Why stop at $24?

February 15th, 2013 at 3:00 pm by David Farrar

Simon Collins reports:

A senior Auckland unionist says the proposed “” of $18.40 an hour is not enough in Auckland.

Service and Food Workers Union lead organiser Len Richards told a conference launching the living wage at AUT University yesterday that Aucklanders needed $24 an hour to pay higher rents and other costs.

Why stop there? How about $40 an hour? What nasty filthy Tory would argue against paying someone at McDonalds leess than $40 an hour?

However, Auckland’s $24.11 is not only 30 per cent higher than the proposed $18.40 national living wage, but is higher too than the national median wage of $20.86 an hour, so it would mean seeking higher wages for the lowest-paid Aucklanders than for more than half of all workers.

Details details.

It’s all so simple. All we need to do to close the wage gap with Australia is to have a minimum living wage of $40 an hour. This will cost the Government some more money, but then all we have to do is print more money to cover the wages.

Those two simple acts, will have closed the wage gap with Australia and eliminated the budget deficit. Our economy will be healthy – hoo rah, and NZ will be a paradise that people will flock to to be paid $40 an hour.

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42 Responses to “Why stop at $24?”

  1. Manolo (13,514 comments) says:

    The Left’s objective is to destroy the economy. These loonies would love to collapse, to wipe out as many private businesses as possible and take them over by a gigantic state.

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  2. hamnidaV2 (247 comments) says:

    A higher wage in Auckland is just common sense.

    Higher housing costs, travel, etc.

    Many UK-based businesses and organisations offer a higher wage in London for exactly these reasons.

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  3. queenstfarmer (750 comments) says:

    Good points. Also, when will the media call out Labour for it’s hypocrisy of claiming to support the “living wage”, yet at the same time saying it’s minimum wage will be less than $18.40. Their position is that you cannot possibly live on less than $18.40, yet we’re going to set the minimum wage below that.

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  4. bringbackdemocracy (412 comments) says:

    Why don’t we all just stop working, become beneficiaries, and pay ourselves $100.00 an hour.
    I’m sure Wussell could arrange the funds to finance it.

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  5. swan (659 comments) says:

    “Many UK-based businesses and organisations offer a higher wage in London for exactly these reasons.”

    No, they offer a higher wage in London, because workers can make more for them in London. They wouldnt offer higher wages for those who want to live in Antarctica, just because the cost of pizza delivery is astronomical there.

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  6. freedom101 (475 comments) says:

    Circa 2017 in NZ. First thing in the morning you pick up the phone – no dial tone. Electricity is out too. You go out to collect your morning paper but it isn’t there. Then, to your surprise see your neighbour, still in his dressing gown. He had normally gone to work by now. “What’s going on”. you ask. “Haven’t you heard”, he says. “The government has made us all millionaires and none of us have to work again”.

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  7. PaulL (5,961 comments) says:

    Ham: in general people do get paid more in Auckland than, say, Palmerston North. That doesn’t mean we need to change the minimum wage. There’s this thing called the market.

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  8. Tom Jackson (2,476 comments) says:

    This hysteria about the minimum wage is silly. Other countries have high minimum wages and generous welfare policies and their sky hasn’t fallen in. In the end it’s mostly a political issue rather than an economic one.

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  9. hamnidaV2 (247 comments) says:

    PaulL – Sorry, I forgot, the mythical ‘market’ will take care of everything. He/she’s obviously done a wonderful job with wages and housing.

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  10. leftyliberal (642 comments) says:

    “No, they offer a higher wage in London, because workers can make more for them in London.”

    You can’t ignore the supply side of the equation any more than you can ignore the demand side. If workers from London aren’t willing to work for the wage set in places other than London due to it not covering their costs, then you have to increase the offer.

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  11. Kea (11,878 comments) says:

    If people in Auckland do not like the cost of living then they should move. It is not up to the rest of NZ to pay for Aucklanders life style choices. They absorb billions to improve their roads and to sponsor rugby piss-ups and boat races etc.

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  12. SPC (5,472 comments) says:

    Minimum wage rates

    National
    1997 $4.20
    1998 $4.20
    1999 $4.20

    Labour
    2000 $4.55
    2001 $7.70
    2002 $8.00
    2003 $8.50
    2004 $9.00
    2005 $9.50
    2006 $10.25
    2007 $11.25
    2008 $12.00

    National
    2009 $12.50
    2010 $12.75
    2011 $13.00
    2012 $13.50.

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  13. Judith (8,211 comments) says:

    The best thing for Auckland would be to sort out who really needs to be there, and ship the rest somewhere else. In fact, they should have a passport system, if you don’t need to be there – no visa approval.

    If they don’t like it, offer them a seat on a cruise. Surely the boat loads of immigrants we are meant to be getting would appreciate a full return load.

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  14. Cunningham (827 comments) says:

    Judith you are right though, why so many people obsessed with Auckland? We (my wife and I) purposely chose to live outside Auckland after finishing my studies and I now own a $500,000 house freehold at 34 years because I live in a city which is much cheaper (I also saved some money while in the UK but most of it saved in NZ). We don’t earn an extravegant amount of money but knuckled down knowing that once we got ahead things will be much easier (in theory). Now I am planning to save up dosh for many years and if I have to move somewhere more expensive, then I have the money behind me to do so. Makes sense to me.

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  15. BeaB (2,067 comments) says:

    Why do none of these stories ever mention the effect of Working for Families especially when they are always about parents with kids.
    Perhaps we could dump WFF, drop taxes and hope employers use the money to increase wages.

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  16. SPC (5,472 comments) says:

    Bea B income tax rates have no impact on business profits. And no one received a pay increase when the government reduced company tax – companies just paid higher dividends.

    Dropping WFF just means families would live on lower incomes than they do now.

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  17. SPC (5,472 comments) says:

    As to the purpose of a living wage concept.

    It is first as a means to recognise that people cannot live on minimum wage levels while living in expensive urban areas – and thus seek an alternative living area wage for these workers.

    It is thus a way to encourage firms and local councils to pay their staff this living wage as good corporate citizens.

    It is second in so far as nationwide poilicy is concerned a contribution to political discussion about the link between miminum wage levels and support for families. Too low a minimum requires the government to top up the wage inordinately (at some taxpayer cost) or results in family deprivation.

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  18. slijmbal (1,223 comments) says:

    Interesting to see we are moving the discussion to be implicitly about the required wage

    As an employer I am happy to confirm we pay more in some urban centres (Including Auckland) as market forces mean we cannot employ people without doing so …..

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  19. SPC (5,472 comments) says:

    Some people seem confused about the issue – the people getting paid the higher wages in London and Auckland are the people getting paid more than the median.

    There are people paid the nationwide minimum wage in Auckland. The issue is whether the main extra cost, housing, is satisfactorily covered by the AS or not (those on the MW not usually owning or seeking to own housing).

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  20. Cunningham (827 comments) says:

    SPC, but we have WFF. So it seems the people advocating for this want the wage of 18.40 paid while still having WFF being paid as well? I mean if you say “Too low a minimum requires the government to top up the wage inordinately (at some taxpayer cost) or results in family deprivation” then are you saying we should just pay the liveable wage and no WFF? If so then WFF should be scrapped? The people who are running this are bloody clueless on any details (as the left tend to be on anything to do with money).

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  21. SPC (5,472 comments) says:

    slijmbal – do you think cleaners and rest home workers, fast food staff and supermarket staff in Auckland are paid more than elsewhere. Unemployment means all these jobs are oversubscribed with appliants in AK, even at MW.

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  22. Mobile Michael (428 comments) says:

    Having read about this living wage, and having spent some time below it in the past, I’ve concluded that I must have died of poverty and I am now in some sort of purgatory for my sins.

    Either that or I was able live on less than the living wage and this is just spin for more socialism in our lives.

    And isn’t Len Richards the guy who smacked a woman in the head with a megaphone outside a labour party conference years ago?

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  23. SPC (5,472 comments) says:

    Cunningham, yes I know we have WFF. The issue being raised is whether MW + WFF reaches the living wage or not. And the realtionship between the level of the MW and the amount of WFF support that is then required.

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  24. Cunningham (827 comments) says:

    SPC but it does though doesn’t it? From what I have read (I haven’t checked myself), if you take 2 ppl on the min wage with 2 children and add in WFF it comes to roughly that amount. So what are they trying to campaign for then??

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  25. leftyliberal (642 comments) says:

    BeaB/SPC/Cunningham etc. The computation of the living wage includes WFF and other things that parents with 2 kids would be eligible for in computing the hourly rate (i.e. they compute the costs, then work back from that to determine hourly rate based on what taxes they’d pay and what credits/supplements etc. they’d be eligible for. Read for yourselves:

    http://www.livingwagenz.org.nz/files/embargo%20file/Living%20Wage%20Investigation%20Report.pdf

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  26. SPC (5,472 comments) says:

    Cunningham, two things as far as I can tell – pressure to keep increasing the WFF tax credits and or the MW with rising costs and to promote a higher MW and or AS (higher housing costs) in areas like Auckland.

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  27. Cunningham (827 comments) says:

    Do they want businesses to pay the WFF equivalent so that WFF can be shitcanned? That will just make more people unemployed as you cannot expect a company to raise wages that high and then be confident to hire more people. Maybe they want to reduce business tax so companies have the money to do so (I am sure they don’t want this though as business is evil in their eyes)? You see what I mean, they seem extremely vague on what they actually want.

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  28. SPC (5,472 comments) says:

    Cunningham, not really they say the best way to meet the living wage required for Auckland is to increase the AS as the main higher cost there is housng.

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  29. Evadne (85 comments) says:

    Right, so let me understand this. The ‘living wage’ is devised by calculating the cost of living: i.e food, accommodation, transport, services, clothing and other goods required by an individual or family to attain a reasonable standard of living.

    So that we might all live at this appropriate standard, lets increase the minimum wage by $5 (37%) – and adjust any wages above that appropriately (because someone on $15 or $18 also needs a payrise, and someone on $20 wants their experience or seniority recognised). This applies across the board, but lets just consider those in the food industry.

    Who gets this payrise? The supermarket checkout operator; the deli counter staff; the shelf stacker; the trolley collector; the supermarket cleaner; the produce staff; the bakery assistant; the stock handler; the delivery truck driver; the warehouse dispatch workers; the food handlers; the packers; the production line workers; the factory cleaners; the canners; the produce pickers; the farm workers; the guy making the food labels; the people who make the packaging; the people pumping the fuel into the trucks which carry the food; the data entry clerks processing the food orders; the people cleaning that office… and so on and so forth. All getting a 10, 20 30 % payrise.. which means a huge increase to the wages bill of every single business or industry involved in food production.

    Where does this money come from? Making as many cuts as possible, and raising the product/service cost all the way down the line…until it reaches the person standing at the till at the supermarket, who was only paid $18.50 an hour. Their “living wage’ no longer buys them the standard of living they were promised, because the cost of everything has suddenly gone up. And that’s just food…

    It would cycle up forever, because the cost of everything is determined by the contributions of everyone else. If you earn as much as the next man, you can’t afford his services twenty times over.

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  30. Cunningham (827 comments) says:

    Evadne that is a good point and I don’t think that this has been at all thought through. Maybe they want:

    - WFF canned
    - That money saved from WFF to go into business tax cuts.
    - A rise in min wage to $18.40.

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  31. Inky_the_Red (741 comments) says:

    Clearly many people in NZ are working hard yet do not earn enough to support their families.

    Some people attack other suggestions on how to improve the situation. It would help the conversation if they had alternative ideas on how to fix the problem.

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  32. Cunningham (827 comments) says:

    Inky_The_Red the problem is that there is no give from the left. They seem to want these sorts of things but usually offer no alternative on funding or the impact on the taxpayer/businesses concerned. For example they seem to oppose all spending cuts National have made yet they want to fund all these policies they dream up. They would not have cut the public sector at all during this recession if they were in government and we would be well and truly fucked. Do they think we are stupid? You cannot just continually ask the taxpayer (or businesses) to spend, spend, spend while not making any concessions on how it can be paid for. AND PRINTING MONEY IS NOT THE WAY TO FUND IT! I would have alot more respect for the left if they at least tried to be responsible in how to pay for things but they don’t.

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  33. Rightandleft (650 comments) says:

    NZ’s minimum wage is already among the most generous in the world. It is already 59% of the median wage, second only to France on 60%. I thought the $18.40 wage ask was ridiculous, but $24 for Auckland is really nuts. When I was living on the minimum wage I was living on Auckland North Shore in one of the city’s most expensive areas and commuting daily over the Harbour Bridge in traffic. Yet I still lived comfortably on the minimum. The people making these suggestions seem to have the same grasp of economics as the people who pumped out Greenpeace’s recent economic future of NZ without fossil fuels rubbish.

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  34. wiseowl (797 comments) says:

    There should be no minimum wage.
    It creates major distortions in the economy now and this dreamland idea of lifting it to any figure you can think of is absolute nonsense.
    God help us if any of these dreamers get into power.

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  35. Small Forest (2 comments) says:

    To point out the obvious, surely a job with the current minimum wage is better than no job at all.

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  36. alloytoo (445 comments) says:

    @Evadne wrote:

    “Right, so let me understand this. The ‘living wage’ is devised by calculating the cost of living: i.e food, accommodation, transport, services, clothing and other goods required by an individual or family to attain a reasonable standard of living.”

    Like that other left hobby horse, the so called child poverty level, the definition fails to provide an empirical measure or even methodology.

    Given the variance in many factors nationwide, and given that some people are more ‘reasonable’ than others, it seems to me the living wage has been set at a level determined by a focus group so as to feel good to the lame and lazy and “not to bad” to the rest of us.

    The emperor, as the old tale tell, has no clothes, at least not any that fit a budget.

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  37. Evadne (85 comments) says:

    Alloytoo: I quite agree that the ‘reasonable’ standard is arbitrary – and irrational, as it is economically impossible.

    It seems the left want everyone to be able to buy the goods and services provided by 20 people, at the cost of 10, with everyone earning twice as much.

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  38. leftyliberal (642 comments) says:

    @alloytoo/Evadne: Read the report. It clearly states the methodology used, and describes in some detail where they came up with their numbers. I’m sure the authors would welcome an informed critique of their work. After all, if it turns out that the $18 figure is unnecessarily generous, their goal will be easier to achieve, right?

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  39. Evadne (85 comments) says:

    LL: I can see how they arrived at numbers: what I don’t understand is how they can expect those to remain constant – since the cost of everything would be affected by any rise in wages. i.e if you raise wages, then the cost of most goods and services will go up, so the “living wage” no longer be enough to purchase those goods and services.

    (What a ‘reasonable’ standard of living is, is quite another debate. We would all like to be more comfortable. Is it reasonable to expect it?)

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  40. SPC (5,472 comments) says:

    The problem of a rise in cost of living undermining an improved (living wage) income is more theoretical than real.

    1. anyone who has costed contracts would realise that the cost increase arising from an increase in wage costs is much less than the increase in wage income – as wages are only one cost of many in the provision of goods and services (and the wages of lower paid staff is only part of the wage bill).

    2. and the living wage campaign is not advocating that the living wage be realised by wage increase alone – it advocates for example that the best way to realise a higher living wage for Auckland because of its higher rent costs would be a higher AS in that area.

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  41. Scott1 (478 comments) says:

    Some people just need more money to have a “living wage” than others.

    Sometimes this is because some people are OK with sleeping in a closet and sharing internet and toilets and so forth (I did that and, it really cut back the costs and was no significant issue to me). Others have lots of fixed costs like transport to work and morgage on a house they are paying off and can’t sell, and maybe family members who don’t have a respect for money and other hard to control costs like sick or poorly behaved children and heavy social pressures for spending money like church donations.

    Some people are just poor on any income. Both in terms of them spending every dollar they have and in terms of not spending it on ensuring the basics (even some of the almost free basics, like keeping ones house clean).

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  42. joana (1,983 comments) says:

    MM
    yes it is the same Len..Anyone else know him? I do..He is quite a nice guy but he has been in commie parties since his Uni days…It is impossible to have a normal conversation with him..He is very intense..He talks at you constantly , much of it his conversation is in marxist slogans. If you do manage to get a word in re some everyday topic, he brings your comment back to some sloganesque kind of theory..It is tedious and rather scary. He has been brainwashed for years and in turn constantly tries to brain wash others. Jill Ovens is his sidekick or was awhile ago.

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