Perched high above minimum wage sits the almighty Living Wage rate, calculated at $21.15 per hour in 2019. The Living Wage concept is simple: it is the hourly wage a New Zealand worker needs to ‘pay for their basic expenses, actively participate as a citizen in the community and live with dignity.’ It was first calculated independently by the New Zealand Family Centre Social Policy Unit to reflect the budget items of workers and their families, such as food, transportation, housing and childcare.
The Living Wage rate is voluntary; however, the old adage that ‘people are companies’ biggest asset’ has prompted many employers to get behind the Living Wage pledge to pay their staff more than the Government set minimum of $17.70 per hour — four dollars more to be exact.
New Zealand brochure distribution company VisitorPoint dedicated to paying its 28-strong staff the Living Wage last month, which means all of them, including future staff, are now entitled to the $21.15 hourly rate minimum. The company’s move aligns with its commitment to Tourism Industry Aotearoa’s sustainable tourism promise, which includes businesses paying a fair wage to all staff. “As tourism businesses continue to grow throughout the country, we do too,” said VisitorPoint general manager Jenni Powell. “From a financial and moral standpoint, this is the right choice for us to make."
Narrowing the lens on Wanaka, an increasingly pricey town where many residents work two jobs and still wish they could win the Lotto to afford the cost of living, should the town’s true Living Wage be raised above the national average? Despite not having supporting data, the Wanaka Chamber of Commerce said that push is likely to ring true, making it even more important for employers to keep aligned with the current market rates.
The Ignite Wanaka Chamber conducts an annual Business Confidence Survey (BCS) to gauge the confidence, or otherwise, that business owners feel over the last six months and the next three months. This allows for Chambers nationally to track trends and to use the data to forecast any downturns.
Ignite Wanaka executive officer Naomi Lindsay said, “Based on the 2018 Ignite Wanaka BCS, approximately 40 percent of businesses were paying their unskilled staff the Living Wage, compared to more than 70 plus percent in the skilled labour sector. Around 50 percent paid $17 to $21 per hour so there could be a higher percentage in there (Living Wage was $20.55 at the time of the survey).”
Lindsay said many Wanaka business owners are opting for the Living Wage as a way of retaining good staff. “While this impacts their bottom line ‘on paper,’ the issues of not securing and keeping staff could make that bottom line a lot worse. This is something owners have had to address over the last couple of years particularly. Some industries, such as hospitality and tourism, are often perceived as lower wage industries, but largely we hear that businesses locally want to keep their good staff and will invest in them to do so.”
On a local level, the Wanaka Sun asked a few businesses in town about their decision to opt in or out of committing to the Living Wage.
Wools of Wanaka owner Ann-Louise Stokes, who employs three ‘skilled retail staff members’ and an occasional part-time employee, said her company’s starting wage is the Living Wage. “It never occurred to me to pay them anything less,” said Stokes. “I value them immensely and consider good retail staff a major asset.” Her team also receives bonuses twice a year and have generous buying privileges.
Another local business owner, who wanted to remain nameless, told us he opts to pay his labourers and gardening staff through contractor agreements. “I've found our staff have to have [up to three] jobs to make ends meet. Seasonal employment makes for unreliable work. Plus, we've found that it's not worth putting people on wages as many people don't last. They can't stick it out as the cost of living forces them to move on elsewhere. So, we use contracting labours per job/project. Every time we want to put someone on full-time or on a more stable work agreement, they decide to leave the area because they can't afford to stay. But, they're easily replaced with seasonal workers looking for temporary work.”
He added, “Our competitors pay minimum wage making it difficult to remain competitive in the field when doing quotes; [we have] been undercut by larger companies that have moved in from other places and [paid] their labour minimum wage, which makes paying our staff a fair wage not feasible and very difficult. Basically we'd lose money on projects.”
Despite the high turnover of staff members, the business owner said he still finds ways to invest in his team members. “We offer a good hourly wage, $20 to $25 per hour. We provide all of the safety gear, tools and fresh coffee in the morning. There's opportunity to showcase yourself within our business, but we find people aren't here to stay for the long term and just want a cushy job for the season before going back ‘home’ to their careers elsewhere.”
According to BCS 2018 research, affordability of living was one of the top reasons businesses struggled to attract and retain quality talent. “As the minimum wage and Living Wage rise annually, businesses will need to build in new resilience to their business models, re-examine their best business practises and look at others costs to ensure they remain competitive,” said Lindsay. “The future of the New Zealand and global workforce are looking for more than just a paycheck, they’re increasingly looking to work for businesses that align with their own personal values, including things such as the company’s sustainability commitments (including if they pay the Living Wage), ensuring a healthy, warm home for your staff (‘sick’ homes are linked to increased health issues and more time off sick), personal development opportunities and other opportunities outside of the ‘norm’ of work (volunteering and community support work).”
When all is said and done, is the 2019 Living Wage actually enough income for average locals to offset the often unsustainable price tag of living in Wanaka, a place where buying an organic avocado in off-season feels like a splurge? Jamie Slade, who works in town and makes more per hour than the Living Wage, said no. “The Living Wage is not high enough for our town given the higher than average rental prices, food prices and even general costs of activities, like going out for a beer on the weekend,” he said. “I cannot imagine how a young family could make ends meet at that level of income.”
The Wanaka Sun would like to hear if you feel $21.15 per hour is a viable Living Wage for Wanaka; visit our Facebook page to share your thoughts.