The living wage

Katie Chapman at Stuff reports:

Kiwis need to earn nearly $5 more than the minimum wage to meet the “basic necessities of life”, a new report has found.

Bzzt Wrong. Not the story – just the report.

The wage was calculated as the necessary income for a two-adult, two-child family and is based on both adults working, one full-time and one part-time.

This is not the majority of households or the majority of adult New Zealanders. Most workers either do not have children, or their children are adults.

It is silly and wrong to say you need to earn $18.40 an hour to meet the “basic necessities of life”, even if you accept the calculations of Rev Waldegrave as gospel. This is what has been calculated as necessary to support a four person family.

Now the report (which does not appear to be online, which means it is hard to check how robust it is) seems to ignore the existence of Working for Families which can pay up to $217 a week net.

Now there is an argument to be made that you should have wages at a level where people can have a family and not need Working for Families. That is a legitimate argument.

However I bet you that not a single proponent of the living wage campaign is saying that wages should be higher so the Government can scrap Working for Families. They want both.

And the reality is that economically it is daft to have a minimum wage based on the needs of 850,000 adults yet applying to all three million workers. Targeted assistance to those with children is more efficient and fairer than a one size fits all type living or minimum wage based on one particular family structure.

I would hope that most adults who are raising kids are in a job that pays $18.40 or more an hour. There are many jobs that pay that rate. But to advocate that every job in the economy should be at that rate is again daft and would kill off many jobs. A 16 year old living at home does not need $18.40 an hour to survive.  A couple with no kids doesn’t need that much. The partner of someone who is earning say $25 an hour doesn’t need $18.40 an hour. Individual circumstances vary greatly, and a campaign based on what is a minority living situation is no template for anything.