Last week the Living Wage Movement Aotearoa New Zealand announced a new rate of $26 an hour, up $2.35 on last year’s rate.
The 370 accredited employers will have until September 1 to implement the changes, which will see employees receiving at least $3.30 more than the minimum wage.
The calculation, which attempts to address in-work poverty, is reviewed every five years by the NZ Family Social Policy Centre Research Unit. The calculation is linked to movement in New Zealand’s average hourly wages, and recent increases in the cost of living and inflation.
Paying staff a living wage differs from being living wage accredited, which ensures all workers and contractors are paid a living wage and no changes are made to employment conditions or working hours. The process includes monitoring and reporting, and employees must also be provided with access to a union.
As a case example, Simpson Grierson had pledged it paid its employees at least a living wage, including its contractors last year. In November 2021 the firm gave written instructions to its outsourced cleaning contractor in Wellington to ensure the firm paid living wages from January 1, 2022.
“We have now double-checked with our Wellington cleaning company and it appears they haven’t implemented our instructions,” the firm said in September.
“We are very disappointed about this oversight, and we have given them immediate instructions to correct the mistake and back pay the difference to anyone affected.”
Dealing with contracting companies provides companies with a dilemma. They might be in favour of becoming Living Wage Accredited, but the move means all contracting companies have to be on board too. But, in the case of Simpson Grierson, it set a precedent and showed that through sheer force, it was possible.
Interestingly, none of the eight universities in Aotearoa are living wage accredited. Note, the Massey University Students’ Association, Victoria University Students’ Association, and the Open Polytechnic are living wage accredited.
According to Living Wage Movement Aotearoa New Zealand chair Reverend Stephen King: “Universities are important to our movement as we call them ‘anchor institutions.’ They receive large amounts of public money and have significant buying power to influence the community in which they reside. These institutions must do their part to ensure that the workers they employ are helped through the cost-of-living crisis”.
Looking to the motherland, Oxford, Cambridge, and London schools such as King’s College have all committed to being living wage employers.
In the context of Te Herenga Waka - Victoria University of Wellington, chief operating officer Mark Loveard told participants of a Living Wage forum in May 2021 the university had made a commitment to pay the living wage.
“We are phasing it in over four years and we’re halfway there,” he said.
“The University isn’t an institution, it is the people. It’s the students, the academic staff, the professional staff. We are the community that is the university.”
Director of People and Capability Mark Daldorf said the university contracts out its cleaning service so it does not pay the cleaners directly.
“The supplier is obliged to pay the minimum wage and any negotiated increases to the cleaners, but in addition the university has contractually committed to contributing towards an annual top-up contribution to cleaners’ wages in order to progress cleaning staff towards a level of wage closer to living wage rates.”
Living Wage Aotearoa New Zealand organiser Finn Cordwell estimated while the university top-up increases made a difference, it meant cleaners would be earning a little more than $24.00. The reason was the subsidy only applied to hours worked and not additional legislative requirements such as annual leave.
He said raising wages of the university’s lowest-paid workers could set a precedent for the rest of Wellington and other New Zealand universities. This would be in line with other public employers who were leading the living wage charge, such as the Wellington City Council, Porirua City Council, and Hutt City Council.
“Te Herenga Waka is a large public employer with significant buying power over workers, and paying a living wage to all its low-paid staff could help create positive change in the community.”
Jo Fisher said with the living wage hourly rate set to increase from 1 September 2023 by 9.9 per cent on the 2022/23 rate, the university acknowledged the significant growth of the living wage as a result.
“Our intention is to continue moving towards the living wage, provided the university’s financial situation enables this.”
With universities increasingly under the microscope following a sweep of union strikes last year, let’s hope universities - and in particular Victoria University of Wellington - rise to the living wage challenge before September 1. For now, COO Mark Loveard’s 2021 promise falls depressingly short.