New Zealand's lowest paid workers are getting a pay rise.
Minister of Labour Kate Wilkinson has today announced the minimum wage is being raised from $12.75 to $13 an hour.
The training and new entrants' minimum wages will increase from $10.20 to $10.40.
"This government's focus when reviewing the minimum wage over this term has centred on the need to protect jobs while ensuring a fair wage," said Wilkinson today.
"Since being elected, we have raised the minimum wage by $1 - which equates to $40 a week."
She said that the latest increase, in conjunction with last year's tax cuts ensured that workers on the minimum wage have maintained the buying power of their wages.
"Taking a careful and balanced approach has helped prevent workers from being priced out of the market," she said.
Wilkinson said the government was intent on boosting jobs and creating an environment that is conducive to economic growth.
"Pathetic and insulting"
Labour Deputy Leader and Social Policy spokesperson Annette King said the government's "pathetic and insulting increase of 25c an hour in the minimum wage is another cruel blow for our most vulnerable Kiwi families."
"People need a living wage, King said.
"Last year John Key gave himself a tax-cut of more than $1000 dollars a week, but our poorest workers are being offered a derisory sum to cope with the sharply-rising cost of living.
"That puts National government priorities in devastating perspective. While wealthy New Zealanders are creaming it, thanks to National, Kiwis on the minimum wage won't even be able to afford to buy an extra litre of milk a day for their families, or even a block of cheese each week."
King said that Key promised that most Kiwis would be better off under National. However that was "rubbish" she said.
"Most workers are losing ground, not gaining it, while his rich mates have never been happier.
"Kiwi families face soaring increases in food prices, power prices, petrol prices, rising early education costs and government charges," King said.
"Those on the minimum wage have little or no hope of coping."
She said Labour believed that some relief for families was vital.
"That's why we'll lift the minimum wage to $15 an hour by the end of our first term. That's why we will cut the full 15 percent GST from fresh fruit and vegetables and rebalance tax cuts that gave little to struggling middle income earners but richly rewarded those at the top."
She said the gap between the top and the bottom in New Zealand was careering out of control, and "simply can't continue in the way it is under these policies."
The union campaigning for a $15 minimum wage agrees with Labour.
"John Key got a $70,000 pay rise this year these guys are going to get an extra ten bucks in the pocket a week, it's not enough to live on, prices are going up, food, petrol, rent," Omar Hamed of Unite told ONE News.
However the government says the rise equates to 2% and any more would come with a cost.
"If we'd gone to $15, nearly 6,000 New Zealanders on the minimum wage would have received the news they were on the dole queue," said Key today.
The government also says the economic recovery is still too fragile to handle a large increase.
The new minimum wage rate will come into effect on April 1, 2011.