Inflation Data Confirms Real Terms Minimum Wage Cut

The NZCTU Te Kauae Kaimahi is concerned for low-income workers given new data released by Stats NZ that shows inflation was 2.5% for the year to March 2025, rising from 2.2% in December last year.

“The prices of things that people can’t avoid are rising – meaning inflation is rising faster for those on low incomes,” said NZCTU Economist Craig Renney.

“Inflation was driven by increases in rents (up 3.7%), rates (up 12%), household energy (up 7.2%) and insurances (up 8%). Grocery prices were also higher, rising 4.3%.

“Earlier this year, the minimum wage rose by 1.5% - a full 1% less than actual inflation. This is the second year the Government has increased the minimum wage by less than inflation, which means that a full-time minimum wage worker is now cumulatively $2,438 worse off in real terms. Minimum wage workers are missing out on $28.36 a week because of the Government’s decisions.

“The Government is considering removing the Living Wage guarantee for government contractors who are caterers, cleaners, and security guards. This data shows why that protection is so important - working people can’t rely on this Government to protect them through the Minimum Wage.

“With 46% of workers receiving a pay rise less than inflation last year, it also shows that many working people are still doing it tough. Unemployment is still rising, with tens of thousands of more people on Jobseekers Support. It is clearly not workers who are benefitting from the very little economic growth is being delivered.

“This data is another piece of evidence about who is winning and losing in the economy. The poorest working people are facing higher costs they can’t avoid – but with less money to pay.

“Workers need a change in direction and a government that will actively address low pay, unemployment, and poverty - it’s time for a different approach,” said Renney.

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