Ex-Cabinet minister puts money where mouth is as movement to boost employees' hourly rate gains traction

Unions and community groups have begun to put their money where their mouths are in the campaign for a living wage - literally, in the case of former Cabinet minister Laila Harre, who now co-owns an upmarket Auckland restaurant.

Eleven employers, including six union groups, have been accredited as the country's first living wage employers, paying all their employees and contractors at least $18.40 an hour - a rate that was adjusted for inflation yesterday to $18.80.

Ms Harre's restaurant, O'Sarracino in Mt Eden Rd, hosted the announcement of the accreditation system yesterday but still pays two employees below $18.40. Another director of the business, Maurizio Piglia, said those two would be paid the new $18.80 rate by June or July "if the business environment supports us".

Kitchenhand Josilei Swistalski De Oliveira, a 27-year-old Brazilian who is here on a working holiday, said her wage of $15.50 an hour was not enough to live on in Auckland.


She and her boyfriend, who earns the legal minimum of $13.75 an hour in a hotel, share a three-bedroom city flat with four other people, paying $730 a week rent between six of them.

"Fruit and vegetables are very expensive in New Zealand. I can't eat very nice food because I always think about how to save money," she said.

Ms Harre, a former Alliance MP and unionist who recently resigned as the Greens' policy director, said she and her partner, Dr Barry Gribben, made support for the living wage a condition when they bought into the business in December.

Four of the six staff earn over $18.80 an hour, with only Ms De Oliveira and a bartender below it.

"We just need to increase volume [customers]," Ms Harre said.

The 11 employers accredited so far include only one profit-making business, a tiny Titirangi photo printing firm called Opticmix run by partners Kevin Church and Diana Yukich, with one employee who had been below $18.40 before the living wage campaign started last year.

"If a business can't afford to pay the living wage, really it is questionable how valid the business is to run," Mr Church said.

Dunedin's North East Valley Normal School, which was also accredited, said last year it was tightening up in other areas to lift the wages of about six workers who had been below $18.40.


Researcher the Rev Charles Waldegrave said a 2.2 per cent rise in the living wage from $18.40 to $18.80 was needed to keep pace with a 2.1 per cent rise in average wages and increasing costs.

He found that total living costs for the average national lower-quartile family of two adults and two children rose by 1.1 per cent in the year to last June, from $1038 a week to $1049.11, but gross wages would need to rise by 4 per cent, from $18.40 to $19.14 an hour, to offset a clawback of family tax credits as wages rise.

Labour Minister Simon Bridges said the figure seemed to be "much more what they feel rather than what good evidence suggests is right".

He said raising the legal minimum wage to the original figure of $18.40 would cost employers $2.3 billion a year and wipe out 24,000 jobs. The Government would announce a new minimum wage "soon".