The proposal to remove the living wage requirement from public sector procurement rules turns back the clock on a progressive step towards valuing essential workers, argues Lyndy McIntyre.
On April 1, workers on the minimum wage will get their annual pay rise, with their hourly rate moving from $23.15 to $23.50. That’s a 1.5% increase, 35 cents an hour. What does 35 cents buy in a cost of living crisis? Try a fifth of a litre of milk from Pak’nSave or a quarter of a loaf of the cheapest sliced bread.
The New Zealand living wage will be updated on the same day. The current living wage is $27.80 – $4.65 more than the current minimum. The living wage rate will increase by the average movement in wages.
While the minimum wage is a poverty rate, the living wage is a modest but decent rate, enabling workers and their families to live in dignity and participate in society. For our lowest-paid workers, this is life changing.
One of these workers, Mele Peaua, arrived in Aotearoa around 40 years ago. The 17-year-old came from Tonga looking for a better life, “like a dream”. But the reality of low pay and high living costs forced Mele to work three jobs: sewing during the day, working in an old people’s home at night and cleaning at weekends.
Over the years Mele kept working around the clock in minimum wage jobs. She and her husband, also a cleaner, had children. Mele says it was hard. “We didn’t have family time. I never went for school interviews with the kids. There was never enough money for sports and school trips. It’s just the limit of our life, how much we earn to survive and to feed our kids.”
But today Mele, and others employed via contractors to clean or provide security or catering in the core public service, are paid the living wage.
Since it was launched in 2012, a key goal of the Living Wage Movement has been to lift the wages of contracted workers. Contracting has always been a race to the bottom, where tenders are won on the basis of the lowest wage rates. The organisations that united around the goal of ending poverty pay set out to expose the injustice of low wages for workers like the parliamentary cleaners who worked all night; workers like Jaine Ikurere who, after cleaning the prime minister’s office for 20 years, was still on the minimum wage.
The Living Wage Movement mobilised the broader community – unions, faith groups and community organisations – to secure commitments from politicians to lift the pay of the government’s contracted workforce. And that people power won, initially achieving the living wage for parliament’s own cleaners, catering workers and security guards in 2017, then for Ministry of Social Development security guards in 2020, and over time for more groups of contracted workers in the public sector.
In the last term of government, procurement rules for the core public sector were changed to reflect what was increasingly the norm, by including the requirement that the living wage be paid to contracted cleaners, security and catering workers.
Now the government wants to change these rules and take the living wage away from workers like Mele. Wearing her “growth” hat, Nicola Willis has proposed an “economic benefit test” that would “require government agencies to consider the wider benefit to New Zealand of awarding contracts to New Zealand firms when making procurement decisions”. The living wage requirement has been removed from the proposed rules. “This is part of the plan to increase jobs and incomes by shifting New Zealand to a faster growth track,” said Willis when announcing the proposal.
But this change would not increase jobs. It would take workers’ wages backwards. It’s a cynical move to push the cost of doing business onto our lowest-paid workers, and turn back the clock on a progressive step towards valuing essential workers, who work hard for New Zealanders every day. And it comes at a time when nearly $15 billion for tax cuts has favoured the few, including a $2.9 billion tax break for landlords, when food banks are forced to turn people away, homelessness is rising, and rents are sky high. This attack on the working poor will drive more New Zealanders into poverty.
E tū national secretary Rachel Mackintosh described the move as “disgusting and abhorrent”, saying: “If you’re on less than the living wage, people are having to trade off between food, power, petrol and rent. You cannot meet all those expenses if you’re not on a living wage.”
The fight’s on to save the living wage for contracted workers in the public service. Submissions to the Ministry of Business, Innovation and Employment are open and we can let MBIE know this is not fair, it’s not right. That it’s mean-minded and must be stopped. That New Zealanders want our government to set an example, to lead the way for other employers; that we don’t want contracting to be a race to the bottom, but a fair way to employ the invisible workforce of cleaners like Mele. That we want to keep the living wage in government’s procurement rules. That you can’t go backwards for growth.