Living wage 'impractical'

KAROLINE TUCKEY
Last updated 10:03 19/02/2013

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Lower Hutt researchers' calculations of a Living Wage of $18.40 an hour are an unrealistic trade union stunt, the head of the Hutt Valley Chamber of Commerce says.

The figure was announced on Thursday by the Living Wage Campaign as the hourly wage needed for a couple working fulltime and part-time to support themselves and two children "to live with dignity and to participate as active citizens in society".

It was provided to the Service and Food Workers Union's campaign in a report authored by Lower Hutt social policy researchers Charles Waldegrave and Peter King of the Family Centre. HVCC chief executive David Kiddey says raising wages from the minimum wage of $13.50 to $18.40 an hour would cause massive unemployment in Lower Hutt and limit new job creation.

"It's certainly not practical . . . whether or not it's fair is not something I can't comment on."

While many industries already pay more than $18.40 an hour to skilled workers, employers of unskilled workers, and in particular local retailers, could not meet the figure in the current economic climate.

"Retailers are currently struggling to make a decent profit, and if their staff costs went up like that they would be going down one after another."

Low earners who want better living conditions should look for a better paid job or upskill - though some will not have that ability, he concedes.

The best way to improve Lower Hutt workers' financial situations is by strengthening the financial position of employers by seeking increased productivity, he says.

"When the local and world economy pick up - and they will, then it does give the opportunity for increased productivity.

"[Then] as demand for labour goes up, particularly skilled labour, wages will go up too, so the market for a particular type of worker goes up."

The campaign is no different to annual calls to increase the minimum wage, except that the figure it calls for is "excessive", he says. However, Petone-based Green MP Holly Walker says it's not acceptable to take a fatalistic attitude to the lot of low skilled workers, and there is a business case for a living wage.

"I think that's really dangerous for a society, it does lead to that them and us thinking, and it doesn't acknowledge that we're all in it together, and if we can have a fairer, just system it benefits all of us.

"There's quite a lot of evidence from overseas that paying a living wage is actually good for businesses. It means that your employees are healthy and take less sick days; they feel a greater sense of investment or ownership in the business and staff turnover will be less, and employees grow their skills while they work for you."

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Some businesses have already taken up the challenge, including Wellington sandwich and salad chain Kapai, which plans to have all its workers on a living wage within five years, she says.

- Hutt News

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