Time for Phil Goff to See Sense on Living Wage
20 FEBRUARY 2017
FOR IMMEDIATE RELEASE
Phil Goff’s plan to implement a living wage at Auckland Council should be scrapped after it was revealed by the New Zealand Taxpayers’ Union that Wellington City Council’s own living wage policy led to job losses for seventeen parking wardens. Auckland Ratepayers’ Alliance spokesperson, Jo Holmes, says:
“Phil Goff’s election promise to make a council living wage policy a top priority should be scrapped, now that we have
New Zealand evidence of the policies backfiring and leading to a reduction in employment for low-skilled workers.
Contrary to intentions, living wage policies actually hurt the very people they seek to help”.
“In Wellington seventeen parking wardens were not rehired when their contracts were brought back in-house – as a result
of the wardens being under the skill-level of the living wage. Phil Goff’s plans for living wage means this is also
likely to be the case in Auckland."
“That means ratepayers pay more for less and achieve none of the intended poverty reduction outcomes.”
“It is inequitable to impose the cost of social insurance on ratepayers, whose rates are not linked to income. Auckland
ratepayers are already being slammed by rates well beyond the rate of inflation. It is wholly unfair to lump these costs
on too.”
The Auckland Ratepayers’ Alliance calls on mayor Phil Goff to run Auckland Council effectively and efficiently – as he is obliged under section 10 of the
Local Government Act 2002 – by pledging to end his plans to introduce a living wage policy.
Key Findings:
• Seventeen Wellington City Council employees lost their jobs for being under the skill level required for the
living wage.
• Councils hire on merit, so candidates under the skill level commensurate with the living wage will be crowded
out by higher-skilled candidates.
• There is no consensus or scientific basis for the calculation of a living wage. Any calculations are politically
subjective.
• Any living wage in New Zealand will be abated by up to 40% by decreases in government transfers and increased
income tax obligations.
• Living wages shift the burden from means-tested taxpayers to ratepayers and business owners.
• Below-living-wage employment allows for in-work training, where employees trade off lower wages for the
opportunity to learn skills that increase their future earning potential.
A summary and analysis paper by Jim Rose is available for download at www.taxpayers.org.nz/living_wage. Hard copies are available on request.
Note to editors:
The New Zealand Taxpayers’ Union and the Auckland Ratepayers’ Alliance are financially independent sister organisations.
ENDS