Living Wage rate rises above new minimum wage to support struggling workers

01 April 2021

Living Wage Aotearoa today announced the new Living Wage rate for 2021/22 is $22.75. This is
above the new adult minimum wage of $20.00 per hour which came into effect today.

The Living Wage has emerged as a response to growing poverty and inequality that continues to
hold back many Kiwi workers, their families and the economy.

The new rate is an increase of 65 cents on the 2021/22 Living Wage rate and sits modestly at 68
percent of the average hourly earnings in New Zealand ($33.33).

Gina Lockyer, Chair of Living Wage Aotearoa, says:
“Today we are celebrating the work done by researchers to calculate the rate, the work done by
employers to lift the wages of their workers, and the work of our Living Wage Movement in making
it all happen.

“Most of all, we are celebrating the fact that today thousands of workers at more than 240 Living
Wage Employers around Aotearoa can look forward to a pay increase that reflects the true cost of
living in our society.”

Today also signals the launch of the new Principal Partner Council, a group of Living Wage
Employers supporting the Living Wage Movement’s efforts across their sectors.

“Our movement is made up of community organisations, faith groups, and unions who have been
putting in work on the ground. Having employers also pick up the mantle is a real sign that positive
change is on the way,” says Lockyer.

Blair Vernon, Chief Executive of AMP Wealth Management, the first KiwiSaver provider to become
an accredited Living Wage employer and an inaugural member of the Living Wage Principal
Partner Council says:

“Financial wellbeing is an important part of overall wellbeing and we know many New Zealanders
either don’t have enough money to get by, only just have enough, or have sought help in the form
of food, clothes, or money from an organisation, such as a church or foodbank1.
1 https://www.stats.govt.nz/news/most-kiwis-still-doing-well-but-some-struggling

“We believe all New Zealanders should be empowered to live with dignity and be able to realise
the benefits of working hard, and employers have an important role in helping to making that
happen.

“Paying the Living Wage is often overlooked as part of many businesses’ broader commitments to
sustainability and wellbeing and it’s time for more employers to take responsibility for improving
outcomes for their people and their families by paying a Living Wage.”

The new Living Wage rate comes into effect on 1 September 2021. The rate was calculated by
Charles Waldegrave, Coordinator and Lead Researcher at Family Centre Social Policy Research
Unit.


- ENDS -


Notes for media:

Join us at a special event to announce the new Living Wage rate

If you would like to attend the special event in Wellington on Thursday, 1 April from 12-1pm, please
reply to this email for details. The event will be attended by Hon Grant Robertson and other
politicians, as well as small and large Living Wage employers, plus volunteers from Living Wage
Aotearoa, many of whom have some amazing stories to share about how they and others benefit
from being paid a Living Wage.

How is the Living Wage calculated?

The original Living Wage announced in 2013 was constructed on the basis of expenditure items for
a modest weekly budget. However, once the living wage rate became a wage mechanism within
the labour market, it was decided that annual updates between five yearly reviews should reflect
wage movements. A full five yearly review was carried out in 2018. New research enabled a more
accurate assessment of items like energy and health costs. Higher housing and energy costs were
offset by the Families Package that year which increased disposable income for families with
dependent children.

Wage movement is reported by Statistics New Zealand in the Quarterly Employment Survey
(QES). To be consistent, the annual update is based on the percentage wage movement for the
year to June the previous year because when the first living wage was calculated the year to June
was the most up-to- date figure.

The QES measures the average hourly wage bill across all jobs in New Zealand. The average
ordinary time hourly earnings for the year to June 2020 increased 3 percent from the year to June
2019.

The rate of $22.75 is the recalculated New Zealand Living Wage for 2021/22. The movement in the
average ordinary time hourly rate, as provided by the QES, was 3.0 percent leading to an estimate
of $22.76 which was rounded down to $22.75.

This figure sits modestly at 68 percent of the average hourly earnings in New Zealand ($33.33) for
the same quarter. The QES does not provide median hourly earnings. The Household Labour
Force Survey (HLFS) for the same quarter, showed the Living Wage to be 84.3 percent of median
hourly earnings from wages and salaries ($27.00).

More about the Living Wage

The Living Wage rate is voluntary. The first Living Wage campaign was launched in 2012 in
Auckland and in Wellington followed by other local networks around the country. Supporting
organisations joined forces around a statement of commitment to a Living Wage. More than 200
groups agreed.

In April 2013 an incorporated society was formed called Living Wage Movement Aotearoa New
Zealand with a governance body and membership comprising the three streams of civil society:
faith based religious groups, unions and community/secular groups. In the same year independent
research by the Family Centre Social Policy Unit established the first Living Wage rate for New
Zealand, $18.40 per hour.

The Living Wage Movement is not aligned to any political party but seeks to influence those who
have the power to change the lives of workers and their families. The focus of attention is where
incomes are funded through public money, the large employers who can afford to pay a Living
Wage. Many small and ethical employers choose to pay a Living Wage and have become
accredited.

Media enquries

AMP Wealth Management
Ben Mabon
+64 27 406 2048

Living Wage Aotearoa
Gina Lockyer
+64 27 474 6918

For further information please contact

027 406 2048