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Key Living Wage: “A matter for them”

Written By: - Date published: 5:49 pm, February 11th, 2013 - 26 comments
Categories: john key, wages - Tags:

John Key, as expected, failed to take any sort of lead – or even fast following – on the Living Wage campaign.

It’s “a matter for them” – businesses and workers – not something for a mere Prime Minister to be interested in.

He thinks it’s nice if businesses pay more as they can afford it, but obviously doesn’t see higher wages as a priority.

To my friends on the Right – “but they shouldn’t pay it if they can’t afford it” – I say: it’s a matter of priorities, and as Living Wage advocates proselytise, it often works out cost neutral.

Is the top management’s pay a priority?  It evidently is as we’ve seen the top tier of earners keep on getting healthy pay rises.

It often works out cost neutral because of reduced turnover and increased productivity driven by the higher morale of valued workers.  Workers who aren’t working a second job to pay the power bill and can be more devoted to you as well as their family.

But no, to John Key, it’s only about if there are any crumbs left over for workers after the cake has been divided.

Overseas local and central governments have taken the lead on the Living Wage.  With the sense of Social Responsibility such organisations are meant to be infused with, they don’t want to send their workers home at the end of the day without enough to eat properly.  So they make sure they pay the Living Wage, and any company they procure to do work must pay the Living Wage.

I’m talking Parliament’s cleaners here – and Bill English’s.

Unfortunately it’s clear from his attitude that the example Key will be leading with won’t be a good one.

26 comments on “Key Living Wage: “A matter for them” ”

  1. vto 1

    .
    Key paints his own picture of himself.

    hollow

    shallow

    empty

    • Tiresias 1.1

      He’s just being true to right-wing philosophy. Those who can, will, and the Devil take the hindmost.

      He’s only doing what 47.31% of New Zealand voters plus the Maori Party enabled him to do.

  2. indiana 2

    Ben, do you agree that a living wage is very dependent on an individuals circumstances?

    • vto 2.1

      indiana, do you agree that top management wages are very dependent on an individuals circumstances?

    • Te Reo Putake 2.2

      “Ben, do you agree that a living wage is very dependent on an individuals circumstances?”

      No. The basics are pretty much the same for all of us. We all pay international market rates for food, even though its produced here. Our housing is overpriced wherever we live. We all pay rates and taxes at similar levels (except the deserving rich, of course). Petrol, electricity, comms; all the same wherever in NZ you are to within a decimal point or two.

      • bad12 2.2.1

        Pay taxes at similar levels, planet te reo must be interesting, based upon actual income the poorer you are the more you pay in tax,

        Beneficiaries pay at least 30% of their income as tax, depending upon what they buy with their meager dollop of money this could be as much as 40% in taxation,

        Beneficiary dependent children wish to thank Labour for including them in the working for families tax credit scheme,(aw that’s right Labour ignored the poorest kids in NZ in favor of upper middle class kids so no thanks have been earned by Labour on that score either)…

    • Ben Clark 2.3

      Not very dependent, slightly (as TRP says). Except for children – they massively change costs. Which provides a good reason for something like Working for Families to even that out for those going through that expensive part of the life-cycle.

      But I guess that is part of the movement of the Living Wage being a non-compulsory wage. It is a moral wage that will be enough for people to have children, a modest place to live, and no worries about paying for power or food week to week. The Minimum Wage is a backstop to prevent employers really taking the mickey.

  3. AsleepWhileWalking 3

    For anyone else who couldn’t follow that link http://www.radionz.co.nz/national/programmes/ninetonoon/20130211

  4. tsmithfield 4

    If you are on a low wage with a couple of kids, the effect of WFF is that you probably are already earning a living wage.

    • felixviper 4.1

      You catch on quick.

      Now tell me again why it’s the state’s (i.e. yours and mine) responsibility to pay wages on behalf of the private sector?

      • tsmithfield 4.1.1

        So, is your position that the “living wage” should replace WFF?

        • felixviper 4.1.1.1

          My position is that the lowest wages should be enough to live a decent simple life on.

          And that if that were the case, WfF would never have been needed.

          And further to that, the presence of WfF has allowed those low wage levels to stagnate with employers recognising it as a subsidy to continue paying low wages.

          • The Chairman 4.1.1.1.1

            Indeed.

          • indiana 4.1.1.1.2

            “the presence of WfF has allowed those low wage levels to stagnate”

            Is that an unintended consequence of Labour policy making?

            • Draco T Bastard 4.1.1.1.2.1

              I don’t believe so. Labour knew that wages were no longer covering the costs of living and so put in place subsidies for private business so that wages could be kept low.

            • felixviper 4.1.1.1.2.2

              “Is that an unintended consequence of Labour policy making?”

              Ultimately, yes.

              However while Labour were in office they continued to increase the min wage anyway, whereas National hasn’t really.

              • indiana

                Why should they have? If WFF helped stagnate employer driven wage increases then sadly that unintended consequence of the policy also stagnates state welfare increases and minimum wage increases by any future government.

                But at least Labour can look like they care.

                • RedLogix

                  Once upon a time employers routinely paid married men more than single men. This was because in the context of the time married men most likely had higher costs than single men. We also had a Universal Child Benefit that was actually of real value to families. These were blunt but appropriate tools for the time.

                  The idea that families are expensive to raise AND that society owed some obligation to assist in that process is not a new one. In fact it’s been around for a very long time in one form or another…. long before capitalism.

                  The advent of workplace equality has necessitated a change in the form this assistance has taken. Whether WFF was the best response is still an open topic for debate. Personally I’ve long advocated that a Universal Basic Income would be a better approach.

                  But arguing over whether this family assistance should be paid directly by employers or indirectly via the tax system is a pretty sterile debate.

  5. Brian 5

    Is it me or is it just strange to find the words Key and Leadership in the same sentence?

  6. RedLogix 6

    Overseas local and central governments have taken the lead on the Living Wage. With the sense of Social Responsibility such organisations are meant to be infused with, they don’t want to send their workers home at the end of the day without enough to eat properly.

    But of course the Local Government Reform Bill 2012 has tidily removed this option from New Zealand Local Authorities:

    1. Refocus the purpose of local government
    The broad purpose of the Local Government Act 2002 covering social, economic, cultural, environment well-being is unrealistic. It creates false expectations about what councils can achieve and confusion over the proper roles with respect to central government and private sector.

    The problem is illustrated by councils setting targets for NCEA pass rates, greenhouse gas emission reductions and reduced child abuse in their communities. These are very real and important issues but are not the responsibility of councils.

    New Zealanders would be better served by government providing a clearer purpose statement on the role of councils. We need to be cautious of the narrow prescriptive approach of the 1974 Act that had councils needing special parliamentary authority to be allowed to provide an illuminated town clock. A balance is needed that provides greater clarity of councils’ role but which recognises the diverse needs of local communities throughout New Zealand.

    This Government supports the retention of local government’s purpose to enable democratic local decision making and the accountability of councils to their local communities. The provisions to be changed throughout the Act are references to the broad role around social, economic, cultural and environmental well-being. This will be replaced by councils’ role being defined as the provision of ‘good quality local infrastructure, public services and regulatory functions at the least possible cost to households and business’.

    The important words in the new purpose statement are ‘local’ to differentiate from services better provided by central government and ‘public’ to clarify that councils should not try to replace services provided by the private sector. The proviso requiring least cost is to emphasize the need for efficiency. The definitions will make it plain that ‘least possible cost’ means costs now and into the future, to ensure decision makers do not take a narrow, short term view of cost effectiveness.

    1. The Local Government Act 2002 will be amended to replace references to the ‘social, economic, environmental and cultural well-being of communities’ (the four well beings) with a new purpose for councils of ‘providing good quality local infrastructure, public services and regulatory functions at the least possible cost to households and business.’

    http://www.dia.govt.nz/Policy-Advice-Areas—Local-Government-Policy—Better-Local-Government-brochure

    Given of course that virtually everything Local Govt does could be done by the private sector this Bill has become a charter for the complete dismantling of Local Govt in this country. Not next week … but within the next decade.

    • Draco T Bastard 6.1

      Unless we get a reasonable government in place that repeals it. If we don’t then the sell off of NZ to the highest bidders and the conversion of most NZers into serfs will continue.

  7. swan 7

    Some great posts on tvhe and offsetting behaviour on this. I think we should be very carefull about the (un)intended consequences of this policy.

    http://www.tvhe.co.nz/2013/02/12/a-19hr-living-wage-wtf/

    http://offsettingbehaviour.blogspot.co.nz/2013/02/living-wages-and-raising-rivals-costs.html

    • RedLogix 7.1

      Here is a question for you swan.

      If your job is protected by the national economy, ie you are a professional or similar whose ‘market rates’ are not especially subject to international competition then you are doing quite alright thank you. I’d estimate this class of people might be the top 20% of earners at most.

      But most other people in New Zealand have jobs that could be done by somebody else in the world for much less. That’s the other 80%. If we were to take your position and argue that if a job could be done by someone else for less, then it should be done for less, then obviously this 80% of New Zealanders will see their incomes stagnate or fall even further.

      While at the same time the top 20% or so will continue to accumulate more wealth and privilege to themselves, increasing even further the gross levels of inequality in this country.

      My question then is, would you argue that wage competition should apply only to the lowest and least empowered in the market … or should it apply to everyone?

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