Cost-of-living Crunch: Are NZ wages keeping up?

With the cost of living remaining a central concern for New Zealanders, the upcoming increase in the national living wage is set to play a pivotal role in shaping the country’s employment landscape in 2025. From 1 September, the living wage will rise to $28.95 per hour. As rising expenses continue to challenge households, this adjustment aims to ensure more workers can meet basic needs and live with dignity.

In a recent episode of Mahi Matters, Shannon Barlow was joined by Gina Lockyer, Executive Director at the Living Wage Movement Aotearoa New Zealand, to discuss the broader implications of the living wage hike. Together, they unpacked how it could affect job seekers, employers, and the economy at large.

"The living wage isn’t about luxury—it’s about dignity."

Lockyer outlined the movement's origins, rooted in community concern for the wellbeing of New Zealand’s lowest-paid workers. Since its inception over a decade ago, the Living Wage Movement has grown steadily, supporting both directly and indirectly employed workers such as cleaners and security staff.

"We believe basic needs are actually about being able to participate in society," says Lockyer. The living wage, calculated independently using a basket of data sets, reflects what is needed for a decent life—not just survival. It considers everything from healthy food and housing costs to community participation.

Employers who commit to the living wage often see direct benefits such as improved staff retention, lower absenteeism, and greater overall satisfaction. Lockyer shared that even employees earning well above the living wage feel more engaged when they know their colleagues are also being treated fairly.

Accredited living wage employers span diverse sectors—from hospitality and banking to local councils and healthcare. Lockyer praised businesses that go the extra mile to budget creatively to afford the living wage. "They put it at the heart of their business," she noted, adding that many now use their accredited status in recruitment advertising, reflecting a clear demand from job seekers.

However, not all employers are on board. While cost remains a primary barrier, Lockyer argues that the real question is whether businesses are willing to re-prioritise spending to align with their values. Those who make it work often find they become employers of choice.

The wider economic impact is also significant. Workers paid a living wage are less reliant on government support, reducing the burden on taxpayers. Meanwhile, studies show improved mental health, reduced stress, and better workplace performance among those paid fairly.

In a labour market where job security fears still linger—40% of Kiwi workers report concerns—the living wage provides not just financial stability, but a signal of respect and value. As Lockyer explains, "People want to work in a place where they know everyone is being respected."



Employers interested in becoming accredited can find more information at livingwage.org.nz, which lists all current accredited businesses. For job seekers, it offers a valuable reference point in choosing supportive and ethical employers.

As economic conditions slowly improve, the living wage movement continues to remind New Zealand of a simple truth: fairness at work doesn’t just help individuals—it uplifts the entire community.