Bill for living wage estimated at $4.8m
Paying employees of council-controlled organisations (CCOs) and contracted workers the living wage would cost Christchurch $4.8 million a year – the equivalent of a 1 per cent increase in rates, a council staff report says.
The report on extending the living wage was presented to Christchurch City councillors in a publicly excluded meeting in June last year and was kept secret until Thursday.
The council voted in a living wage (currently $21.15 an hour) for direct employees in 2017, but needs to extend the policy to employees of council-controlled organisations (CCOs) and contracted workers – such as cleaners and security guards – to become an accredited living-wage employer.
Incumbent mayor Lianne Dalziel, who this week signed a pledge to support the council getting living-wage accreditation, said she did not agree with the cost estimates in the staff report.
The report warned immediate implementation of the living wage for CCOs and contractors could reduce the council’s dividend and threaten its relationship with Christchurch City Holding Limited’s board.
The $4.8m estimate was ‘‘based on extrapolation of costs following engagement with the larger suppliers’’.
The report said many contractors operated on tight margins and would find it ‘‘difficult to meet the additional living wage costs’’.
Contractors would likely try to make savings by reducing staff numbers, training and development costs or opt out of council contracts.
The council agreed to push for a threeyear phasing in of the living wage for CCOs only. A decision on contractors and Vbase Ltd staff was deferred.
Dalziel said staff had been asked to complete a further report on extending the living wage to council contractors, which
‘‘They’re scared of their own shadow here. Just scared of anything that might offend or upset business. They are working hand over fist to placate business at every turn.’’
would need to be followed up by the next council.
Living Wage Christchurch chairwoman Karena Brown said the organisation was happy for the living wage to be phased in over time by CCOs ‘‘as long as they don’t forget about contracted workers’’.
She disputed the report’s $4.8m estimate, saying continual increases in the minimum wage by the current government meant the extra amount paid by contractors for a living wage would reduce over time.
‘‘I don’t think they have taken that into account.’’
Mayoral candidate John Minto said council bureaucracy had stymied progress on achieving living-wage living-wage employer status over many years and the report was ‘‘scare-mongering’’.
‘‘They’re scared of their own shadow here. Just scared of anything that might offend or upset business. They are working hand over fist to placate business at every turn.’’
Minto said the council did not consider the rates implications when they agreed to give the incoming chief executive a $100,000 pay increase.
Extending the living wage could be cost neutral by adjusting down higher salaries within the organisation, he said.
E Tu¯ organiser Adrian Mealing said some workers on cleaning and security contracts for the council and CCOs were unable to feed their families on hourly wages of $18.05 to $18.50.
‘‘If these contractors are saying they would have to pay the living-wage rate to every employee on every contract fantastic, so they should be,’’ Mealing siad.