$18.40 an hour needed for living wage

Kiwis need to earn nearly $5 more than the minimum wage to meet the "basic necessities of life", a new report has found.

The living wage for New Zealanders has been set at $18.40 an hour in the report released today, which is well above the $13.50 minimum wage.

Defined as the "income necessary to provide workers and their families with the basic necessities of life", the wage will form the basis of a community-driven campaign for employers to adopt a living wage policy.

The wage was calculated as the necessary income for a two-adult, two-child family and is based on both adults working, one full-time and one part-time.

Report author Charles Waldegrave, of the Family Centre Social Policy Research Unit, said the wage was well above the minimum wage, because it was about setting an income level that enabled people to live modestly while still contributing to society, rather than simply surviving.

The wage was calculated on a modest household budget where people could buy the basics, spend time with their families and enjoy occasional recreational activities, such as a monthly trip to the movies.

It was about being able to "have a decent, but modest family and community life", he said.

"Being able to have a computer in your home . . . being able to pay for a school trip, being able to have modest insurance."

Unions and community groups are campaigning to get employers to adopt a policy by which they work towards all staff earning at least the living wage.

Service and Food Workers Union national secretary John Ryall said the campaign would work on persuading employers to adopt the living wage rather than seeking legislation to do that.

A voluntary approach meant employers would buy into the concept and accept that paying employees amounts that enabled them to support their families had both economic and social benefits, with lower staff turnover and higher productivity among the payoffs for bosses.

Wellington supermarket worker Cheryl Hohua said a living wage would allow her to spend time with her children, whom she now saw only about one day a week. The rest of the time she was sleeping or at work.

She is the sole provider for four teenagers and works three jobs. She earns about $15 an hour at the supermarket, and has two other jobs doing merchandising at a slightly higher rate.

"The difference it would make for my family would be helping with food, housing, hobbies for my kids, like music lessons, and attending holiday programmes."

Other community groups - including churches and student associations - are also campaigning for the living wage alongside unions.

Victoria University of Wellington Students' Association president Rory McCourt said a living wage would enable students to focus on study rather than making ends meet.

"Low wages mean students spend more time at exhausting jobs rather than concentrating on their studies."


Wellington food chain KaPai wants to see 75 per cent of its workers on a living wage within three years.

The company, which opened its fourth store last year, wanted to help staff reach their potential, by ensuring they had a decent family and community life, co-founder James Irvine said yesterday.

"We were thinking 75 per cent [of staff] in three years, and then 100 per cent in five years."

The changes would have to be staged, as introducing a living wage straight away would be unaffordable.

Other aspects of the business, such as its prices, might need to be adjusted to compensate for the extra wages, he said.

"Businesses can't just suddenly pluck money out of thin air, so we have got to grow the business towards it."

Business partner and city councillor Justin Lester said it was about finding a balance between the cost to customers, the business and a fair wage for staff.

"There's always a compromise - if you're paying staff more, things tend to cost a little bit more as well."

The Dominion Post