Will Christchurch City Council join the stupidity?

February 5th, 2014 at 11:00 am by David Farrar

The Presss reports:

The is under pressure to find extra money to ensure all its employees get paid at least $18.40 an hour but its finance chairman is warning it cannot afford it.

“We are going through a process of cutting costs, not adding to them,” Cr Raf Manji said yesterday as councillors met to consider a report on the implications of introducing a .

By law, workers must be paid a minimum of $13.75 an hour, but $18.40 is what the Living Wage movement believes a family of two adults and two children, where one adult works fulltime and the other works part-time, needs to meet basic living costs.

That is the key point. It is a calculation for one specific family type. That type of family is only around 10% of families earning under $18.40 an hour. Claiming that a 16 year old boy living at home must be paid $18.40 an hour because that is the income needed to support a family with two kids is ridiculous.

A report prepared for the council’s chief executive and employment matters committee, which met publicly for the first time yesterday, estimated the cost of increasing their hourly rate to $18.40 an hour at $1.1 million, excluding KiwiSaver, overtime and penal pay.

It also warned that introducing a Living Wage was likely to have a knock-on effect for other staff as the council would need to maintain relativities in remuneration.

That could add another $1 million to the council’s wage bill.

So proponents want ratepayers to pay an extra $2 million a year. Are ratepayers in Christchurch not already struggling enough?

Also the Councils seem to ignore the very serious flaws in the calculation by Rev Waldegrave, which include:

  1. Only 12% of low income households are two adults and two dependents, which the Waldegrave calculation is based on
  2. They assume you need 10 hours of childcare a week, even if the children are aged over 14
  3. They calculation of level of “basic necessities” is not based on any empirical measurement of the lowest cost of necessities, but merely a proportion of the average expenditure in deciles 1 to 5 (this one is key – it is a calculation based on the Browns should be spending as much as the Jones, and is not a calculation on how much income the Browns need)
  4. The calculation doesn’t account for some sources of household income such as trade-ins, sales, teenagers income (yet does include their costs) and school donation tax refunds
  5. The calculation double counts some expenditure such as childcare costs
  6. The calculation includes as a basic necessity costs such as Sky TV, pets, international travel and video games
  7. The calculation includes insurance for dwellings and mortgages, despite assuming they are renting

Any politician that advocates the living wage calculation as a serious way to do policy should not be trusted with finances.

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28 Responses to “Will Christchurch City Council join the stupidity?”

  1. dirty harry (432 comments) says:

    smells like labour Dalzell to me…didnt take her long to paint the place red

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  2. KiwiGreg (3,181 comments) says:

    Only people spending other people’s money would even consider this idiocy.

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  3. Ashley Schaeffer (413 comments) says:

    Are ratepayers in Christchurch not already struggling enough?

    Christchurch ratepayers voted in a socialist ex-Labour Party MP, what do they expect?

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  4. Grizz (500 comments) says:

    Challenge for you DPF. Calculate a living wage according to what you think are reasonable cost for a family to live on the basics. Feel free to exclude overseas travel, pets, house insurance, skytv etc from your workings. Assume household of 2 adults and 2 kids with one adult working full time (40hr/week) and one part time, say 20hr/week.

    [DPF: $14.25 an hour, when you include generous WFF payments]

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  5. NK (1,072 comments) says:

    Do it yourself, Grizz.

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  6. louie (89 comments) says:

    I truly hope they won’t join in. The photo in today’s Press showed a smug looking lot making submissions for it. Hope the t-shirts they were wearing were all made by people on a living wage.

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  7. NK (1,072 comments) says:

    The madness of the left is crystal clear as exemplified in Auckland right now. Today, the council is urging the government to ban window washers; you know, those people from the generally poorer sector of society who are trying to earn an extra dollar or two. The council wants this abolished so they can’t earn money from window washing. Remember, these poor sods don’t work at the council, so cannot take a “living wage”.

    But on the other hand, the council is considering increasing the pay of all council contractors and workers through its “living wage” and thereby creating an even bigger gap between those who work, and those who don’t, but want to (the window washers).

    If you wanted an example of how socialist policies regarding welfare and work trap people in poverty, I give you the Auckland Council’s policies controlled by the Left.

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  8. tas (596 comments) says:

    I don’t think you should expect to be able to support a family on a minimum wage job. The minimum wage should be for young, single, childless people. If you want kids, get a decent income first.

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  9. iMP (2,247 comments) says:

    So, Mr Manji, did you approve Mayor Dalziel’s 100% increase in staff for the mayoral office? How is that “cutting back” hmmmmm. And who recruited you to Council again?

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  10. Sponge (147 comments) says:

    I knew she would be into this sort of nonsense. We are already in the shit and it is only going to get worse.

    This whole living wage thing it just a nonsense made up by a meddling do good parson.

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  11. wreck1080 (3,735 comments) says:

    they can just do what tauranga wants, and lift rates by 13%.

    Tauranga is a shocker actually, the last year or 2 hasn’t been so bad, but, double digit percentage increases seem to be the norm.

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  12. metcalph (1,383 comments) says:

    So, Mr Manji, did you approve Mayor Dalziel’s 100% increase in staff for the mayoral office?

    Required to fulfil certain duties stipulated by legislation. And it wasn’t a council vote responsible for the hires.

    How is that “cutting back” hmmmmm. And who recruited you to Council again?

    Manji was, the last time I looked, a (London) City Banker, who recently voiced plans to float some of the city’s assets. I’m not too worried about his fiscal prudence.

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  13. hj (6,374 comments) says:

    It’s o.k that property investors get rich on population growth and public services though!?

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  14. igm (1,413 comments) says:

    They elected a lying left-leaning leech as mayor, they now get what they deserve. Unfortunately she was probably elected by a majority of non-ratepayers, like Lecher, who seems to be there for good, with the help of Campbell, Fairfax, and APN. These Labour-orientated arseholes seem to be hell bent on stuffing NZ.

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  15. itstricky (1,579 comments) says:

    18 an hour would have been a starting wage for a professional 15 to 20 years ago. Why would we not expect it would be a starting wage for lesser skilled work now? Or, are we denying the existence of inflation, demand and various other factors and also admitting that ‘trickle down’ just don’t work?

    What would be interesting would be a comparison of various wages in different brackets over the years and their subsequent comparison to cost of living averages. But here we are with another denial letter from the host.

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  16. itstricky (1,579 comments) says:

    Ready to debate the topic like a sophisticated grown up I see, NK

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  17. Goldsmith (22 comments) says:

    Yes, a Labour mayor is now their leader.

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  18. tvb (4,210 comments) says:

    Coucillors should be given a stark choice. Rates increases with the policy and rates increase without the policy. Let us see how they vote. It is a basic fact of life there are not unlimited resources, choices have to be made. No one nor any organision has unlimited funds to do what they like. People on quite small incomes struggle to pay their rates. They have to go without to do so.

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  19. NK (1,072 comments) says:

    Ready to debate the topic like a sophisticated grown up I see, NK

    If you can manufacture a debate why prohibiting work is a good idea then feel free to have a go. At the same time, an argument why price mechanism is a worthless economic tool (viz a viz labour supply) would also be great.

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  20. Left Right and Centre (2,823 comments) says:

    Go for it. Start the living wage off. Watch all the other wage rates in the economy adjust accordingly.

    Let’s see if the intro econ books know what they’re talking about.

    I thought WFF was the ‘family living wage’ scheme. It’s no fault. Like ACC. What a wonderful utopian society. You can be a total dumbfuck – breed and bleed other taxpayers – and that’s fine. Because it would cost even more if they were poorer according to the theory of ‘the dumber and poorer people are, the more dumb and poor people they give birth to’. It’s more lose-lose. If you can solve poor dumb people – you’d make Einstein look IHC.

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  21. SPC (5,397 comments) says:

    The principle of the living wage is compensation for higher living costs than nationwide applying in some urban centres. Thus it applies in London and the Tory mayor supports it. A city needs its service workers and to transport them causes transport/congestion problems.

    One major cost influenced by local markets is housing and this is why we have an AS at variable levels

    In Christchurch the AS is $120 a week, it is $165 in Wellington and $240 a week in Auckland. Historically
    housing was cheaper in Christchurch but this is no longer the case and because of this there is hardship.

    The government needs to increase the AS to at least $165 a week, rents are now at Wellington levels and still rising.

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  22. SPC (5,397 comments) says:

    More generally than taking local costs into account (as can be done with an AS and lower public transport fares for those on low incomes – CSC holders), a campaign for the living wage is based on three premises

    1. The good employer would pay more than the MW required. Just as the good company would have a good environment record/community citizen standing.

    2. Councils and government should match the good employers.

    3. A MW higher than the $15 proposed might cost jobs in the private sector if applied across the board, but this is not the case for councils and government.

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  23. SPC (5,397 comments) says:

    PS The minimum wage will probably go to $14 this year with an increase to $14.50 signalled for 2015. That would mean Labour’s $15 an hour MW would be only 50 cents higher than under a re-elected National government. Labour has had a $15 an hour MW policy for 3 years.

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  24. SPC (5,397 comments) says:

    The living wage differs from the minimum wage in that the latter is set by law and can fail to meet the requirements to have a basic quality of life and leaves the family to rely on government programs for additional income. It differs somewhat from basic needs in that the basic needs model usually measures a minimum level of consumption, without regard for the source of the income.

    Living wage is defined by the wage that can meet the basic needs to maintain a safe, decent standard of living within the community.The particular amount that must be earned per hour to meet these needs varies depending on location.

    Poverty threshold is the income necessary for a household to be able to consume a low cost, nutritious diet and purchase non-food necessities in a given country. Poverty lines and living wages are measured differently. Poverty lines are measured by household units and living wage is based on individual workers.

    A related concept is that of a family wage – one sufficient to not only support oneself, but also to raise a family.

    http://en.wikipedia.org/wiki/Living_wage

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  25. thor42 (922 comments) says:

    Send bloody Charles Waldegrave to North Korea.

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  26. PaulL (5,875 comments) says:

    @SPC: I’m well aware of what the concept of the living wage is. I’m just not clear on why we think that it should be possible to raise a family of 4 on the minimum wage. If you were genuinely raising a family of 4 on the minimum wage, you’d also get a set of transfers from the govt. Those transfers don’t appear to be calculated into the “living wage” concept.

    There are problems with increasing wages for everyone in order to increase household income for 4 person households. If we do that then a lot of people will get a pay increase who don’t “need” it (to the extent that living wage in any way reflects need). It would be more efficient to pay the minimum wage, and then top up for those who “need it” than to increase everyone’s wage. And that’s, broadly, what our current system does. I’m not clear why that needs changing.

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  27. SPC (5,397 comments) says:

    PaulL, are you? The living wage concept is related to local living costs, not nationwide top ups to families on low to middle incomes (not just those on MW).

    Is the Rev? He seems to confuse family wage with living wage? A living wage is about the living costs faced by the individual.

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  28. itstricky (1,579 comments) says:

    If you can manufacture a debate why prohibiting work is a good idea then feel free to have a go. At the same time, an argument why price mechanism is a worthless economic tool

    Aha! We have a clever dick! If you can speak to me in plain layman’s, non-economic English I am sure I can have a blast.

    In the meantime – 20 years ago 18 an hour would have been a good wage. Right now that same 18 an hour is pretty much worthless. So, tell me, Mr Economics – what happened over 20 years? Let’s draw it in pictures. 30 years ago you would have paid 20c for an iceblock. Now you can’t get it for $2. And how do you think people who earn less than 18 an hour at the moment are getting on out there in the real world? I mean, $13/hour is now shit all, right? In fact it’s less than shit all. If you’re all Mr Statistics as well as Mr Economics, you’d graph both of those together over a period of years and see how you got on. Not wax lyrical about whether you think a particular “value” is appropriate or not – that’s what our host continues to do…

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