Auckland Mayor proposes $18.40 an hour minimum wage for council staff; cost expected to be $3.75 mln a year

Auckland Mayor proposes $18.40 an hour minimum wage for council staff; cost expected to be $3.75 mln a year

Auckland Mayor Len Brown is proposing introduction of a "living wage" of $18.40 an hour for Auckland Council staff  at an expected cost of $3.75 million a year.

Brown said the policy would be paid for through savings in other parts of the council and phased in over three years, starting at $1.25 million for 2014-15. The cost savings would not impact on frontline delivery of services.

Nationally the current minimum wage is $13.75 an hour.

"Getting by on the minimum wage is very difficult in Auckland," Brown said.

"While I would prefer this was an issue addressed by central government through adjustments to the minimum wage, I am supportive of moves to pay our frontline staff a reasonable wage, provided it doesn’t impact on ratepayers."

Brown's also going to ask the council to investigate options for a living wage for staff of contracted organisations, and will propose a new "higher pay policy"’ to ensure greater transparency and accountability for higher salaries across the council and council-controlled organisations.

"The daily life of our city relies a great deal on people who work for low wages, whether it’s people staffing our recycling centres, our libraries or working in frontline customer service roles," Brown said.

"It’s only fair that these people are able to enjoy a decent standard of living."

He said he also wanted to be "assured" the council was "taking a balanced and consistent approach to pay at the higher end".

Brown was recently forced to defend the council's payment of nearly $800,000 a year for two senior council executives, council chief executive Doug McKay and Watercare CEO Mark Ford.

"Adopting a council-wide remuneration policy will ensure that all of the organisations working under the council umbrella pay their senior staff in a consistent and appropriate way, and that they are more directly accountable to the council for their decisions," Brown said.

"I’m clear that we need to attract and retain the technical specialists and leading minds who will help build Auckland into the world’s most liveable city, but that needs to be balanced with a sensible and prudent approach to pay across the board."

For the 2013/14 year Brown received a 1.5% salary rise to $251,010, while his deputy Penny Hulse sees her pay go up 13.8% to $141,337.  Committee chairs of the whole council got a 17.5 % rise to $116,762, and councillors pay increased 9.6% to $98,672.

Brown said the living wage would apply to both council and council-controlled organisation staff and was based on benchmark data by the Family Centre Social Policy Research Unit.

The living wage plan is part of Brown's  proposed 2014-15 budget being be tabled at the council’s Governing Body meeting today.

The Labour party's associate labour spokesperson Darien Fenton said Brown's commitment to a living wage would be "welcomed by low wage workers up and down the country".

"The commitment of Mayor Len Brown and many councillors to implement a living wage keeps pace with Conservative mayors like Boris Johnston in the UK. Even the Conservative Party has a growing group (Tories for the Living Wage) now calling on David Cameron to support a living wage.

"That’s because paying a living wage makes sense.  It not only improves living standards for workers and their families, but has economic benefits, such as improved productivity and reduced turnover and absenteeism.

"Sadly, while Local Government leads the way, the National Government has its head in the sand. John Key has bent over backwards to discredit the growing living wage movement and Labour’s support for it. 

"Worse still they have presented no alternatives at a time when families are struggling more than ever and inequality is growing in New Zealand.  Forty per cent of the children living in poverty in New Zealand come from working families."

The Auckland Council subsequently put out this statement:

Mayor Len Brown is proposing an average rates increase of 2.5 per cent in 2014, in his draft annual budget presented to Auckland Council today.
 
The Mayor’s 2014-15 budget identifies new savings of $24 million per annum, which will enable the council to meet additional cost pressures while delivering the lower rates increase. The budget also delivers on commitments set out in the council’s long-term plan, including new capital investments of $1.2 billion.
 
“From day one I’ve been determined to deliver lower rates increases by driving expenditure out of the budget,“ Len Brown says. “This approach has enabled the council to reduce the rates burden facing Aucklanders from the 9 per cent inherited from amalgamation to well below 3 per cent, without compromising the services people rely on.
 
“Budgeting is all about continuous improvement, and that is why this term I have set a new ceiling for rate increases at 2.5 per cent. I’m also clear we cannot take our eye off debt levels and will be looking closely at these as part of the review of our long-term plan in 2014. We need to balance the investment required to deliver the city Aucklanders want with responsible financial management.”
 
The Mayor said he would work closely with Penny Webster in her role as Chair of the Finance and Organisational Performance Committee to sharpen the council’s focus on financial management across the council and its CCOs.
 
Cr Penny Webster says: “We have done well to maintain our AA credit rating against the international trend, but now is not the time for complacency. Every dollar we invest in capital projects will continue to need to make economic sense and be backed by a robust business case. The review of our long-term plan next year will be an opportunity to more aggressively manage down our debt levels and this is something I’ll be working closely with the Mayor to deliver.”
Next steps: Thursday 21 November – adoption of the council budget; Thursday 19 December – adoption of full Annual Plan.
 

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Easy to do when you can pull the money from ratepayers by rort.
I wonder how much the rates will be going up in those same years... leaving those same people worse off.

At least on the bright side, it will allow landlords to charge more rent, and have their houses rise in value because of it.   Even moreso if the "living-minimum" wage increase attracts people into Auckland if other businesses match it to retain staff (increases accomdation demand).

Len Browns spinmasters doing an excellent job of front footing 'good' news stories, while the media ignores the mayors bad behaviour & lack of ethics.
Toronto mayor not long to go.   Mayor of Auckland - gone by December? 
Would a govt minister last this long? 

Would a govt minister last this long?
 
Yes, the current one has survived worse. Illegally spying on the neighbours etc etc etc - the list is too long to enumerate.

Isn't it good that some of his people are worth their money... Bet they'll be asking for pay rises too soon :)
 

A big deal.
$18:40 to lie around waiting for the traffic, waiting for a bus, waiting for a train, waiting for a cheap house they can afford, whilst waiting for the Mayor to put his trousers back on.
The Auckland area amalgamation was supposed to put paid to problems, not exacerbate them.
Might as well add in a point about  the young rapists adding to the furore in Auckland,  the shining light of New Zealands biggest blunder.
Sex in the city, NZ style.
Spin that.
We might have a long wait.
.

I pay my employees much more than $13 or $18 per hour.  Because I want to and realistically I don't have a lot of choice in the business I am in.  However I don't have the luxury of simply imposing costs any generous decsion of mine onto my clients.  Any extra I decide to pay would come out of my personal income.
Not so for councils and the other soft funders about who are playing with this idea.  They will simply charge the residents through their compulsory systems.  Lens generosity will be paid  by mimimum wage workers via rents etc.

You assume that rents are already not at the maximum amount. Since rents seem flat increases may not be the case.
The conflict we are going to see in the future over the shrinking pie is going to be interesting. As you say there are those who are in the position to force a growth in a bigger slice of a smaller pie and those that dont, so take far less.
A large concern, IMHO.
regards
 

My untrained casual employees get $15/hr  but they must foot the bill for travel to work, I will see them home due to uncertain finishing hours.

They generally produce about $4/hr worth of work.  And often I have to supervise, even many menial tasks may involve equipment breakdowns or injury if done very wrongly.

I used to be happy to pay higher in a previous venture, but since I couldn't pass on the cost it came from my income.  Then when I had to change things in the business and replace some critical equipment I found I had no reserves, neither business nor personal.  Since it was critical equipment I effectively got the business equivalent of "margin called".  There were not outstanding debts so I wasn't bankrupt.  But I did notice that while the employees were happy to let me take the hit to pay them a few cents more, when the writing was on the wall they weren't in a position to do same for me - which was lucky because it would have allowed me to perpetuate the poor business model.   Now I pay myself first, and when I bail my own business out, or expand it, investors know I've got the reserves if trouble strikes.

Well Done Len !!!
 
What a great way to rehabilitate your image among your core supporters with other peoples money.  I suppose by the time your generous gesture comes round to haunt ratepayers and cause rents to rise for those same core supporters you would have been long gone...it's other peoples problem by then ....

He did say it should be funded from savings elsewhere. Now I am concerned on the affordability of the ever rising rates, especially on those earning the least, yes. So given the greatly rising in-equality then I'd guess that we'll see an ever more progressive tax regime.
regards

I've spent my fair share of time at council.. There’s a lot of fat cats in the council got very well paid for doing BA.. Nice of Len for acknowledge them..

That is such a good decision Len.  Now to actually make it a continuing living wage index it to inflation.

I agree it makes sense. What happens when we have a mix of overall deflation? but inflation in essential items?
Be careful what you wish for...
regards

Gosh it must be nice to be a publicly funded entity with almost no accountability for its spending habits, that simply increases its funding by compulsary means rather than having to actually make and sell stuff like the rest of us. It seemingly affords them the luxury of enacting feel-good social programs like this without a care in the world.

To keep this in perspective, if you inflation adjust $18.40, it is basically the same as the adult minimum wage in 1969.

the problem here is seniority will mean that everyone starts on $18 but those who were already on $18 will now feel they need more and the costs will continue to run!!

I think it will be great for Auckland for all the council employees and elected representatives to get a living wage of $18.40 per hour regardless of their skills or productivity. Should be no problem to get the councillors to vote for that and for the officers to embrace a pay cut from $400,000 per annum to $38,000 .
Dont see why this should cost the ratepayers anything at all given that the average salary now is probably closer to $80,000 than $40,000. Well done Len.
 

Hope Len paid a decent living wage for the extra services he received.

Yep, dosent she get a decent salary off the public position he helped her get?
regards
 

Len, next item is getting rid off your guzzler Commodore Calais and get yourself a Toyota Corolla.  The Lord Mayor of Melbourne drives one so you won't be the only mayor with a Toyota.  Yes we know Len you did ask for a Lexus lh600 while back.

cm - silly comment. Prejudice before thought, methinks.
If you build just one new house in Auckland, and the occupants buy just one fuel-frugal car, you've wiped out the difference you describe - in spades. Always need to keep things in perspective.

My point: council should trim un-necessary costs then they can afford big PR stunt like this.   You know "every drop counts.."  
If it's true I never believe they will absorb the extra cost, they will just raise the rates. Beside, I’d love to know how many people in the council earns less than $18/hr.  Possibly none, it's just a big PR exercise.

If the council did its job of providing housing consents at the rate of demand, then there would be no need to pay a higher wage so that those priced out of the market can still afford to live in Auckland.

 ...$800,000 p.a to run a water business with a bound and captive market.. Thats $384 per hour verse $18.40.   This is just Len's plan to distract use form the real issue..namely CEO greed and hyped salaries.

Dummy Len Brown has not thought this through . This is a zero sum game , because many of these families will currently receive Income support and Working for Families  , which will now be reduced in proportion to their newly increased income .
What its actually doing is moving the burden from Central Government ( Social Welfare)  to Auckland Ratepayers

Weird - centrist conservative government, with a lefty weirdo running Auckland city. National are running the state how a traditional council operated. Sticking to core business and watching costs. Lenny boy on the other hand is continuing with the lollie scramble of the Clark era and politicking left, right and centre with all sorts of bs. Spare me...