A few years ago, it was rare to hear anyone condemning excessive CEO salaries.

If Westpac wanted to pay its CEO more than a hundred times what it paid its average worker, who were we to disapprove? It was supply and demand. The market decreed it, and the market is never wrong.

The justification that issued forth from CEOs and their apologists echoed that self-serving L'Oreal slogan of the 1970s: "Because I'm worth it." As if that was all there was to it.

Thus, McDonald's in the US could blithely pay its CEO nearly US$9 million while simultaneously lobbying against minimum wage increases for its workers.


R.H. Tawney in his 1920 classic The Acquisitive Society described the enormous remunerations commanded by some heads of industry as "hundred-family salaries".

He noted that in societies where wealth was measured by cattle, big chiefs were described as "hundred-cow men". Similarly, one could describe a highly paid CEO as "a hundred-family man, since he receives the income of a hundred families".

Such salaries were "ungentlemanly", he wrote.

Tawney agreed that special talent "is worth any price" - but that was beside the point.

"When really important issues are at stake everyone realises that no decent man can stand out for his price.

"A general does not haggle with his government for the precise pecuniary equivalent of his contribution to victory. A sentry who gives the alarm to a sleeping battalion does not spend the next day collecting the capital value of the lives he has saved ..."

Everyone agrees we're a low-wage economy but the impact of that on families has been lost behind a haze of judgment and indifference.

Until last week, employers getting away with paying their workers the bare minimum could be forgiven their ignorance. No longer.


The $18.40 living wage identified by the Family Research Social Policy Unit in a report commissioned by the Living Wage Aotearoa campaign shows that despite the rhetoric of National and Labour, work doesn't pay for around 740,000 Kiwis.

That helps to explain why 40 per cent of children living in poverty are in households where at least one adult is working. And why crippling debt is endemic in low-waged communities.

And it makes clear that families subsisting on the minimum wage are fighting a losing battle, as researcher Charles Waldegrave says, "to not only provide the basic necessities, but to have a decent, but modest family and community life".

It's not much to ask, to be able to "participate in society and have enough to pay your rent and food and power".

As Helen Kelly says, "The deal is if you go to work and work hard, you should have a decent standard of living at the end of the week."

The living wage campaigners here are relying on the moral force of their argument, rather than legislation, to move employers.

For companies like Tonzu, an organic food company based in Auckland, the moral and business case is straightforward.

Co-owner Jesse Chalmers told TV One's Breakfast last week that Tonzu already had a target of two-thirds of the average wage. By the company paying the living wage, "staff feel more invested in their work, they're proud, we obviously have a lower turnover".

Though the higher wage bill might be unaffordable for some, "there are plenty of companies that can afford to lift their wages just a little more so that people can live a little more comfortably".

In the UK, a similar campaign has persuaded private and public sector employers to pay the living wage to around 450,000 workers.

The UK campaign was launched by an alliance of faith groups, union branches, schools and community organisations. It has cross party support.

Last year, the Department of Work and Pensions became the first Whitehall department to commit to paying the living wage to some 500 cleaners and catering staff (John Key and Parliamentary Service, please take note). London's Conservative mayor Boris Johnson, has become a passionate advocate.

One study shows the Government could save almost £1 billion($1.83 billion) a year in increased tax and lower welfare spending just from firms in London paying the living wage.

Becoming an accredited living wage employer has become a badge of honour, distinguishing employers as socially responsible and ethical.

As one cleaning company put it, "Taking a moral stand on paying above the poverty level makes us feel good, and means we have lower staff turnover". And, fortunately, "all our clients agreed it was the right thing and most of them paid the extra costs". In one case, a university campus went one further than paying its cleaners the living wage - it brought them back in-house.

All of which makes the excuses of some of our employers and politicians look rather hollow.

UK academic Jane Wills has argued the living wage campaign has stumbled on a way to help the most vulnerable workers - the low-wage subcontracted workers who had effectively been divorced from the people who really employed them.

It had put pressure on the "real employers" to take responsibility for the wages and conditions of these workers.

Some employers just needed encouragement to do the right thing. Moral pressure can be a powerful force, especially when brought to bear by a broad-based alliance of community groups.