Extending living wage pricey

‘‘. . . a high percentage of the employees earning less than the living wage are trainees or apprentices.’’ CCHL report

The Christchurch City Council’s commercial arm does not recommend extending a living wage to employees of council-controlled trading organisations.

City councillors last week approved paying all directly employed staff at least $20.20 from late-October, which was expected to cost about $775,000 a year and benefit about 470 staff.

The increase excludes Vbase employees and employees of other council-controlled trading organisations (CCTOs), but councillors requested a report on how the wage could extend to those organisations. To be an accredited living wage employer, an organisation has to pay the voluntary wage rate wage to all directly and indirectly employed staff take non by contractors. According to a council report, Christchurch City Holdings Limited (CCHL) would not recommend applying the living wage to CCTOs.

CCHL came to the conclusion ‘‘in view of the complexities which would be created in the commercial relationships and the impact on competitiveness for CCHL subsidiaries’’.

If the living wage was applied to CCHL companies competing in the marketplace, the companies would be ‘‘uncompetitive’’.

Returns from the companies would also be affected ‘‘so long as the competitors are not obliged to use the same wage regime’’.

‘‘Several of the companies have noted that a high percentage of the employees earning less than the living wage are trainees or apprentices.’’

A previous CCHL report, from 2014, also recommended against adopting the voluntary living wage rate. At the time, it was found the living wage would cost the CCHL group $7.2 million in extra costs, ‘‘including maintaining relativity and the cost of requiring subcontractors to adopt the living wage’’.

The report on how to extend the living wage, requested by councillors last week, was due back within the next three months. It would also show how much extending the living wage would cost each organisation.

City council head of human resources Emma Davis said Vbase employed 700 staff and most were casual workers.

There had been no analysis of what it would cost to extend the living wage to Vbase staff.

The council did not have information on the number of people employed by City Care, Davis said.

Just two councillors – David East and Jamie Gough – voted against the council adopting the living wage last week.

Gough said there was ‘‘no possible way that we can make such a radical change’’ without consultation.