The Government will honour its election promise of raising the minimum wage. From the first of April next year the rate will increase to $20 per hour - up from $18.90.
For someone working 40 hours on minimum wage, the boost means $44 extra in the bank each week.
Workplace Relations and Safety Minister Michael Wood confirmed the increase on Wednesday.
He told Morning Report on Thursday the timing is right, despite the recent pandemic-induced economic shock.
Wood said upping the minimum wage would help the economy as those earning it would spend it on local goods and services. He received advice it could mean around 8000 to 9000 fewer new jobs created.
He didn't want to pass judgement on whether businesses are viable if they cannot afford to pay staff $20 an hour, but in general wants to see NZ move away from paying low wages.
"We want businesses to be sustainable and to be able to support employees with a decent wage. I think for too many years New Zealand has been something of a low wage economy. That's not who we are as a people, that's not who we want to be. And actually, it's not the way towards a really productive economy that's good for everyone."
