Councillors fear wage boost would cost other jobs

18:57, Mar 25 2014

Businessman Paul Barris has teamed up with Tertiary Education Union member Lorna Johnson to urge the Palmerston North City Council to pay all of its workers a living wage.

At the end of last year about 136 council staff were earning less than the $18.80 an hour campaigners recommend to enable families to pay for the necessities of life, live in dignity and participate fully in society.

But city councillors are worried the change would increase the rates burden for those earning less than the living wage, or lead to redundancies. Mr Barris and Ms Johnson led a deputation to the council's finance and performance committee yesterday, arguing that the council should set an example in moving toward becoming a living wage employer.

Ms Johnson said ensuring no workers received less than $18.80 an hour could be done in a way that was financially prudent and would have benefits for productivity and for the city's image.

But above all, it was the right thing to do, she said.

And Mr Barris said the cost of making the change, estimated by chief executive Paddy Clifford at $353,000 a year, could be managed without increasing rates.


He said the council's staff costs varied from budget every year, and the amount it would take was small compared to the overall staff budget of nearly $35 million.

"What I see is more than 100 people don't make ends meet, and another 22 earn over $100,000, and in some cases those lower paid are working harder."

Ms Johnson said the idea that the change would cost up to $4.3m if all staff wages went up to maintain relativities was a red herring.

"That is not what we are asking for."

She said there might be cases where increasing workers' pay would mean a rise for their supervisor as well, but there was no need for those increases to flow all the way up to group managers.

Councillors were asked to do no more than receive the deputation, and there is no formal recommendation on the council's agenda.

Mr Barris said after the meeting this was frustrating. He said it seemed the councillors were ducking an opportunity to show leadership in at least seeking a review.

Cr Lew Findlay said although he could support a review looking at ways to make it possible to pay the living wage, he would not contemplate redundancies.

"There is no way I could encourage someone to accept a pay increase if their workmate was to lose their job."

Mr Clifford said after the meeting that he had sympathy with the living wage concept, but believed targeting employers one by one was not the way to achieve it.

He had a "heart-felt concern" that the jobs of up to 195 council staff could be at risk if their teams could not compete with contractors who were paying their staff less.

Councils were under increasing pressure to ensure they were providing services at the lowest possible price, which could see more work out-sourced if the council's wage regime was out of kilter with that of contractors.

PSA organiser John Shennan said the pair's deputation showed the living wage campaign had attracted a broad range of support - "not just unions and churches".

But he said he would distance himself from suggestions that the living wage be paid by taking money away from other workers.

Manawatu Standard