One third of Kiwis are the working poor

First published by The New Zealand Herald.

Statistics from the government’s Wellbeing survey, carried out last year and released in June, show that 33 per cent of those surveyed say their income is ‘not enough’ or ‘only just enough’ to meet their everyday needs.

“This is not financial wellbeing, this is financial struggle,” says CTU president, Richard Wagstaff of Stats NZ’s findings. “The facts are clear; working Kiwis need to be paid more to make ends meet.

“All working Kiwis should be paid a wage they can live on, a wage that allows them to look after their family, participate in the community and thrive on.”

Wagstaff says fair pay agreements are desperately needed to lift the wages of some of those on the lowest incomes.

“The government must act to introduce fair pay agreements if it wants to truly make a difference in people’s financial wellbeing.”

One area of concern for Wagstaff is competitive tendering documents that specify what companies should supply, such as in public transport contracts, but leave people’s wages outside of contractural requirements.

Wagstaff worries that many companies tendering for contracts will face many of the same fixed costs; but could put in a lower tender by paying their staff less.

“Competitive tendering doesn’t help as many things are specified in a tender but not people’s wages – it’s a recipe for lowering wages,” he says. “Standardised fair pay agreements would help fix this, the tender framework that’s used encourages low cost wages.”

But pay is just a part of the picture, says Wagstaff, who would like to see pay increased with people’s increased productivity and have staff more involved in their employer’s decision making.

“I’m not saying staff should be consulted on every little thing a company wants to do; but a more inclusive way of working can work well. People need to feel valued and be respected.”

More focus on health and mental wellbeing should also play a part in the workplace too, he says.

“The workplace should be a good place to find support.”

He also says hours of work matter; whether people wanting to work are under-employed waiting for their phone to ring, while at the other end of the scale there are those working too many hours.

According to the Stats NZ Well-being survey the more hours people work the less satisfied they are with their work-life balance. A quarter of the people it surveyed said they worked too many hours.

One in five employees (22 per cent) said they always or often felt stress from work, and 15 per cent reported being too tired from work to enjoy their free time. Those with flexible work times are happier than those who don’t have that option.

The survey also found that the more vulnerable people felt at work the less happier they were. Of those employees who felt they had a chance of losing their job for a reason beyond their control, 13 per cent were dissatisfied with their job, compared with only 2.5 per cent of those who felt there was almost no chance of losing their job.

Meanwhile, the government is still mulling over the Fair Pay Agreement report that was handed in back in December 2018.

Wagstaff was a member of the Independent Fair Pay Agreements Working Group which produced the report. It found that New Zealanders work longer hours and produce less per hour than in people working in most other OECD countries.

It also says wages in New Zealand have grown, but much more slowly for workers on lower incomes than those on high wages; and they have grown more slowly than labour productivity.

The main recommendation of the report was the introduction of compulsory occupational level collective bargaining; something that wasn’t wholly supported by representatives of employers involved in the report; who preferred a voluntary system.

A report by business and economic research firm Berl shows that a return to a modern form of sector bargaining “will significantly improve the wellbeing of working New Zealanders while maintaining economic growth”.

“It is a call-to-action for New Zealand and the New Zealand Government to make better working lives possible for all Kiwis,” says the report’s author who also claims New Zealand’s abandonment of sector bargaining in the 1990s is linked to a decline in real wage growth.

“Fair pay needs government support,” says Wagstaff. “We have talked to business but they are not keen on regulation. We are hoping for a good result (from government), but there’s no telling when any decision will come.

“There is no economic rationale for the current individualised bargaining framework. However, there is a strong social wellbeing rationale for sector bargaining.”