Brian Rudman 's Opinion

Brian Rudman is a NZ Herald feature writer and columnist.

Brian Rudman: Living wage the only decent option

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Mayor Brown whose pay has just gone up to $251,000 proposes a three-year phased increase for city staff

Image / Bromhead
Image / Bromhead

There's something rather heart-warming about the growing popularity of the "living wage" movement. Despite three decades of market economic indoctrination, New Zealanders' underlying sense of fairness and decency remains intact.

It doesn't take a Nobel Prize in economics to appreciate that sending off middle-aged mums on 12-hour night shifts to scrub toilets and vacuum offices for less than a living wage is not just unjust, it's also economically irrational. It forces taxpayers to top up the private contractors' wage bills with various forms of welfare subsidy.

Fuelling the support has been the ballooning salary packages the bosses and directors keep awarding themselves, while continuing to predict economic ruination if the lowly paid get a dollar or two more.

Yesterday, Auckland Mayor Len Brown followed through on a resolution passed at the September meeting of the previous council, by proposing to phase in a living wage of $18.40 for all staff over the next three years. He's also dangling the possibility that the cleaners and other low-paid workers who work for companies providing contract services to the council might also be included in the package.

It's only fair, he says, that "frontline staff" receive a reasonable wage so they can "enjoy a decent standard of living". But, always the politician, he makes one condition - "provided it doesn't impact on ratepayers".

He'll attempt that balancing act by making cuts elsewhere. With an annual budget of around $4.5 billion, finding an extra $3.75 million to get all council employees on a "living wage" shouldn't be too hard.

One solution he seems to have ruled out is the proposal by Professor Tim Hazledine of the Auckland University Business School in these pages recently: "I'd like to be able to vote for a political party that would commit to winding back top pay in the public sector to $400,000, with appropriate downward adjustments, of course, to everyone underneath the top level. This would save hundreds of millions of taxpayer dollars, which could easily fund paying cleaners and others the Living Wage, with a bit left over for school lunches or some other worthy cause."

During the election campaign, Mr Brown defended council chief executive Doug McKay's $782,887 salary - 21 times the living wage - as being necessary to "meet the market". It had already been revealed that 1500 council staff earned more than $100,000 and 113 more than $200,000.

Mayoral candidate John Minto's cost-neutral solution was to fund a base staff and contractor wage of $18.40, by pruning at the top. His cuts were more draconian than the professor's: the mayor's salary would be set at four times the living wage, down from $247,300 to $153,088, and the CEO's at five times, or down to $191,360.

On being re-elected, Mr Brown's salary automatically increased to $251,010, thanks to the independent Remuneration Authority. Mr McKay is leaving, and Mr Brown has talked vaguely of seeking "downward movement" in his successor's salary.

As of September, 1623 council staff - including Watercare and Auckland Transport - received less than the living wage. The average hourly rate of this group was $15.80. To bring them all up to $18.40 would cost $2.9 million. If another 683 staff, who supervised or had seniority over the bottom 1623, were to get a wage increase to maintain "a reasonable differential", that would add another $836,000 to the total.

No figures are available for the number of cleaners, building maintenance, farming, fishing and forestry workers working for council contractors. But the overall annual cost of these contract services last year totalled $236 million and involved 106 providers.

The Living Wage for New Zealand was set by the Family Centre Social Policy Unit at $18.40. This covered the basic needs and expenses of a two-adult, two-child family, with one adult working fulltime, the other half-time. A specific Auckland rate was calculated as $24.11 an hour, to accommodate the significantly higher costs of Auckland rental housing. However, campaigners, and Auckland Council, are sticking with the lower figure, for now anyway.

The Treasury complains the living wage is not sufficiently targeted to help those in true need, while business Cassandras predict impending greater unemployment and general financial ruin.

But it's hard to see how those working long hours on less than "a living wage" are not people in need. More in need, surely, than the critics on comfortable salaries 20 or more times greater.

- NZ Herald

Brian Rudman

Brian Rudman is a NZ Herald feature writer and columnist.

Brian Rudman's first news story was for Auckland University student paper Outspoke, exposing an SIS spy on campus during the heady days of the Vietnam War. It resulted in a Commission of Inquiry and an award for student journalist of the year. A stint editing the Labour Party's start-up Auckland newspaper NZ Statesman followed. Rudman decided journalism was the career for him, but the NZ Herald and Auckland Star thought otherwise when he came job-hunting. After a year on the "hippy trail" overland to London, he spent four years on Fleet St with various British provincial papers. He then joined the Auckland Star, winning the Dulux Journalist of the Year award for coverage of the 1976 Dawn Raids against Polynesian overstayers. He has also worked on the NZ Listener, Auckland Sun, and since 1996, for the NZ Herald as feature writer and columnist. He has a BA in History and Politics.

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