Almost half of all women and a third of men earn less than $18.40 an hour - a rate which two Labour Party leadership contenders have promised to implement as a "living wage" in the state sector if they win power.

A special breakdown of June 2012 income data, provided by Statistics NZ, also shows that part-time workers and young people are far more likely than others to earn below $18.40.

Would-be Labour leaders Grant Robertson and David Cunliffe promised this week to raise minimum wages for government employees and contractors to $18.40, which unions and church groups say is the minimum required to meet the basic needs of two adults and two children where one parent works fulltime and one half-time.

The current minimum wage is $13.75.


The figures show that the cost to go up to a living wage may be much less for the core public service than for the private sector. Only 15 per cent of the 114,000 people working in public administration and safety earned less than $18.40 an hour, the lowest share of all 14 industry groups.

But the Government would face higher costs in the health sector, where 38 per cent of employees earn less than $18.40, and in education, where 27 per cent earn below that mark.

Across the whole economy, 39 per cent of all employees fall below the standard, reaching 73 per cent in retailing and accommodation.

Former Equal Employment Opportunities Commissioner Judy McGregor said she was not surprised to see 44 per cent of women, compared with 34 per cent of men, in the low-income group.

"Women are concentrated in those traditionally low-wage occupations - the three C's, caring, cleaning and clerical work. They have been there for a long time, so it's been a systemic issue."

Institute of Economic Research director Jean-Pierre de Raad said the figures confirmed that a living wage would be "harmful to the employment prospects of young people".

"The data also confirm questions about the logic of the living wage," he said. "The $18.40 figure is based on the expenses faced by a notional median nuclear family ... earning the median household income.

"But a large proportion of those on low wages are the young ... who will improve their incomes over time as they get work experience."


Retailers Association chief executive John Albertson said retailing and accommodation topped the list of workers on less than $18.40 because they also had the highest shares of both young and part-time workers.