21 Feb 2017

New living wage rate almost 30% higher than minimum wage

From Morning Report, 7:35 am on 21 February 2017

The 'living wage' rate is to rise to $20.20 -  which is $4.45 higher than the new minimum wage announced last month.

Campaigners say that's the rate workers now need to provide their families with the basic necessities.

The Fresh Desk cleaning company staff, from left, Caroline, Helen, Krissie and Nicole.

The Fresh Desk staff (from left) Caroline, Helen, Krissie and Nicole. The company is an accredited living wage employer. Photo: Supplied

Krissie, a cleaner for The Fresh Desk company in Lower Hutt, is paid the current living wage of $19.80 an hour. She said it had made a huge difference to her life.

On 1 April, the adult minimum wage will increase by 50 cents to $15.75 an hour.

The higher hourly living rate made Krissie feel valued as a worker, she said.

"I've been working for other companies where as time went on you were given more work for less pay. In the meanwhile, bread's going up, milk's going up, power's going up."

Sixty-four companies in New Zealand are accredited as living wage employers.

One of them is Auckland tech company Wherescape, which was founded by Michael Whitehead.

Staff earned more than the living wage and the company made a commitment to pay contractors, like cleaners, the living wage.

Mr Whitehead said this was one way hi-tech firms could support low-waged workers.

"We want our offices cleaned or secure and we're happy to pay a living wage for it.

"People have to live in Auckland and it's really expensive and so I want people to carry on being able to clean our office, it's a necessity."

Michael Whitehead said he paid a higher price to the cleaning company, which was then passed on to each individual cleaner.

Kim Campbell of the Employers and Manufacturers Association was not convinced the living wage was the best way to improve low incomes.

"This Living Wage thing, which is generally being encouraged by monopolies, which are city councils and then telegraphed throughout the economy is a very foolish enterprise."

It was not reflected in any increase in productivity, was a "political handout" and "in many ways misleads the public into a false sense of security".

Mr Campbell said some people would be worse off as they may lose benefits when their income increased.

New Zealand already had one of the highest minimum wages, but if a company wanted to pay its workers more, it should just do it, Mr Campbell said.

Living Wage national convenor Annie Newman told Morning Report people on the hourly pay rate are able to spend more time with their families, rather than having to work continuously.

Companies are being encouraged to pay the new rate from July the first.