Signs favour wage lift to $15/hour

Unions have campaigned for a $15 hourly minimum since June 2009. Photo / NZPA

A longstanding union goal of lifting the minimum wage to $15 an hour may finally be achieved today.

Workplace Relations Minister Michael Woodhouse is expected to announce this year's increase in the minimum after today's Cabinet meeting, and all the signs are that the new rate will be at least $15.

Unions have been campaigning for a $15 minimum since June 2009, when it was $12.50 an hour.

The Labour and Green Parties both promised at the 2014 election to raise the minimum to $15 immediately, and to $16.25 by April last year (Labour) or to $18 by 2017 (Greens).

The National-led Government's policy has been "to keep increasing the minimum wage over time to protect the real incomes of low-paid workers while minimising job losses".

It has raised the minimum rate by either 25c or 50c an hour every April since it took power at the end of 2008, suggesting the current rate of $14.75 an hour will go up from April 1 to either $15 or $15.25.

Council of Trade Unions economist Bill Rosenberg said that "would be consistent with past behaviour".

"On the other hand, this is meant to be a more significant review than previous years. Four years ago they went to a system where for three years they only asked for submissions from us and Business NZ, and in the fourth year they would do a fuller review. This year has been a fuller review," he said.

The announcement looks set to trump the latest annual increase in the union-backed "living wage", which will also be unveiled today. The living wage is described as the hourly rate required to provide the "basic necessities" for a family of two adults and two children, with one adult working 40 hours and the other 20 hours a week.

It is currently $19.25 an hour and is expected to go up in line with a 2.8 per cent rise in the average wage to just under $20 an hour.

Dr Rosenberg said there would be little risk that raising the minimum wage would be inflationary, with inflation at 0.1 per cent in the past year, and there would be minimal impact on jobs as unemployment dropped in the past year from 5.8 per cent to 5.3 per cent. "With the economy doing well, it would be a good time to do it."

The unions have argued in a submission that the NZ minimum is now well below the Australian minimum of A$17.29 an hour, or NZ$18.51 at Friday's exchange rate.

Their submission argues for increases to $16.50 this year and to 66 per cent of the average wage, or $20.65, by 2018.

Business NZ has proposed keeping increases to less than the inflation rate, which would be effectively zero this year, "until the minimum wage falls significantly from its present position of 54 per cent of the average national wage".