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"Living Wage Morally & Economically Correct" by 'Lets'

In a previous post I highlighted that Thames-Coromandel ranks 4th lowest for median household income, has raised incomes at half the rate of many similar rural Districts, and has levels of social deprivation at the extreme end of the scale.  Housing unaffordability is shockingly almost on par with Auckland. 

Many local families experience hardship or poverty despite having one or two adults in paid work. Of the 270,000 children estimated to be living in poverty in New Zealand, two in five come from households where at least one person is in full time work or self-employed.

It is simply not tolerable that a significant number of Thames Coromandel workers are part of the working poor.  The Council can play a critical leadership role by paying its own employees and contractors a living wage, and actively encouraging other local employers to do so.

Living Wage Aotearoa New Zealand defines the living wage 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.” 

Why should Council pay the living wage?  Because apart from the moral issue, the evidence shows it just makes sound economic sense.  Becoming a living wage council and encouraging other employers to do the same will improve the economic prosperity and quality of life of Thames Coromandel District.  A prosperous economic environment depends on consumers having the spending power to support local business.  The low paid workers who would benefit from receiving the living wage typically spend their entre incomes on retail and basic services. 

Wellington City Council has lead the way with implementation of the living wage and Auckland Mayor elect Phil Goff has pledged support for it in Auckland City, without raising rates.  The living wage has been successfully implemented by councils around the world.  International experience shows initial estimates of the cost are almost always higher than the eventual outcome. There are also significant benefits, including lower staff turnover and absenteeism, and boosted productivity.

Greater London Authority, showed “significantly lower rates of staff turnover” leading to “substantial cost savings on recruitment and induction training”.  There were also lower rates of absenteeism and sick leave, enhanced quality of work, and widespread efficient work reorganization. This was alongside significantly boosted worker morale and motivation and reputational benefits for the employers. It found “evidence of little or no impact on business performance”.

London’s Conservative ex-Mayor, Boris Johnson, is a strong advocate of the living wage movement:
“More and more London firms are recognizing the benefits of fair remuneration for all of their workforce. Paying the London Living Wage ensures hard-working Londoners are helped to make ends meet, providing a boost not only for their personal quality of life but delivering indisputable economic dividends to employers too. This in turn is good for London’s productivity and growth.”

Former local mayor and Employers Association CEO Alasdair Thompson supports a living wage

I am not aware of surveys of local candidates such as this one in Bay of Plenty, but I am told that a straw poll at the Thames candidates meeting had almost all candidates saying they supported Council paying a living wage.   This is line with public opinion.  Horizon Research’s 2013 Living Wage Insights Report, based on the views of 2,799 respondents, found that 69.7% expressed support for employers in New Zealand being encouraged to pay a living wage, with just 10.6% opposed.

Adopting the living wage fits with TCDC’s policies, embodied in its goals and its economic strategy to “make The Coromandel New Zealand’s most desirable place to live and work.”

What will it cost?  The costs will be modest, and do not necessarily result in an increase in rates, when placed alongside the option of funding it by tackling top salaries and other efficiencies. Council officials would be asked to lay out Budget implications and options.  Such options should include investigating funding the rise in the living wage through a cap on top salaries (including CEO and senior executive packages).

Will the new Mayor and Councilors have the cojones to implement a living wage plan?  Lets hope(s) so.

And … make things easy for the new Council here is a Proposed Resolution:-

THAT Council agrees:

1)      To adopt the following guidelines for implementation of the living wage at Thames Coromandel District Council:

  • The living wage will be implemented in this term, beginning on 1 January 2017.        
  • Tangible progress will be made from the start of implementation for direct, and contract employed staff earning below the living wage.        

2)      To implement the living wage in this term by:

  •  Committing to become an accredited living wage employer by November 2018
  •  Lifting all directly-employed staff to the living wage in this term

3) To ensure that, as contracts for services supplied to Thames Coromandel District Council on a regular and on-going basis expire, that a clause is inserted in tender documents requiring contractors to pay a living wage to all employees involved in these contracts.

4) To actively support and encourage Thames Coromandel employers to become living wage

5) To prepare a communications strategy highlighting the benefits of the living wage
to Thames Coromandel District

6) To spend $??? in this Annual Plan round on the first stage of implementing the living
wage for all directly-employed staff.

7) To make provision in subsequent Annual Plans to progress all stages of the implementation plan towards the goal of full implementation by November 2018.




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