The campaign for a living wage in New Zealand

By John Pope (special to CDHR)

(From our Bulletin Archives: originally published in June 2014)

LogoOn December11 2013 the Wellington City Council, after several months of public hearings and lobbying by the Living Wage Aotearoa New Zealand movement, became the first in the country to pay the “living wage” to all staff directly employed by them and they also pledged to develop a strategy to ensure that all those who work as contractors or employees of Council Controlled Companies will also receive the living wage by 2015. This is the second victory for the movement which last year secured a similar agreement with the directors of the largest retail chain in the country.

The Living Wage Aotearoa New Zealand movement and the campaign for a “living wage” were launched by the Food and Service Workers Union (SFWU) in May 2012. This movement was created by the SFWU in reaction to the failures of the union movement to secure a decent wage increase for their members or any meaningful rise in the minimum wage over the last five years. The movement now has the backing of 130 community and church groups concerned with inequality and poverty, as well as the support of the wider union movement and the tentative support of the two centre-left political parties in parliament.

The campaign for a “living wage” is a reaction to the deleterious effects of three decades of neo-liberal economic reforms during which various governments’ enacted market driven policies at the expense of the redistributive policies that had been the norm in the previous three decades. These reforms led to cuts in public services such as education, healthcare and social security and the dismantling of the mechanisms that reduced inequality and enabled equitable growth. They also de-regulated the economy and the labour market on terms favourable to the interests of business which made it very difficult for unions to organise workers and engage in collective bargaining with employers and they also stopped playing the leading role in the setting of the minimum wage and basic working conditions. These policies led to a massive increase in the profits of the corporate sector along with their ability to dominate the wider economy and society and the general impoverishment of more and more workers and their families.

The goal of the living wage movement is to reverse this trend by promoting a “living wage” of $18.80 per hour for all workers. The movement has calculated that this hourly rate will generate the “living wage” that is needed to provide workers and their families with the basic necessities of life, and to allow them to live with dignity, and to participate as active citizens in their communities. The first step of their campaign was the introduction of the concept of a “living wage” into the national political discourse to generate a debate about inequality and poverty and what ought to be done to alleviate it. The second step was to take advantage of this debate by putting moral pressure on specifically targeted employers to persuade them to pay their employees a “living wage.” The long term hope of the movement is that as more and more employers choose to pay the “living wage” it will eventually become the starting point for all future wage negotiations across the wider economy.

There is no doubt that something has to be done as 750,000 workers, or 40% of the workforce, are presently earning less that the proposed “living wage” but the question that needs to be addressed is whether the living wage movement and the promotion of the “living wage” is, in and of itself, capable of improving the lot of these low-paid workers in contemporary New Zealand society.

The New Zealand living wage movement has had some success in securing the “living wage” for some workers in the public sector and small groups of workers in the private sector but they like their counterparts in America and The United Kingdom have not been able to replicate these successes across the wider economy. The main reason for this is that the vast majority of employers and their political allies are opposed to the very idea of a “living wage” as it is in essence a demand that the present wage system which is predicated on supply and demand or the skill level or the productivity of workers be replaced with one based on the provision of the basic economic needs of workers and their families in their communities. The spread of the “living wage” would ultimately undermine the neo-liberal economic policies that have been in place for the last three decades and undermine the ability of the corporate sector to dominate contemporary society.

So what is really needed to improve the living standards of low paid workers in New Zealand? The answer is very simple, the election of a government that will reverse the neo-liberal economic policies of the last three decades. This is not to say that the living wage movement is pointless and politically irrelevant in the present political and economic context. It is performing a very important function in keeping the issues of inequality and poverty in the political spotlight which in turn makes it more and more difficult for politicians to keep avoiding these issues. It may also be able to turn itself into a political movement that could form the basis of a new left-wing political party in the future. It may not be much but it is better than silence and complete acquiescence to the present economic regime that at present dominates contemporary New Zealand society.


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