Fruit pickers’ commute a day’s pay
Soaring petrol prices add to struggles of workers on low wages, say advocates
Lower-income workers are spending an entire day’s pay on their weekly commuting costs, a union says.
The soaring cost of living, including petrol, was highlighted as part of a push to get the Government to boost support for poorer households in this month’s Budget.
Fairer Futures, which represents 38 organisations including charities, anti-poverty groups and unions, yesterday released a checklist of seven changes it is seeking. Among them is lifting the minimum wage ($21.20) to the living wage ($22.75).
First Union research and policy analyst Edward Miller said the case for a living wage was strong given food and fuel price rises in the past year were well above wage inflation.
“Petrol rose $1 [a litre] in just 12 months,” he said. “I was speaking to kiwifruit workers, they said covering the cost of getting to work for a week already swallowed a day’s wages.”
Government officials previously estimated the cost to employers of lifting the minimum wage to a living wage at $1.3 billion, or $930 million after the April 1 increase.
“However, given so many employers have increased wages recently it would likely be significantly lower,” Miller said.
The Fairer Futures group also wants core benefits lifted, sanctions removed and welfare individualised — rather than penalising beneficiaries who get into a relationship.
A report in March showed that even after increases in April, benefits needed to be raised by up to $165 a week for some households just to cover basic costs, or $300 to meet the total costs of participating in society.
“While some families are feeling the pinch, others are barely clinging on,” said Glenis Philip-Barbara, Assistant Māori Commissioner for Children.
“Mokopuna we have spoken to say they just want enough to cover the basics, and a little bit more.”
Fairer Futures wanted all debt to the Ministry of Social Development — estimated at around $1.9b — to be wiped. The Herald previously reported that much of this debt was owed by families who were overpaid in tax credits after they failed to tell MSD their family circumstances had changed. Those Working for Families overpayments were then treated as debt and interest was often charged.
Marcela Mingoti, finance manager at Nga Tangata Microfinance, said an analysis of their clients last year found their average income was $36,000, debt was $13,000 and they owed an average of $3064 to MSD.
She shared the budget of one of her typical clients, Mary*, a single mother with three children.
“Despite being entitled to Working for Families credit, Support Living Payment and Child Disability Allowance, her fortnightly gross income is only a little over $760.
“After the advances payments are deducted . . . she is left with $574 to support her family . . . for two weeks.
“I wonder how Mary would be able to feed and house her family without getting trapped in a loan to cover her basic needs,” said Mingoti.
“She will not. That’s why she came to us — she had a high-interest debt that wasn’t being addressed and was incurring extra charges.”
Mingoti said some clients paid a “symbolic” amount of $1 or $2 a week towards their government debts, meaning it would take between 58 and 116 years to pay them off. “Realistically, this debt is uncollectable.”
Prime Minister Jacinda Ardern acknowledged last month that increases to benefits and other support in April did not go far enough.
*Name changed for privacy.