Council’s Living Wage to increase by 2.17%, yet still too many unanswered questions

Today’s revelation that the Living Wage has increased by 2.17% to $18.80 an hour creates further concern for Wellington, says Wellington Employers’ Chamber of Commerce Chief Executive Raewyn Bleakley.

“Wellington City Council has already implemented a Living Wage for direct council staff, and are looking to extend this further.

“While a living wage is well-intentioned, and we all want everyone to be earning more, the way to increase wages is through economic growth not by a stroke of a pen.

“Setting a minimum wage is the role of central government. An arbitrary annual review of the Living Wage duplicates a process that central government already undertakes, taking into account a number of different metrics.

“We still haven’t got the answers from Wellington City Council about parity and performance. Now ‘year on year’ Living Wage increases throw further questions into the mix.

“The Chamber fears this will have a further negative impact on ratepayers, the council’s finances, and other businesses having to compete with Council wages.

“In the long term it could even affect Wellington’s competitiveness.

“There are still too many unanswered questions. On behalf of business, the Wellington Employers’ Chamber of Commerce has to keep asking these questions.

“If the money isn’t coming from a rates increase, council must explain which public projects will suffer as a consequence, or which maintenance will be deferred.

“What’s going to happen regarding the Council Controlled Organisations? They are talking about extending this to them, but that would put further pressure on council finances. And if contractors are somehow going to be expected to follow suit, isn’t that simply going to put up costs, which will lead to higher rates?

"They also need to explain how a blanket pay rise will be effectively linked to training outcomes and greater contribution to the successful outcomes of the organisation.

“If a business was going to use increasing pay to improve productivity it would make its expectations clear and then measure the outcomes. Is this going to happen?

“What’s not clear about this move is how it’s going to help our entire region grow, so everyone can enjoy higher wages.”

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