Living wage gets a pay rise

If your boss offers the living wage, you're about to get a pay rise.

Advocates for the living wage have put the figure for 2017 at $20.20 an hour. The voluntary rate, which Living Wage Aotearoa New Zealand says comes into effect on July 1, is an increase of 40c on 2016's rate.

Auckland Mayor Phil Goff is hoping to get the votes to establish the living wage for Auckland Council.

"First it's about fairness. This is an expensive city to live in," he told The AM Show.

"We've got low income families - 20 percent of our lowest income families pay more than half of their total household income just in rent. So we want people to work for us, do a decent week's work, we've got to give them a wage they can live on.

"We'll do it in this budget, in three instalments. The first tranche will be this year and that'll be aimed at the lowest-paid council staff.

"When I say we'll do it, we'll have to get a council majority to do that. I'm hopeful that I'll get that majority," he says.

Mr Goff says 2200 council staff will benefit from the living wage rise in the next three years, and by the third year the cost will be $7 million annually.

"At the moment for our lowest paid people we've got a turnover rate of 25 percent. That's one in four each year leaves because they can't afford to live on the wage we're paying them."

He estimates council could save about $750,000 annually on reducing staff turnover.

"We've got an obligation to be fair to our workers. When you're fair to your workers, you get less absenteeism, less turnover, higher productivity, you attract better people into the council team."

One company already offering the wage is Auckland software company Wherescape.

"It's a way of giving back to the community," founder Michael Woodhead says." We're showing that we're that sort of organisation that thinks it's important that people don't have to live in cars."

The living wage is about an extra $5 an hour compared to the official minimum wage of $15.25 set by the Government.

It is defined as income necessary to provide workers and their families with the basic necessities of life.

E Tu union national director of campaigning Annie Newman told The AM Show the living wage is increasingly seen as the acceptable standard.

She says there has been a lift of one third in the number of businesses becoming accredited as living wage employers.

"Sixty-four employers now ensure all workers, including their contracted staff, are paid enough money to live with dignity," she says.

"It shows you can thrive as a business and pay your workers a decent wage in New Zealand."

But Business New Zealand chief executive Kirk Hope says introducing the living wage means prices go up for small businesses which could also cost jobs.

"If you're increasing wages without productivity you're just driving price of products and services up, so you're not helping anyone out. So you pay more but the costs of products and services increases anyway because there's no productivity gain," he says.

Mr Hope says Government entities adopting the living wage sets a worrying trend for the private sector to follow suit, which might not be able to afford it.

Auckland Ratepayers' Alliance spokesperson Jo Holmes says there's evidence of the policy backfiring and leading to a reduction in low-skilled workers at Wellington City Council.

"Contrary to intentions, living wage policies actually hurt the very people they seek to help," she says.

"In Wellington seventeen parking wardens were not rehired when their contracts were brought back in-house - as a result of the wardens being under the skill-level of the living wage."

Newshub. / NZN