The minimum wage is set to rise from March next year, the Government said today.
The minimum adult wage will go up from $9.50 to $10.25 an hour and the minimum youth wage -- for workers aged 16 and 17 -- will also increase by nearly 8 per cent, from
$7.60 to $8.20 an hour.
Minimum wage rates are reviewed annually and Labour Minister Ruth Dyson said the Government's goal was for the adult minimum to reach $12 an hour by the end of 2008 depending on economic conditions.
The youth minimum wage is 80 per cent of the adult rate.
Ms Dyson said the increase would benefit about 91,000 adult workers, most of them women, and around 10,000 youth workers.
"It can be made with confidence in the current economic and labour market conditions, without being at the expense of jobs," she said.
"With three months till the changes come into effect, businesses will have time to prepare for the changes."
The Council of Trade Unions (CTU) said the increase was an important step towards a $12 minimum wage.
"Unions will continue to campaign for public support for a $12 minimum wage and the abolition of youth rates," said CTU president Ross Wilson.
"A $12 minimum wage is not unreasonable and would still be below a rate of two-thirds of the average wage."
Mr Wilson acknowledged that the Labour-led government had increased the minimum wage 46.4 per cent since 1999, which he said was in stark contrast to National freezing it at $7 in the late 1990s.
- NZPA
