Living wage is not practical

Pushing for a living wage as opposed to a minimum wage has been tagged impractical in the current economic climate by a Wanganui budget adviser.

Sandy Fage, co-ordinator of the Wanganui Budget Advisory Service, said boosting the wage from the present $12 an hour to $18.40 would create a price spiral that would mean any wage increases would be nullified.

A coalition of union and community groups has proposed a "living wage" of $18.40 was needed. That figure is based on the cost of Otago University's "basic" food diet for a couple with two children ($226 a week), the national lower-quartile rent for a three-bedroom house of $275 a week, and other costs totalling $537 a week based on the average spending by families earning below the median household income for couples with two children.

Minister of Labour Simon Bridges said the idea was subjective and simplistic and would not be a Government priority. But he said the minimum wage would continue to increase.

The Government is expected to decide whether or not it moves to a $13.50-an-hour minimum wage - it is currently $13 - soon with the new rate applying from April 1.

But Ms Fage said it should not ignore the fact that the minimum wage for most people was inadequate.

"Even those doing part-time work and getting a benefit are really struggling," she said.

"Then you look at the numbers of businesses that have closed or collapsed in recent weeks, and you get an idea of the slump the economy is in."

She said historically any impact of a global recession tended to be felt in NZ as a trickle-down effect: "It may not be a sudden impact, but the reality is we're being affected a lot more than is being publicised."

Ms Fage said both employees and employers were struggling and no common ground could be found at the moment.

"There's no easy fix such as simply increasing benefits. We're in a depression and a lot of people are feeling it."

She said her advisers were dealing with people who were not misspending their incomes, but with no overtime being worked, and facing increasing costs in power, food and fuel, they could not make ends meet.

"It breaks your heart dealing with them," she said.

Ms Fage said her service was aware Winz was not giving out food grants at the rate it used to because of apparent budget restraints, and the city's food bank was having to restrict the number of food parcels it was distributing.

She said obviously someone on a $12 minimum wage would "welcome" an increase to $18.40, "but that move would have a huge impact on everyone, including those receiving an increase to their minimum wage".

"We need to see more jobs. That's the bottom line."