Minimum Wage Workers in New Zealand: Who are they?

Abstract

The New Zealand minimum wage rate has recently experienced a sustained period of growth that looks set to continue under the current Labour-led government. Since 2002 the adult minimum wage rate has increased by 28% from $8 and hour to the current rate of $10.25. This rise in the minimum wage has outstripped average wages, which increased by 15% over the same period. This paper uses the New Zealand Household Labour Force Survey and its Income Supplement to identify minimum wage workers and describe their demographic and job characteristics. In particular, the paper examines changes in the characteristics of minimum wage workers between 2002 and 2005. Minimum wage workers, over this period, are relatively young (over a half are aged 16-25 years), predominantly female, working part-time and are likely to be employed in a Services and Sales related occupation and in the Retail and Hospitality industries. Between 2002 and 2005 there was a three-fold increase in the share of wage and salary workers identified as minimum wage workers. Minimum wage workers in 2005 were slightly older and more likely to be female, compared with 2002. In particular, the share of married females among minimum wage workers doubled and there was an increase in the share of minimum wage workers in the Health and Community Services industry sector.