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Monday
Oct172016

'Living Wage' Issue now Live 

“Lets” has opened up the ‘Living Wage’ Pandora’s Box with the preceding post, and with a new Council having its inaugural meeting on 26 November, there will shortly come a time when this issue will need to be faced.

The concept of low, or ‘basic’ wage workers running round the District undertaking un-skilled, or low-skilled tasks like road maintenance, or rubbish collection is of course out-dated. It then remains to analyse the practices of the contractors that have taken over this work in virtually every Council in the country.

We of course have no way of knowing what constitute the remuneration practices of these contractors, but with egregious examples being brought to light involving exploited sections of the population, including those working under immigrant visas of various categories, it is imperative that our councils take steps to ensure that such arrangements are not used by current or potential contractors to bypass, or exploit the situation.

The actual make-up of the ‘living-wage’ remains in contention of course – what we do know is that there has been a substantial increase in salaries within our own Council that should give “Lets” some cause for thought, and perhaps another post later on issues surrounding equity in the setting of various remuneration levels. This is what I wrote in a post dated 26 June 2016, the content of which has never been disputed:

“One that should give rise to considerable concern is the substantial increase in personnel costs from  $14.890m to $16.737m - a 12.4% increase over those paid in 2015/16. If we accept the staff numbers at around 220 (debateable), that is an average of $76,000 per employee - not bad considering every aspect of the average work-load, and professionalism that we have seen demonstrated, with some notable exceptions.”

Perhaps all councils should be required to suspend salary increases while ‘living-wage’ provisions are enacted to ensure that all contractors are required to guarantee that ‘living-wage’ levels are incorporated in their tender documents. This will require a credible form of calculation to be devised to establish exactly what that ‘living-wage’ should be - so far, the calculation appears to have been conjured up by an activist Anglican priest, and widely adopted without transparent verification.

Suspending salary reviews while this takes place should at least ensure that the pressure on rates is cushioned from the consequences of tender inflation resulting from the enactment of 'living wage' provisions in contracts. 

One aspect of governance throughout the local government sector that is jealously guarded by chief executives is their prerogative to set staffing levels, and salaries. Councils generally only get a ‘look-in’ through their ‘remuneration committee’ that only gets to set the salary of the Chief Executive. But this concept is really quite out-dated, and leaves excessive power in the hands of the chief executives to manipulate senior salaries – particularly when these are public institutions.  Here is another exert from the 19 June post:

"It would be interesting to see a comparison done with other comparable councils. I would suggest that such would be very revealing, and demonstrate a high level of troughing that generally starts at the top. Lack of Council oversight provides a wonderful opportunity for increases that are totally self-generated within the organisation, and in no way related to market conditions.”

Guidelines provided by Local Government NZ through national surveys of similar positions are nothing more than a further self-reinforcing means to ratchet up salaries throughout the sector. It is long overdue for this system to be reviewed, and rate-payers given more protection than is currently available through self-serving agencies.   

Let us see who amongst the our councillors – old or new, has the courage to broach the subject – it would require  a ’notice of motion.’

 

 

 

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Reader Comments (10)

The current hourly rate for a living wage in NZ is $19.80 and has been adjusted for wage inflation since 2013.

In order to calculate a Living Wage (LW), a household unit of two adults and two children was chosen. It was also assumed that one adult would be working full-time and the other half-time. The LW is set at an hourly rate for a full time market wage that in conjunction with the other adult’s half time wage is sufficient to provide the level of after-tax income required to meet the household’s reasonable needs.

A transparent budget with standard itemised costs for the household was produced. Independent New Zealand databases drawn on included the annual Food Cost Survey carried out by the University of Otago’s Department of Human Nutrition, the Ministry of Business, Innovation and Employment’s Rent Bond database and Statistics New Zealand’s Household Economic Survey.

Doesn't sound like "conjuring up" or unverified ? There may have been a few quibbles around what to include in a household budget but the LW rate has been widely accepted as robust and reasonable. Also, the concept has been implemented in USA UK and Canada for some time now, where there is evidence that it has achieved more equitable range of salaries/wages between the highest and lowest paid employees

October 17, 2016 | Unregistered Commenterlets

Okay 'Lets,' I accept in broad principle the concept of the 'living wage,' but I simply cannot accept that the Rev Brian Waldegrave is sufficiently qualified to provide credibility to the methodology adopted in arriving at the figure. It needs to be rigorously developed, and defended based on local conditions if it is to carry weight to the degree necessary to have it accepted in circles where skepticism prevails - namely the TCDC if I am not mistaken. This is not Labour territory as is now the case in the three major cities, where electoral expediency demanded acquiescence to the concept - it will require far greater attention to taking the argument beyond generalities.
That is my opinion, and I think you will find that it is one that is widely supported by people who want it tied down to a tangible, defendable concept. The cost of living, mortgages, rentals and other factors, some of which you have touched on certainly need to be included.
All that is required is that they get on with it - it can't be that difficult, and frankly, I don't think it will in any way financially onerous, particularly if the upper echelon 'take their medicine!'
Bill

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October 17, 2016 | Registered CommenterBill Barclay

Bill, I am thrilled you support the general concept of a living wage and agree with your wish "they get on with it".

Gisborne, Porirua and Hutt Councils are considering implementation, Wellington Regional Council has resolved to introduce it, and a growing list of private employers have become living wage accredited. The Catholic Church in Auckland is distributing material to its parishes strongly supporting the concept. They all seem to accept the methodology behind it and the figure of $19.80 an hour as tangible and defend-able.

It's time for our new Mayor and councillors to put their money where their mouth is and adopt a Living Wage in 2016. If they can't do that, they should cancel the mission statement in the Economic Strategy to make "The Coromandel NZ's most desirable place to live and work" For those on the lowest incomes, our district is not that desirable at all.

October 17, 2016 | Unregistered Commenterlets

The major flaw in the proposal is to apply across the board a theoretical proposition which is derived from the needs of a 2 child nuclear family. This construct is probably now in the minority. And anyway this hypothetical family is well provided for by 'working for families', tax credits, and the accommodation supplement.
The unintended consequence is that young workers become too expensive to employ. And employment of young workers is a major issue in NZ (big companies like Bunnings, and Mitre 10, are preferring to employ older people). The Living Wage proposition is promoted by those who believe in extreme wealth redistribution and has no logical justification; it is just another slogan.

October 18, 2016 | Unregistered CommenterPeter S

Working nuclear families with one full time and one part time parent can hardly be 'well provided" when 2 out of 5 children living in poverty come from such families. These are the working poor - despite the assistance from Government.

Yes it is a small dose of wealth distribution - hardly "extreme" though when all it asks is that workers are able to afford the basis necessities of life.. Want extreme wealth redistribution ? How about the massive transfer of income and wealth to the top 10% since Douglas, Richardson and Brash began their failed experiment with trickle down neo-liberalism?

As for "no logical justification" would you not want your staff to be more loyal committed productive and content? - which is the well documented outcome where a living wage has been introduced.

October 18, 2016 | Unregistered Commenterlets

If a company wants its staff to be more loyal, committed, productive and content' and recognizes this can be achieved with higher pay then wages will be increased. The problem ( amongst others) of the Living Wage is that the proponents want to do it with Other Peoples Money - Local Authorities have no business meddling with the employment market just because a few elected members have some sort of ideological imperative. It has been noted that one of the Wellington City Councillors voted for the Council to implement the Living Wage but refused to pay his own staff accordingly ('cannot afford it' was the cry.).

October 18, 2016 | Unregistered CommenterPeter S

Fine Lets, pay a 'living wage' but this will mean that we will all pay through our rate demands, for Council is not or should not be a profit making organisation.
Before we rush into paying a 'living wage' could somebody please tell us just how many staff are employed by TCDC and how many of those are working for less than the 'living wage' rate?
Council shouldn't be involved in social engineering or redistributing so the called wealth of the retirees who have come to the Peninsula to live out the rest of their earthly life.
Socalism is alive and well or so it seems

October 18, 2016 | Unregistered CommenterRatepayer

Paying a Living Wage is entirely voluntary. Not to be confused with the minimum wage. The Council as an employer can decide for itself it wishes to pay sufficient for all its workers and contractors to live with dignity and reap the benefits of substantial cost savings on recruitment and induction training, lower rates of absenteeism and sick leave, and enhanced quality of work. If this is meddling in the employment market then meddle away. As my blog posts suggests this can be done by capping top salaries at minimal or no cost

I agree socialism is alive and well.... our health, education, justice, and defence systems, National Super, public transport all great examples.

October 18, 2016 | Unregistered Commenterlets

A Council is representative of ratepayers; paying rates is not voluntary. Councils are not entitled to syphon off rates to satisfy the political agenda of a few; especially when the objective is way outside the council's responsibilities to ratepayers. If a Living Wage is such a good idea the proponents should donate money to their own organization which could then distribute funds where need is identified.

October 19, 2016 | Unregistered CommenterPeter S

Kudos once again to "Let's" for putting the living wage issue squarely before our new council.
As for the claim of "extreme" distribution of wealth, and contrary to the complaint of Peter S, the living wage issue was not borne of any radical agenda. As income inequality and poverty have dramatically increased in the last two decades-plus, some have urged policies that enable all hard-working members of our communities to fully participate. Yes...that simply means being able to enjoy a film once a month, or a healthy and nutritional grocery basket for the family. This is not radical or extreme. It is about fairness and decency and justice. Just check the cost of these basics, if you will.
As for the question of affordability and ratepayer value, there is no question that the money to implement a TCDC living wage is already right there in the budget. Just look at the squandering of public, ratepayer money during the previous mayoralty, with such outrages as $40,000 handouts for private petrol-head events or thousands handed to a local radio company to "sponsor" a very minor event, without even going through proper process. . Don't even begin to count the profligate waste on so-called "economic development" that benefits a very few and transfers wealth upwards.
The fact is, the money is there. It's about moving the expenditure from Column A to Column B.. It's time to deliver a fair living wage for all council workers and contractors. It's do-able and a laudable objective.
Let's make this council a leader in progressive social policy and practice.

October 19, 2016 | Unregistered CommenterGeoff Robinson

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