Unions announced this morning that an hourly rate of $18.40 is the new required ’living wage’ in New Zealand.
The announcement comes after the Anglican Church Family Centre researchers in Wellington this week stated an hourly pay rate of $18-$20 is the basic rate needed for a family of two working adults and two children.
The living wage campaign is a joint community and union movement with the report receiving strong support from across the country.
Service and Food Workers Union National Secretary John Ryall says the report comes after workers saying they cannot live on the minimum wage of $13.50.
John says these comments provide evidence that workers need at least $18.40 just to live with the basic necessities in New Zealand.
Almost 750,000 people earn below the calculated ‘living wage’ including teachers, chefs, truck drivers, mechanics, cleaners and checkout operators.
The ‘living wage’ will not be made the law. Instead, unions are targeting major employers such as councils and universities to pay at least the living wage to their employees.
The unions are also asking cleaning and security companies to make the ‘living wage’ a condition in their contracts.
Tauranga Mayor Stuart Crosby says the $10 Tauranga allegation is a historical reputation the city has left behind.
He says an $18-$20 living wage would be more realistic for families living in Tauranga today.
“It is a more realistic figure to raise a family or live in New Zealand and Tauranga is becoming a more expensive place to live and the reason for that is it’s a popular place to live.
“There are two sides to this coin. One, their employer has to be able to earn the money to pay the wages and that’s really about good business and productivity of the company.
“From my experience good employers will pay employees what they’re worth.”
Stuart says one of the goals council has for Tauranga is to attract higher paying businesses to the city.
Tauranga City Council is also trying to introduce a stronger university presence in Tauranga for people to have an opportunity to improve as a community.
“Generally qualifications do go with higher wages.”
Tauranga Chamber of Commerce Chief Executive Max Mason says $18-$20 is a reasonable estimate of the income needed to sustain a certain quality of life, but says the minimum wage should stay the same.
“There has to be a balance between what employers can afford, and the productivity and contribution of the employee.
“Unfortunately until we raise our productivity as a country our wages are not going to increase. We need to focus on raising skill levels and supporting initiatives to raise productivity in other ways.”
Max says the Tauranga and Western BOP median wage is $14-15 per hour and although that is low, raising incomes is a community challenge, not just the Government’s responsibility to fix.
“As individuals we need to each take responsibility for our own value to an employer. I know it’s really hard – especially for young people in a fickle economic environment - but in a general sense the more skills and education you have the more you will earn.”
The figure is based on Otago University’s calculation of costs of a basic healthy diet for a family of four assuming all food is home cooked with no dining out or takeaways.
Other costs are based on the 2012 household economic survey showing a family of four spends an average of $158 per week on petrol and transport costs and $669 per week on costs excluding food and housing.
A Cabinet decision on any increase to the $13.50 an hour minimum wage is set to be made soon and will apply from April 1.