, Anae and his partner have been able to buy a house.

"That was unthinkable when I was on the minimum wage," Anae said.

"I can [also] provide healthy food for my kids and fund their school trips. It is not a perfect life but way better than the one we had before. Not renting anymore is a blessing."

But Auckland Council has committed to paying only its staff, not contractors, a living wage, so Malia Langi and her husband, Aisea, don't qualify. They both work 50 hours a week cleaning the council building which houses Mayor Phil Goff's office.

Despite the long hours the couple often struggle to provide for their six kids, aged from 9 to 20.

"Sometimes it's not enough to cover the bills," Langi said.

Earning a living wage of $20.20 would "make a huge difference".

The couple, who rent in Mangere, hope to buy their own home one day, but it's almost impossible for them to get a mortgage when they're on minimum wage.