Minimum wage up 50c

The Government has moved to increase the minimum wage by 50c to $12.50 per hour today, in an attempt to find a balance between protecting jobs and fair pay for workers.

Labour Minister Kate Wilkinson said the increase was in line with the consumer price index and maintaining the buying power of workers was an essential part of combating the economic downturn.

"We do not want to see workers priced out of the market during these difficult times, but we are confident that a 50c increase ... will not harm businesses," she said.

Director of Unite Union Mike Treen says he is thankful there has been an increase, but feels maintaining the minimum wage in line with inflation is inadequate in the current economic climate.

"The problem we have is that the bald cost of living index [consumer price index] is not an accurate measure of people living on the minimum wage.  They spend a disproportionate amount on food, transport and rent which has been increasing at a much faster rate in recent years than the CPI," says Treen.

The union has the goal of increasing minimum wages to two-thirds of the average wage, which at today's rates would be $16 per hour.

Training and new entrants' minimum wages were increased by 40c, from $9.60 to $10.00.

The new minimum wage will come into effect on April 1 this year.