Minimum Wage Is Not Enough!

Prue Hyman

Prue Hyman says more is needed than the April 1 increase in the minimum wage.

Those on benefits miss out

In this month’s column, Prue says  April 1 was a reasonably big day for NZ working people, less so for those dependent on the benefit system.

The minimum wage rose by $1.20 to $17.70 an hour; all benefits, and NZ superannuation increased as well.

But benefits increase only by the cost of living, whereas superannuation rises by the higher increase in wage levels. So benefits continue to fall behind.

The extra $25 weekly which the last National government added to benefits and made a big noise about, did very little to bridge the gap caused by the different methods of indexation over many years.

Minimum wage is tough to live on

Of course the minimum wage is tough to live on, especially where only one wage comes into a family with children.

The Living Wage movement does a great job of calculating what is really needed for an adequate, if modest, standard of living.

It announced last week that the level would increase from $20.55 to $21.15, effective from 1 September. That $3.45 per hour extra over the minimum wage, little as it sounds, is enough to help out low wage workers significantly, as many whose employers have signed up testify.

The Living Wage movement

The original NZ Living Wage announced in 2013 was constructed on the basis of spending items for a modest weekly budget, with annual updates between five-yearly reviews reflecting wage movements.

A full five-yearly review was carried out last year. New research enabled a more accurate assessment of items like energy and health costs. Higher housing and energy costs were offset by the Families Package that increased disposable income for families with dependent children.  

The living wage is defined as: The income necessary to provide workers and their families with the basic necessities of life. A living wage will enable workers to live with dignity and to participate as active citizens in society. This figure sits modestly at 68 percent of the average hourly earnings in New Zealand ($31.08).

Cheers for Seashore Cabaret

A big cheer to the Seashore Cabaret on Petone’s Esplanade which hosted the announcement of the new level and has recently become a living wage employer.

The number of employers who have signed on and demonstrated their compliance, for contractors as well as direct employees, is steadily increasing.

It now includes some large employers, like Westpac and AMP, including many small businesses for whom the commitment is a major step.

Local Government coming on board

Local government is gradually coming on board, with Tauranga having gone as far as ensuring all direct employees are paid the living wage, involving increasing the pay of 31 employees. Wellington City Council are now fully accredited.

KCDC  says it’s ‘fair’ but doesn’t have a LWP

But the KCDC does not have a Living Wage policy.

Dianne Andrew, Organisational Development Manager says:

“We do not have a Living Wage Policy as such but we do not pay less than the minimum adult wage.

“We aim to pay all our staff fairly and appropriately based on what is expected of each role.”

 

 

 

I go by what Henry Ford said who treated his workers with care. In 1914 he implemented a $5 daily wage for them, almost twice the rate other car factories paid their workers. Ford believed that increasing the pay would make the workers happier and encourage them to work faster.

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