The Government says it won't be backing a campaign to introduce a living wage.
Unions are planning to launch a campaign later this week to push for a living wage, or the minimum amount a person requires to live on.
The proposal is expected to be for an hourly wage of between $18 and $20 (the current mininum wage is $13.50).
Prime Minister John Key says he would encourage companies to pay more to their employees if they can, but the idea of a living wage is very subjective.
"It's like the mininum wage," he says. "I mean, some people who are on the mininum wage have it as a starting-out point and it's a very important stepping-stone to where they go; for others it's more their long-term pay because of the nature of the job they're doing.
"So I don't think we'll be running [with] the advocacy campaign - it's up to the employers what they choose to pay."
Labour, employers broadly supportive
While the Labour Party supports the idea, leader David Shearer isn't budging from the minimum wage level his party has campaigned on.
He says the mechanics of the living-wage idea would have to be worked through.
The Employers and Manufacturers Association says it's broadly supportive of the campaign, saying some employers can and should pay their staff more.
But it says other businesses are in a weaker position and being forced to pay 20-30% above the minimum wage could put them out of business.
Listen to more
International campaigner urges introduction
An international campaigner for a living wage is urging unions and community groups to push for it in New Zealand.
Deborah Littman, who was part of a successful campaign for the wage in Britain and is now leading a similar movement in her native Canada, says studies in Britain show the introduction of a living wage has benefited 100,000 low-paid workers, boosted productivity and reduced staff turnover.
She says it also helps central government by reducing unemployment, crime and health costs while raising the tax take.
On Monday Ms Littman spoke to a crowd at the Wellington City Council building which included the mayor, Celia Wade-Brown, some councillors and representatives of unions, churches and student groups.
Children reduced to 'diet of noodles'
The Mangere Budgeting Services Trust in Auckland says a living wage is needed, as more and more children are living on a diet of two-minute noodles.
Chief executive Darryl Evans told Nine to Noon some families are spending 60% of their incomes on rent, and relying on food parcels. He says middle-class families are also struggling.
Mr Evans says that in severe cases up to three families are living in one house, and children are not going to school because parents can't afford to buy their stationery.
Listen to more on Nine to Noon
The campaign for a living wage, believed to be between $18 and $20 an hour, will be launched by the Council of Trade Unions (CTU) on Thursday.
It is being driven by the Service & Food Workers Union, following a report that found about 40% of employees earn less than $20 an hour.
CTU president Helen Kelly told Morning Report the campaign will target major employers, many of whom, she says, can afford to pay more.
Listen to interview with Helen Kelly