WCC living wage costs explode also

July 12th, 2013 at 11:00 am by David Farrar

Stuff reports:

The price tag for a “” for Wellington council workers is looking increasingly steep, with the prediction ratepayers could stump up an extra $1 million a year.

A report shows the estimated internal cost of adopting a living wage will be $900,000 a year.

The figure included $575,000 for 502 council staff, and $325,000 for 257 staff across council controlled organisations.

The news comes after Hamilton City Council last week dropped plans for a living wage for its staff, when it was faced with an estimated cost blowout of $643,000 over two years.

The cost of a living wage for all Auckland Council employees has been put at more than $17 million a year.

Last month, the Wellington City Council voted to back the principle of becoming a living wage capital and the council committed $250,000 to implementing the policy by January 1, 2014.

So Councillors are sending ratepayers a bill for $1 million a year, so they feel good.

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35 Responses to “WCC living wage costs explode also”

  1. Manolo (14,044 comments) says:

    Another reason to get rid of the crazy Luddite Wade-Brown. Ah, the useless Greenie.

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  2. thedavincimode (6,871 comments) says:

    … bulldozer …

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  3. dave_c_ (223 comments) says:

    Manolo – What ? To be replaced by another left leaning interfering busy body ?

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  4. wreck1080 (3,958 comments) says:

    It was hilarious listening to the Hamilton city councillor last month explaining how adopting the living wage would not lead to an increase in costs.

    Some of these people live in cuckoo land.

    I would support the lowering of the top end wages to filter down to the lower end jobs. After all, these people at the top always find reasons why they are worth more than everyone else. As evidenced by the gap between lowest/highest paid workers.

    And, it is not like they are doing anything innovative or creating particular wealth — it is hard to see if they are.

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  5. bhudson (4,740 comments) says:

    Such is the way of the Left – salving their consciences with your money.

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  6. Redbaiter (9,561 comments) says:

    Jesus these people are so fucking utterly and completely hopeless. “Living wage” is a totally Marxist concept and there is no way it should be being discussed by councils.

    The National party is bad enough at being drawn in to this kind of worthless crap without councils being sucked into it as well.

    Aren’t there any so called right wingers out there with a political clue at all???????

    FFS….

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  7. kowtow (8,755 comments) says:

    If the extremely well paid councillors and executives of these bodies believe so whole heartedly in living wage shit,then I suggest that,instead of making it an extra charge on rate payers (who haven’t voted on the subject) they re structure their pay scales to reduce the top salaries by the amount they want to increase the bottom ones.

    No didn’t think they’d put their own money where their chardonnay socialist mouths were.

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  8. Ross12 (1,454 comments) says:

    You beat me to it Kowtow. That is exactly what I think.
    Some of these councillors have forgotten the elections are only months away.

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  9. KiwiGreg (3,259 comments) says:

    ..and yet you support minimum wages, which is EXACTLY the same thing, just with a different number.

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  10. KiwiGreg (3,259 comments) says:

    @ ross12, 30% turnout elections with a small group of activists I dont think they’d be worried.

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  11. backster (2,184 comments) says:

    Does the $900,000 p.a. include relativity rackups for all other staff ? it appears not.

    This man should stand for Mayor “Hutt City councillor Max Shierlaw has lodged a complaint about the living wage with the Office of the Auditor-General.

    He said the policy contradicted the Local Government Act, which required local bodies to “meet the current and future needs of communities . . . in a way that is most cost effective for households and businesses”.

    Paying some staff more than the market rate was not “cost effective”, he said.”

    I also note from this mornings news that it is proposed that a Wellington Super City will have more Councillors than Auckland…Crazy and so is anybody that supports one.

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  12. davidp (3,587 comments) says:

    WCC have essentially outsourced their wages policy to the Anglican Church. Was this the result of a competitive tender process? I would like to have bid on the work. Can I complain to the Auditor General if the Anglicans got to decide WCC’s wages policy in a corrupt manner without a competitive process?

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  13. wiseowl (930 comments) says:

    All council staff throughout this country are overpaid.

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  14. Ashley Schaeffer (513 comments) says:

    Should be market rates and nothing else.

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  15. thedavincimode (6,871 comments) says:

    Aren’t there any so called right wingers out there with a political clue at all???????

    Only you Russell, to whom we look for leadership, wise counsel and good manners.

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  16. Ross12 (1,454 comments) says:

    KiwiGreg –I hope your 30% turns out to be wrong. I think Wellington has seen enough of the anti progress bridgade.

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  17. RRM (10,009 comments) says:

    So Councillors are sending ratepayers a bill for $1 million a year, so they feel good.

    There are two sides to every coin DPF, as I would imagine you know far better than I.

    When I worked for the NZ arm of a global building materials supplier, the factory manager said they paid all the factory floor guys something like about 20% above the going market rate, because it was worth it to avoid staff turnover…

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  18. PaulL (6,044 comments) says:

    Red, why on earth would you think local councils would be more right wing than the National party? Are you becoming a self-parody?

    My view is that we absolutely shouldn’t reduce the pay for those at the top. We do actually need competent people in the councils. What we do instead is tell them that the wages bill is static, and they can pay anyone what they want. If some people get a pay rise, some other people get the sack. They either have those people who are now paid more do more work, or less work in total gets done and we reduce council services. I’m fine with either, by rights the former would make more sense.

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  19. Matt (227 comments) says:

    The ironic thing is that a so called “living wage” is a mirage: as wages go up, so inevitably will the cost of living as a result.

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  20. leftyliberal (651 comments) says:

    “My view is that we absolutely shouldn’t reduce the pay for those at the top. We do actually need competent people in the councils.”

    Surely that would apply to more than just the top though, right? Or are we assuming that those currently less than whatever the magic number they’re considering are already competent at what they’re employed to do (and likewise, that competent people would not be found for the top jobs if their pay rates were lowered?)

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  21. greenjacket (482 comments) says:

    Seriously – NZ has 4 million people – in this modern age, why do we have local government at all?

    Local government was necessary in a time when people lived in small communities and transport and communication was by horse or foot, so decisions about roads/halls/libraries had to be done at the local level. But that age is long past. Because local government is no longer relevant, the public is not engaged with local government (look at the voting participation rates). And because there is no genuine public engagement, local government councils become easy prey to nutcases and loonies – look at Hamilton and the influence of anti-fluoride weirdos, or Wellington electing a nutty Green mayor (and Cecilia Wade-Brown is actually fairly sane compared to some of the other Wellington councillors who are quite deranged).

    All the functions of local government could be easily undertaken by central government, and without the duplication and ineptitude which characterises local government.

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  22. RRM (10,009 comments) says:

    “My view is that we absolutely shouldn’t reduce the pay for those at the top. We do actually need competent people in the councils.”

    You mean people like Tony Marryatt??

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  23. PaulL (6,044 comments) says:

    @leftyliberal: are you saying that “the workers” should be paid the same as “the bosses”? Haven’t heard that one for a while. Surely if “the workers” want to be paid the same as “the bosses” then the way to do that is to become one of the bosses? If they’re that good at their jobs they’ll presumably get there?

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  24. leftyliberal (651 comments) says:

    @PaulL: Not sure how you got that from what I wrote. Simply that if you’re keeping “the bosses” pay rates high in order to have competent bosses, surely you should use the same technique for “the workers”: Pay them at a rate that ensures you have competent workers. The jobs are different, so there’s no reason the two rates need be the same.

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  25. PaulL (6,044 comments) says:

    @greenjacket: disagree. All govt services should be provided at the lowest practical level of govt, giving people a direct say in what impacts them. It’s easy to say “everyone in NZ should xyz, and someone else should pay.” In theory at least, it’s much easier to say “my suburb needs a library and I’m personally prepared to pay for that.” Local needs are much more likely to be efficiently addressed when the people are close to the government. Part of our problem is that our councils are a bit too big to be truly local, and a bit too short on power and useful functions to be worth spending time voting for. I’d make them more powerful, not less, but in so doing I’d constrain what they are allowed to do so they don’t go crazy. I know, a funny mix.

    @RRM: no, I don’t mean like Marryatt. I think he’s overpaid, but then I’ve formed that impression purely based on the media, which almost certainly means it’s wrong. What I mean is that increasing the wages of those at the bottom doesn’t have to mean reducing the wages of those at the top, it’s not a zero sum game. There is an amount of money that is paid for a certain amount of work to be done. If we increase productivity, then two people can do the work that used to be done by three, and we can increase their pay.

    Better still, we don’t necessarily increase pay in direct proportion – two people only use two people worth of equipment, HR time, payroll time, cars, office space etc. So, consider if 3 people were doing the job @ $40K each ($120K total), plus $30K ($90K total) of on-cost per head, that’s a total of $210K to get the work done.

    If we do that work with 2 people, the overheads will be $30K per head, so $60K total. If we take a bit of saving for the organisation itself (call that $10K saving, so $200K total being paid), and pay $60K overheads, we can afford to pay $140K total in pay, or $70K per head. So these folks are doing 50% more work and getting paid 75% more money. Arguably we could refine the model to assume a bit more capital investment to help enable that productivity.

    This is the underlying problem with the left (and, to be fair, many of those on the “right” in NZ who have become indoctrinated with some left wing views, particularly the adversarial view of labour/mgmt relations) the simple inability to understand that pay follows productivity, and to focus on how we increase productivity. Unfortunately productivity follows capital often, and in NZ we seem to make a sport out of driving capital away, whether it be foreign capital, capital from “rich pricks”, capital from evil business owners, or capital from those worried about regulatory risk.

    I reckon that in councils, there probably isn’t that much capital investment needed to get higher productivity, I reckon a decent slice of productivity inhibition comes from stupid rules and paper shuffling, so it’s probably often simply a case of removing the stupid rules and empowering the workers to do their job well.

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  26. orewa1 (410 comments) says:

    For my part I’d rather pay a bit more for rates and coffees, offset by a tax reduction due to reduced numbers claiming benefits.

    While I agree Councils should not be setting a lead, successive governments are to blame for the minimum wage falling so low relative to the remuneration of people higher up the chain.

    Business lobby groups constantly carp on at the unaffordability of anything higher, so as to protect the least competent/least competitive/meanest of their members. But the reality is that most organisations employing minimum wage workers can well afford to pay a decent living wage as long as their competitors are doing the same. Hospitality, cleaning and other service industries are examples.

    In a civilized society the minimum full time wage should be enough for a single person to live on without resorting to taxpayer top-ups. If governments don’t like other people making claims about what a living wage should be, they should make some calculations of their own and feed this into their policies.

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  27. maxwell (56 comments) says:

    It would be easy for advocates of a “living wage” to underestimate, deliberately or by omission,
    the significant flow on effects of increasing the lowest wage by $5.00 an hour. ($13.50 to $18.50)

    Someone on say $20 an hour, supervising $13.50 an hour workers,
    will be asking for a $6.50 an hour increase at their next salary revue, to maintain relativity.

    This will spread upwards through the organisation, especially if it is a heavily beaucratic outfit with defined pay grades such as a council.

    We saw this happen with four weeks leave, senior staff who had an extra week(s) leave are now getting 5 or 6 weeks.

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  28. david (2,563 comments) says:

    So Hamilton is roughly 2/3 the size of Wellington assuming all sorts of things like similarity of structure and rates of pay. 2 Hick towns each trying to outpink the other.

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  29. mandk (1,015 comments) says:

    I’m all in favour of increased wages for lower paid employees, but increasing wages without an increase in productivity simply takes money out of one pocket (i.e. the ratepayer’s) and puts it into another (i.e. the employee’s). It’s a zero sum game.

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  30. redeye (630 comments) says:

    “All the functions of local government could be easily undertaken by central government, and without the duplication and ineptitude which characterises local government.”

    Starting with roads. How often do local councils get into stoush with the NZTA about responsibility for a stretch? They seem to be preparing reports and holding meetings continually where I live. Imagine how much could be saved simply by removing the need for these two bodies to continually negotiate.

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  31. lazza (382 comments) says:

    I stay close to NZ LG finances. FYI over the last six or seven years the TLA Council sector payroll has increased from an average of about 17.5% of Council operating expenditures to in 2012, 22.1% ….with some at over 30%. What is yours?

    I have no problem with incentive payments to Council employees for top performance including maybe even a minimum set as an incentive to good recruitment so long as overall the total is closer to 17% not 30%! of Council operating costs.

    CAUTION: Do not be mislead if “consultants” are on board. Skewed results can occur with double (more likely NOT counting) of this payroll cost element. Also obtain consistent year onyear definitions of FTE’s.

    Independent audit of these numbers is essential as Council payrolls are legendary for their Management-Council spin. And Councils have never been good at marking their own homework!

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  32. flipper (4,198 comments) says:

    I can hear all those US politicians laughing an d laughing as they pay THEIR minimum wage of about = $NZ 11 per hour. Of course this does not affect their local government, where union feather-bedding, benefits and costs are sending councils broke.

    The sad thing is that in NZ, when councils go broke (as they inevitably will if their profligate habits are not curtailed), the NZ tax payer foots the bill

    Bugger that!

    Charles Waldegrave, Susan St John and their ilk can take their silly policy and stick it up their …..

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  33. The Scorned (719 comments) says:

    “Living wage” BS fails the basics of the “broken windows fallacy”….it fails to consider the impact upon ALL parties to the deal….In this case the ratepayers are blanked out and the fact that they have to become a little poorer for the workers to be artificially made a little ‘richer” is missed. That clueless nong Tim Watkin was banging on about how great this was on talkback a few weeks ago….vacant to the real negative cause and effect result this would have.

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  34. Bad__Cat (141 comments) says:

    greenjacket (203) Says:
    July 12th, 2013 at 12:15 pm
    Seriously – NZ has 4 million people – in this modern age, why do we have local government at all?

    No problem, we can dump our shit and rubbish out on the streets, because they’ll soon become real rough, and the horses won’t mind.

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  35. flipper (4,198 comments) says:

    That clueless nong Tim Watkin was banging on about how great this was

    <<<<<<<<<>>>>

    Yes, that is the same clueless nong who is driving the TV One campaign against the casino project… and the one that maintains the overt left wing bias of Q+A.

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