Council must explain true cost of Living Wage

If Wellington City Council adopts the living wage it must explain to ratepayers where the money will come from and the downstream ramifications of implementing it, says Wellington Employers’ Chamber of Commerce Chief Executive Raewyn Bleakley.

“There are a lot of unanswered questions.”

“A living wage is well-intentioned, and we all want everyone to be earning more, but if this is to be approved then ratepayers need to know exactly where the money will come from and what the ramifications are.”

“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.”

“And what about the flow-on costs?”

“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? They haven’t mentioned that. We await the detail.”

“Also, have they taken into account those council workers who are now on around $18, who will want an extra $5 an hour more because they have lost parity? Those people will surely have a case to ask for more. And if that happens what effect will that have on the city’s finances?”

“The Chamber fears there is a very good chance that unless this has been done carefully and properly, the living wage will have a negative impact on ratepayers, the council’s finances, and even its ability to attract new staff with competitive wages. In the long term it could even affect Wellington’s competitiveness.”

“The question also needs to be asked: would the money this will cost – up to $750,000 a year – be better put towards new community projects, or schemes to attract new businesses to the city, which would boost jobs and add long-term benefits to the economy.”

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

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