$1m for council to pay 'living wage'
The Christchurch City Council is under pressure to find extra money to ensure all its employees get paid at least $18.40 an hour but its finance chairman is warning it cannot afford it.
"We are going through a process of cutting costs, not adding to them," Cr Raf Manji said yesterday as councillors met to consider a report on the implications of introducing a Living Wage.
By law, workers must be paid a minimum of $13.75 an hour, but $18.40 is what the Living Wage movement believes a family of two adults and two children, where one adult works fulltime and the other works part-time, needs to meet basic living costs.
There are 937 city council employees who earn less than $18.40 an hour, but most of them are employed on a casual, seasonal or part-time basis.
A report prepared for the council's chief executive and employment matters committee, which met publicly for the first time yesterday, estimated the cost of increasing their hourly rate to $18.40 an hour at $1.1 million, excluding KiwiSaver, overtime and penal pay.
It also warned that introducing a Living Wage was likely to have a knock-on effect for other staff as the council would need to maintain relativities in remuneration.
That could add another $1 million to the council's wage bill.
The report suggested a rate increase of just less than 1 per cent could be required to raise the extra $2.1 million in operating expenditure that would be needed.
It recommended against the council adopting a Living Wage, but the committee rejected that advice.
Instead it is recommending the council do more work on the implications of introducing a Living Wage and different options for implementing it.
Manji warned a packed public gallery it was unlikely the council would be in a financial position to afford the extra costs associated with a Living Wage any time soon.
Advocating on behalf of the Living Wage movement, Jolyon White, from Anglican Life, acknowledged the council was in a difficult financial position but told councillors that it was in hard times that good decisions really mattered.
He challenged the completeness of the report presented to the committee, saying it failed to draw on the experience of hundreds of overseas cities which had instituted a Living Wage.
Their experience showed the cost of introducing the Living Wage was often far less than initially envisaged.
"It is a far too important thing, affecting far too many lives, to be made on incomplete information," White said as he urged the council to commission a full feasibility study rather than accept the report's recommendation.
Kate Day, also from Anglican Life, said experience in cities that had introduced a Living Wage showed it boosted morale and productivity.
"We are foolish if we think there are not ongoing costs of paying low wages in Christchurch," she said.
Phillipstown School principal Tony Simpson told councillors he saw the effects every day of people struggling to live on minimum wages and as a consequence the school had committed to introducing a Living Wage.
"I look with hope to the city council as a leader to join with us to make this happen," Simpson said.
BIG EMPLOYERS NOT IN
Neither of Christchurch's two other big employers - the Canterbury District Health Board and Canterbury University - plan to introduce a Living Wage.
The Wellington City Council introduced a Living Wage at the start of this year for 450 of its direct employees.
The Hamilton City Council had planned to introduce a Living Wage, but had second thoughts after concerns were raised about whether it would be meeting the requirements of the new Local Government Act.
The Auckland Council is awaiting a report from its chief executive on the costs and implications of introducing a Living Wage before making a decision.
State sector agencies have not formally adopted a Living Wage and Treasury has advised against it, claiming it is an ineffective way to help families with low incomes.