Waldegrave on living wage

January 21st, 2014 at 12:00 pm by David Farrar

Rev Waldegrave defends his living wage calculations:

Second, she shamelessly selects luxury categories out of the Household Economic Survey (HES) database which is used for all New Zealanders, including the very wealthy, to imply the includes international travel, Sky TV and the double counting of mortgage insurance simply because the questions are there. HES data is the record Statistics NZ gathers to show movements in income and expenditure for all New Zealanders. Everyone is asked all categories, but lower income households are hardly likely to be recording owning yachts or regular international travel. People who rent houses don’t record mortgage insurance, just as homeowners don’t fill in the rent columns.

Actually many low income households have Sky TV. The point is Waldegrave could have asked Stats NZ for data that excluded the costs of luxuries, but then that would not have produced such a high number. And he states why:

A living wage, on the other hand, refers to having those necessities, but also having the ability to participate modestly in society. Examples include being able to afford a computer, especially for children in a household, and a modest insurance policy. It could also include a trip to family in Australia or Samoa for an important occasion where savings have been put aside or extended family contribute.

So Waldegrave’s living wage is designed to include overseas travel. Clear.

Waldegrave misses the key issue around the living wage, and doesn’t mention it once, because it is so fatal to his cause. Only around 10% of those who earn the living wage are in the sort of household his calculation is based on.

We see this issue also in the . Tyler Cown blogs a recent paper on the US minimum wage:

Only 11.3% of workers who will gain from an increase in the federal minimum wage to $9.50 per hour live in poor households…Of those who will gain, 63.2% are second or third earners living in households with incomes three times the poverty line, well above 50,233, the income of the median household in 2007.

A stunning figure.

I once was earning at (actually below) the minimum wage. That didn’t mean I was poor, or in a poor household. It meant I was young.

 

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44 Responses to “Waldegrave on living wage”

  1. Joanne (177 comments) says:

    Dotcom believes the living wage to be $28,000 per month. He can’t live on anything less.

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  2. Manolo (13,339 comments) says:

    Deport the bugger to Cuba. Let him earn the living wage in a worker’s paradise!

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  3. edhunter (493 comments) says:

    Family trip overseas? Fuck first time I hopped on a plane was when I started working full-time & could pay for the trip myself, I must’ve been deprived as a kid, shit I remember getting a 2nd hand bike for xmas, who do sue or go to for a handout for the obvious trauma & neglect I suffered?

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  4. Fentex (859 comments) says:

    Only around 10% of those who earn the living wage are in the sort of household his calculation is based on

    I suspect DPF meant something more along the line of only 10% of wage earners are in the grouping used to calculate this living wage rather than implying only 10% who are earn the living wage.

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  5. Steve Wrathall (238 comments) says:

    I didn’t go overseas until I was 28. Guess I hadn’t been participating in society until that point.

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  6. Fentex (859 comments) says:

    In this post DPF uses an example from the U.S to support a position he argues which I find an interesting option when discussing NZ policies.

    In NZ we are discussing issues like Charter Schools and Public Private Partnerships, if we were to assume our results of attempting such policies were to equate with other countries then we’d pretty much have to abandon them outright because by NZ standards these policies are failures in both places.

    They don’t have to be in NZ, we are a different country, we can implement policies differently – for instance our lack of corruption and more open government makes Public Private Partnerships more likely to succeed than they did in Britain (though personally I disapprove of most such ideas as simple public guarantees of private profit and find simple privatization a more honest option).

    Our society and needs plus hopefully better over-sight gives the idea of charter schools more credibility, a tightly focused effort in low achieving locations could succeed.

    My point in writing this is while inevitably we must look elsewhere to see what has happened there but not here for illumination it’s a double edged sword to make arguments for NZ on the basis of events in other nations, cultures and jurisdictions. Picking something you like when it supports from one place encourages opponents to pick what they please from a whole world of opportunities to find counter examples.

    We are NZ, we must keep our own nature in mind when making policy.

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  7. dime (9,392 comments) says:

    no tablets for the poor? smart phones?

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  8. Weihana (4,496 comments) says:

    dime (8,116 comments) says:
    January 21st, 2014 at 12:45 pm

    no tablets for the poor? smart phones?

    Tablets and smart phones are types of computers and a computer was mentioned. I would say internet connectivity is more important than a television. I find it hard to denounce the poor as undeserving because they make poor life choices if we deny the opportunity to utilize those technologies that tend to make our own life choices better than theirs.

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  9. dime (9,392 comments) says:

    “Tablets and smart phones are types of computers and a computer was mentioned. ” are they? well shit!

    youd have to be an idiot to buy a kid aged 5+ a tablet over a PC. but they probably do..

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  10. Weihana (4,496 comments) says:

    Actually many low income households have Sky TV.

    How many? How low is their income?

    Really, no matter what your income you shouldn’t get Sky TV. :)

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  11. Cato (1,094 comments) says:

    “They don’t have to be in NZ, we are a different country…”

    Yes. Let us discard the attempt to discern general rules from observing the consequences of policies in jurisdictions not precisely like us (i.e. all other jurisdictions). Let us not forget to discard our own past experiences either – remembering that the past is a foreign country also. Let all policy decisions be based on a priori reasoning alone.

    You wouldn’t happen to be a left-liberal, would you?

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  12. tvb (4,199 comments) says:

    People on minimum wages are either young and in training or deadbeats who won’t up skill. Good employers are very willing to reward high productivity workers because they want to keep them.

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  13. Kimble (4,377 comments) says:

    Yes. Let us discard the attempt to discern general rules from observing the consequences of policies in jurisdictions not precisely like us …

    Its what you have to do when the facts dont agree with your ideology.

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  14. Sponge (141 comments) says:

    A monumentally stupid concept.

    This meddling parson should stick to subjects he knows about (i.e. sky fairies).

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  15. ross69 (3,652 comments) says:

    I once was earning at (actually below) the minimum wage. That didn’t mean I was poor, or in a poor household. It meant I was young.

    A facile and patronising comment. In other words, if you’re not young you have no excuse to be on the minimum wage!

    Rather than focus on the living wage, how about you focus on those employers who think low wages are the way to go.

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  16. alwyn (380 comments) says:

    The Reverend Charlie doesn’t even seem to able to get his numbers right either.
    He claims, of Australia that “Its statutory minimum wage at $NZ19.63 was already more that a dollar HIGHER than the living wage (of $18.40)”.
    According to the Australian Government website the minimum wage in Australia is $A16.37. As of two minutes ago, and using an exchange mid-rate this converts to $NZ17.33 which is in fact more than a dollar LESS than the living wage.
    Oh well, to bad, never mind. Accuracy with his facts never seems to bother the left.

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  17. ross69 (3,652 comments) says:

    Nicola Young, a Tory with a sense of entitlement, actually doesn’t know what she’s talking about. In her diatribe, she said:

    The living wage is “higher than the United States, United Kingdom, Australia, and Canada.” But, according to Waldegrave:

    “Australia does not have a set living wage. Australia hardly needs to because its statutory minimum wage, at $NZ19.63, was already more than a dollar higher than the living wage here when it was set last year. In Canada, the living wage is set city by city. In Vancouver it is currently $NZ21.40. For most cities in British Colombia, for example, the living wage is higher than New Zealand’s.”

    No surprises that Young has to resort to telling porkies to make her point.

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  18. Weihana (4,496 comments) says:

    dime (8,117 comments) says:
    January 21st, 2014 at 1:11 pm

    youd have to be an idiot to buy a kid aged 5+ a tablet over a PC. but they probably do..

    I’d prefer a PC as well as they have far more potential. It’s worth remembering that computers reduce in price exponentially. You don’t need a new top of the range PC to get decent functionality. Even a new budget computer sells for quite cheap. The same is true of tablets and smart phones that are just a few years old.

    I wouldn’t entirely dismiss the value of tablets for children though. Their interface is simple and convenient. Ultimately you can always say there are alternatives. A child could… *gasp*… visit a library. But a tablet clearly has more potential to make access to information ubiquitous in the lives of those who arguably need it most. There will always be tradeoffs to be made within your budget though. PCs are the best, but from a practical point of view if certain people are “idiots” will the PC get used or will some “illegal operation” scare them away until it quietly dies in the corner covered in dust?

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  19. srylands (386 comments) says:

    “In other words, if you’re not young you have no excuse to be on the minimum wage!”

    Yes that is exactly correct. If you are not young, you either have no skills, and no motivation (both of which are your fault) or something really bad has happened to you (in which case you should seek counselling).

    BTW – since 2003 the minimum wage in Argentina has increased by 1,300%. How do you think that is working out?

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  20. ross69 (3,652 comments) says:

    Business giant KPMG, with a UK staff of more than 5000 and a turnover of £1.6 billion (NZ$3.18b), has been paying a living wage since 2006. It states that, “staff turnover has reduced, and productivity has increased as attitudes are now more flexible and positive”.

    Boris Johnson, the Conservative London Mayor, and whose council pays the living wage, is on record as saying it “is good for London’s growth and productivity”.

    Don’t know why DPF omitted this from his opinion piece. Obviously didn’t fit with his ideology.

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  21. srylands (386 comments) says:

    CORRECTION:

    Since 2003 the minimum wage in Argentina has increased by 1,700%.

    http://www.argentinaindependent.com/currentaffairs/newsfromargentina/president-announces-25-increase-in-minimum-wage/

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  22. ross69 (3,652 comments) says:

    If you are not young, you either have no skills, and no motivation (both of which are your fault) or something really bad has happened to you (in which case you should seek counselling).

    You need more than just counselling, may I suggest a large dose of medication.

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  23. Kea (11,878 comments) says:

    How dare these rapid Maoists demand enough to live on in return for a full weeks work !

    The cheek of these commie subversives. What ever will they want next ? :)

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  24. Cato (1,094 comments) says:

    That’s interesting that it worked for KPMG. Good for them! I’m glad they had the freedom to pay their staff as well as they felt they could.

    I wonder if smaller firms and enterprises – you know, ones that have less than 150,000 employees and annual revenue of less than $20 billion a year (such as the Wellington City Council and pretty much nearly every NZ business large and small) might have a different experience should the same practice be forced on them.

    Nah. It wouldn’t matter anyway. What matters about a policy are the intentions behind it.

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  25. Fentex (859 comments) says:

    Let us discard the attempt to discern general rules from observing the consequences of policies in jurisdictions not precisely like us

    You may have overlooked, or not recognized, my expression of this idea…

    we must look elsewhere to see what has happened there but not here for illumination

    I don’t discount learning from others, my point was to observe that when others experience is used in argument we must keep in mind our differences in making our own plans.

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  26. Weihana (4,496 comments) says:

    tvb (3,702 comments) says:
    January 21st, 2014 at 1:19 pm

    People on minimum wages are either young and in training or deadbeats who won’t up skill.

    Working long hours for little pay is too comfortable? It must be great to know everything about everyone else’s situation. :)

    Good employers are very willing to reward high productivity workers because they want to keep them.

    In other words, the market rewards highly skilled individuals and punishes employers who do not appreciate their true value. So why don’t they upskill? They’re too lazy but they’ll work 40 hours a week on minimum wage. Wouldn’t it be more likely they are on a benefit selling dope if laziness was the issue?

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  27. ross69 (3,652 comments) says:

    I wonder if smaller firms and enterprises might have a different experience should the same practice be forced on them.

    It wasn’t forced on KPMG and it’s not being forced on the WCC. You might have been away at the time, but the WCC voted for a living wage.

    Isn’t democracy great. :)

    http://www.stuff.co.nz/national/politics/9506470/Living-wage-voted-in-despite-criticism

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  28. unaha-closp (1,111 comments) says:

    “In Vancouver it is currently $NZ21.40. For most cities in British Colombia, for example, the living wage is higher than New Zealand’s.”

    The unemployment rate in BC is 50% higher than in Alberta and 80% higher than in Saskatchewan.

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  29. Cato (1,094 comments) says:

    Yes, I said it was great that it was not forced on KPMG – though I take your point about WCC. Do I take it then that you do not support any coercive living wage legislation?

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  30. david (2,535 comments) says:

    Ross69 @1:35 talks about KPMG – a professional services firm of auditors and Chartered Accountants as if they employ significant numbers of minimum wage workers. I would be surprised if the tea lady and mailroom boy were paid that low so any claims about “living wage” in that environment would have to be more froth than substance.

    In fact I suspect that KPMG have used it to disguise pay a slight margin over their competitors for new graduates in an attempt to skim the cream of the crop for their graduate recruitment programme.

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  31. davidp (3,540 comments) says:

    ross69>Australia does not have a set living wage. Australia hardly needs to because its statutory minimum wage, at $NZ19.63, was already more than a dollar higher than the living wage here when it was set last year. In Canada, the living wage is set city by city. In Vancouver it is currently $NZ21.40. For most cities in British Colombia, for example, the living wage is higher than New Zealand’s.”

    Are all these foreign living wages also set by their local Anglican church? If so, how does the church ensure that they are set consistently? For instance, does the British Columbia living wage also include an annual holiday in Australia? I’d hate to find that the NZ living wage included Sky TV while Canadians were denied this basic necessity, or that a Canadian living wage included tickets to see professional ice hockey every week while NZ workers have to live in hockey poverty.

    Also, how is there a living wage for all of British Columbia? Vancouver is expensive, but Kamloops is not. Surely every city and town needs the Anglican church to set a tailored town-specific living wage. The same applies in NZ where Auckland is expensive but you can survive on almost nothing on the coast near Gisborne.

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  32. ross69 (3,652 comments) says:

    Do I take it then that you do not support any coercive living wage legislation?

    Correct, I don’t, unless of course that is what voters want. Labour may well have a mandate to introduce such legislation after the next election. If so, there can be no complaints from the Right.

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  33. Weihana (4,496 comments) says:

    srylands (151 comments) says:
    January 21st, 2014 at 1:33 pm

    Yes that is exactly correct. If you are not young, you either have no skills, and no motivation (both of which are your fault)…

    What would constitute proof of this assertion? I know we tell our children that no dream is too big… but surely reality is a little more constrained than this. There seems plenty of people that have little more than basic skills to recommend them and consequently they are in no position to negotiate with an employer beyond what the law requires at a minimum. I’m not sure how laziness is the obvious answer since I find it hard to envy people who work long hours for little pay.

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  34. Cato (1,094 comments) says:

    “Labour may well have a mandate to introduce such legislation after the next election. If so, there can be no complaints from the Right.”

    That’s a pretty idiotic thing to say. The people voted National in and yet you whinged unceasingly about asset sales.

    The democratic legitimacy of a policy guarantees neither its prudence nor its fairness.

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  35. srylands (386 comments) says:

    “There seems plenty of people that have little more than basic skills to recommend them and consequently they are in no position to negotiate with an employer beyond what the law requires at a minimum.”

    I was not suggesting that people who work for minimum wage are lazy in their jobs. Most of them work hard. When I was 18 I had exhausting, difficult, sometimes dangerous jobs paying at or slightly above the minimum wage.

    If you stay on minimum wage, you have either chosen to do so or you have not acquired the skills to get you out of it. There will be a small number of people lacking the cognitive ability to acquire any marketable skills. That is sad for them. However for most people, they can undertake training to acquire some skills that will pay more. There are few barriers in New Zealand to undertaking at least some up skilling that will make you better off.

    So I maintain my view that for most older people on a minimum wage it is a choice they have made.
    Ross – you are a fool making gratuitous comments. Go back to The Standard.

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  36. Grendel (950 comments) says:

    Re the comment on Sky TV. I do financial counselling as a sideline of my business, so i see people of mid to low incomes (and some higher but usually for other issues) for financial assistance, which is almost always budget deficit due to too much consumer debt.

    the average amount of consumer debt i see is around 65K, with the most being 120K so far (takes a lot to surprise me these days).

    so far, in 100% of the cases, the people have sky and if they are behind on any payments its never for the car loan (which they also always have, for a car usually more than twice the value of mine, and i earn a lot more than they do).

    people can be struggling to buy groceries and worried about making rent, but they wont cancel sky or miss a car payment (car debt collectors are very quick to repo the car).

    if i was to write a book on budgeting i am considering calling it “only poor people have sky”

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  37. burt (7,797 comments) says:

    It’s OK people – All Labour MPs will be on the living wage at the same level as they claim everyone else should have… They will lead by example rather than stay in the 1% telling other people what to do.

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  38. slijmbal (1,210 comments) says:

    “Rather than focus on the living wage, how about you focus on those employers who think low wages are the way to go.”

    I do love how it’s always the evil employers.

    The thing about competition is that is that a lot of such decisions are market driven. If the end customer will only pay X that tends to drive what type of wages can be afforded. Similarly, if it’s a high value product then high wages get paid as the valuable employees are fought over.

    The real issue is that some jobs really are close to zero skilled and such a poor level of skill is rewarded with a minimum wage. Personally, if I ran such a business I would see if I could pay a bit extra and/or provide some benefits as even in such types of jobs there is normally value in getting the better employees but the economics would limit what is possible.

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  39. torro (14 comments) says:

    A low wage provides an incentive to up skill. Providing a ‘living wage’ to an unskilled person will have the opposite effect. If you can have children, buy a house, and travel overseas without having the need to work harder at your life, then some people will remain unskilled. If we go down the living wage road we will remain in part an unproductive, unskilled society, the very opposite of Labour’s stated policy. They need to take the emotion out of the argument and look at cause and effect if the really want to lift lower wage people out of poverty.

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  40. Fentex (859 comments) says:

    The people voted National in and yet you whinged unceasingly about asset sales.

    I suspect sarcasm in the comment – the point, I suspect, to imply that those who claimed people oughtn’t protest assets sales because National had a mandate (because they were elected with it as a policy) would be hypocritical to complain if Labour enacts a policy because surely they have the same mandate.

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  41. OneTrack (2,581 comments) says:

    ross69 – “It wasn’t forced on KPMG and it’s not being forced on the WCC.”

    “Correct, I don’t, unless of course that is what voters want.”

    What about WCC ratepayers/voters? Or dont they get a say?

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  42. OneTrack (2,581 comments) says:

    ross69 – “Labour may well have a mandate to introduce such legislation after the next election. If so, there can be no complaints from the Right.”

    They won’t be. All the other toxic policies that the hard left will bring in will result in many of those (evil) employers either cutting staff (those that cannot generate 18.40 worth of benefit), downsizing, moving offshore or retiring.

    Never mind, those people laid off can be employed by the new Ministry of Railways, and employed on the living wage walking the tracks. They can even be given Ministry supplied accomodation at Otira. High five :-).

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  43. Komata (1,109 comments) says:

    torro

    Re:’They need to take the emotion out of the argument and look at cause and effect if the really want to lift lower wage people out of poverty’.

    The problem is that they DON’T really want to do this; effectively the words are window dressing which sound good and get them votes. Bearing in mind that the current labour ‘hierarchy’ are mainly Uni grads’ and as such have never done ‘proper (labouring-type) work’, they have little contact with ‘the poor’. For these people, it is far easier to have an ‘underclass’ and blame the current government for the fact, than to actually state exactly WHAT will be done to alleviate the problems of said ‘underclass’ should they get into power. Noticeably, the words are long, the policies very small.

    Rest assured, because to alter the ‘status quo’ would not suit those in power, should labour become the government, aside from ‘cosmetic’ tweaking’, nothing will change.

    But doesn’t it sound good?

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  44. torro (14 comments) says:

    Exactly, Komata. Wouldn’t it be nice for the media to notice…

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