The minimum wage is the legal floor beneath which no employee can be paid, and in New Zealand it directly sets the income of roughly 122,500 workers — concentrated in hospitality, retail, and care sectors. Under the Labour-led governments of 2017-2023 the rate surged from $15.75 to $22.70 an hour, well outpacing inflation. Since the National-led coalition took office in late 2023, the pace has slowed sharply, and union economists now argue successive increases below the rate of inflation amount to a stealth pay cut for the country's lowest-paid workers.

What's happening

• The adult minimum wage rose from $22.70 (April 2023) to $23.15 (April 2024, +2%), then $23.50 (April 2025, +1.5%), and $23.95 (April 2026, +2%) — a cumulative 5.5% under National across three years.
• Inflation ran at 2.5% in the year to March 2025 (Stats NZ), meaning the 1.5% 2025 increase was a real-terms cut of roughly one percentage point. The CTU estimates the cumulative real-terms loss since 2024 is $2,438 for a full-time worker, equivalent to about $28 a week.
• Under Labour (2017-2023), the minimum wage rose 44% in nominal terms, at roughly twice the rate of CPI inflation. As a share of the median wage it climbed from 62% in 2017 to 72% by mid-2023.
• The 2025/26 living wage — the independently calculated rate needed for basic necessities — is $28.95 per hour (effective September 2025), rising to $29.90 from April 2026. That leaves a $5.95 gap above the legal minimum, meaning the living wage is roughly 25% higher than what the law requires.
• Care and support workers sit directly at the floor: Level 0 (unqualified) workers earned the minimum wage itself in 2024-25 ($23.15-$23.50), and pay equity rallies in July 2024 drew hundreds of workers demanding fuller government funding for a settlement.

Where the parties stand

The National-NZ First coalition has set the tone with "moderate, balanced" annual increases — their phrase. Workplace Relations and Safety Minister Brooke van Velden announced each rise with language about "striking the right balance between supporting workers and limiting further costs on business," citing New Zealand's post-recession recovery, falling inflation, and the risk of dampening youth employment. MBIE's own review advice acknowledged potential employment restraint for youth (16-19 year olds are disproportionately on the minimum wage) as a reason for caution. ACT, the coalition's confidence-and-supply partner, went further: it campaigned in 2023 on a three-year moratorium on minimum wage increases, arguing rises should be tied to productivity, not the calendar. NZ First has floated a $25/hour floor with tax concessions for affected businesses, though this has not been legislated.

Labour has been vocal in opposition but has not yet published a specific 2026 election figure. The party's critique centres on real-terms losses: shadow ministers argue National's increases amount to real-wage cuts when set against inflation in rent (up 3.7%), rates (up 12%), household energy (up 7.2%), and groceries (up 4.3%). Labour has a track record of legislating above-inflation increases and extended living wage coverage to core public service contractors when in government. Ahead of the 2026 election Labour has promised to put affordability "at the heart of all decisions," but a specific minimum wage target has not been announced as of late June 2026.

The Green Party is the most ambitious: its workforce policy commits to lifting the minimum wage to the level of the living wage — currently $29.90/hour — an increase of more than $6 above today's legal minimum. Te Pati Maori holds the same position. Both parties argue the gap between minimum and living wage has become a poverty issue, not just a wage issue, particularly for Maori and Pasifika workers overrepresented in low-wage sectors.

The CTU has characterised each of National's three increases as "an effective cut" in real terms and calculated that if the minimum wage had kept pace with inflation since April 2024, it would be $24.80 from April 2026 — $34 a week more than the actual rate. CTU Acting President Rachel Mackintosh has said workers "deserve to be paid a Living Wage." BusinessNZ, by contrast, has backed the government's cautious approach, pointing to business cost pressures and warning that large mandatory increases risk accelerating automation or reduced hours in labour-intensive sectors like hospitality and retail.

The 2023 IMF Country Report on New Zealand found that minimum wage increases create significant wage spillovers above the binding level, particularly for men, and that New Zealand's real minimum wage is already roughly 55% above the OECD average — a context the government uses to justify restraint, and which unions argue reflects the high cost of living here.

What to watch

• Whether Labour publishes a specific minimum wage target before the 2026 election (expected late 2026) — a concrete figure will define the gap between the two major parties.
• The Stats NZ CPI release for the June 2026 quarter, which will determine whether the April 2026 2% increase was above or below inflation — setting the real-terms narrative heading into the campaign.
• Progress on the care and support workers' pay equity settlement: if the government does not fund a resolution, the sector will become a flashpoint for union mobilisation before polling day.
• Whether any employer groups report measurable employment or hours reductions linked to the cumulative wage increases — evidence that would shift the economic debate.