The living wage has increased from $23.65 to $26 an hour, as of September 1.
The 9.9% rise is linked to the five-year measurement review of the living wage, conducted by the NZ Family Social Policy Centre Research Unit.
The news comes as New Zealand’s politicians face a significant pay rise after the general election in October.
The increase is expected to make up for six years of fixed pay, as former Prime Minister Jacinda Ardern’s politician pay freeze imposed in 2018 ends.
The move is expected to raise questions about whether politicians are paid too much, especially amid the cost-of-living crisis, evidenced by the near 10% living wage increase.
By law, a revision of MP pay is required within three months of the “return of the writ” – the confirmation of the outcome of the election.
The last day for the return of the writ is November 7.
The prime minister earns $471,049 a year, the deputy prime minister $334,734, cabinet ministers $296,007, and ministers outside cabinet $249,839.
The leader of the opposition earns $296,007. Other party leaders have their pay determined by the number of MPs in their party in Parliament. The current base salary of an MP is $163,961. Visit www.parliament.nz/en/get-involved/features/how-is-the-pay-of-mps-and-ministers-set for more information.
Are politicians paid too much? Only six comparable nations pay their leaders more; Australia, Germany, Hong Kong, Singapore, Switzerland, and the United States.
In perspective, New Zealand’s prime minister earns about nine times the average national income. MPs earn around three times the average median income.
Only accredited living wage employees can certainly expect a pay rise like our politicians.
More than 370 employers are accredited living wage employers in New Zealand. When the living wage increases, these firms will automatically meet the new living wage pay for their employers.
The living wage rate was $22.75 in 2021 and $22.10 in 2020.