Living Wage a feel good, wrong idea

Media statement Wednesday, November 21st, 2013

Living Wage a feel good, wrong idea

A commitment by Auckland Council to pay a Living Wage for low paid staff as a result of debate on the topic this week would open up a Pandora's Box, the Employers and Manufacturers Association says.

"A living wage is simply a creative way to raise minimum wages," said Kim Campbell, EMA's chief executive.

"But its knock on effects would be far reaching, and they are widely misunderstood.

"Though the direct cost of its introduction vary widely, what we do know with certainty is it would be inflationary and have many unintended consequences.

"The tax system would confiscate the benefits for the people it was intended to help as Working For Families payments reduced.

"Other welfare payments such as accommodation allowances would also rapidly disappear as incomes rose.

"Before Council and other non-commercial organisations embrace the idea of paying people more for doing the same amount of work they need to calculate the total cost involved, because moving the lowest paid people up by $5 an hour effectively moves everyone up by $5 an hour.

"We strongly advise the Council to think twice before starting down this slippery slope."

ENDS

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