The Employers and Manufacturers Association says the living wage is meaningless.

The living wage rate for 2018 has been announced as $20.55.

It's calculated every year by researchers and is voluntary for businesses to take on board. 

However, EMA Head Kim Campbell says the number is an artificial construct which businesses ignore.

He says people's pay should be dependant on their skills and hours, not on a number that's been picked out of the sky.

"It's not an economic discussion. It has nothing to do with the economy or productivity or people producing more, or the economy's ability to pay it."

Campbell says there's a risk the living wage could see New Zealand business become uncompetitive.

He says it won't benefit society as a whole if labour costs increase at a faster rate.

"Tremendous success the New Zealand economy has had in the last few years has been our very flexible working arrangement,s which has made us very competitive as an economy with the rest of the world."

Meanwhile, the Council of Trade Unions says an increase in the living wage signals our minimum wage isn't high enough to meet living standards.

President Richard Wagstaff businesses should adopt the voluntary wage if they care about employees' quality of life.

"People shouldn't be living in poverty when they have a full time job.
Employers who have no concern about the living standards of their staff is very disappointing."