'Living from pay cheque to pay cheque despite having a professional career - this isn't right'

Sunday, 5 January 2020

Wairarapa woman Jo Waitoa-Hall says her income has kept up with increases in the cost of living over the past year - 'due to particular circumstances, though, as opposed to as a matter of course'.

All Department of Conservation staff had a 2 per cent pay increase in 2019, and will get the same this year. Union members also received an extra $1200 last year.

'I can't say definitively but the atmosphere for unions seems much more favourable recently with more workers getting increases than in the past.'

But she is not convinced everyone is getting ahead. 'I think generally the cost of living, particularly housing costs, are just going too fast for people to keep up. Particularly low wage-earners in the private sector. Circumstances seem quite favourable at the moment for public sector employees with a range of departments going through collective bargaining recently.'

* It's getting harder to be poor, and easier to be rich

* Women's stories of pay discrimination highlight call for pay transparency**

A new survey by the Council of Trade Unions (CTU) shows that most still feel they are worse off by the year.

The Together 2020 survey showed that 56 per cent of respondents felt their incomes had fallen behind compared to the cost of living in 2019. Just under 30 per cent said both had risen at an equal rate. Twelve per cent said they were better off last year than the year before.

That is a better result than in 2019, when 69 per cent said their incomes lagged the cost of living and only 6 per cent felt any better off.

But almost 60 per cent said they did not think they were paid fairly.

FIGURE.NZ

Median hourly wages for professionals in New Zealand.

The survey was completed by nearly 900 union and non-union employed people.

CTU president Richard Wagstaff said the results reflected changes in policy and economic settings. 'The more positive income and employment statistics of 2019 are translating into people feeling better off than they did a year ago, but right now it seems too many working people are still doing it tough, struggling to make ends meet and feeling undervalued at work.

'The Government's reinstatement of work rights that had been eroded by their predecessors has certainly contributed to giving people the ability to get a better deal at work. However, this is a fragile gain that needs to be locked in and strengthened through the introduction of Fair Pay Agreements.

'The status quo of individual and single employer bargaining just isn't capable of delivering fair outcomes. I think you can see that in the fact that there are still many people who feel like they are falling behind and in the areas of work that haven't improved such as job security and workload,' he said.

One respondent said: 'I am living from pay cheque to pay cheque despite having a full time professional career, spending nothing on luxuries - this isn't right'

Another offered: 'Wages don't keep up with the cost of living for those on low incomes. It seems to be worse for women on low wages.'

Others said increases to the minimum wage - it will rise to $18.90 in April - were still not enough to keep up with the growing cost of housing. One told the survey too much money was going to landlords.

'As with last year, the most commonly reported cost of living issues concern the cost of basics, particularly housing. The impact of the increased cost of renting has come through particularly strongly in comments this year,' Wagstaff said.

Economist Brad Olsen, from Infometrics, said living costs were likely to set the tone for the election this year.

'We are expecting wage growth to continue at a higher pace than previous years in 2020, with labour cost inflation growing at 2.4 per cent per annum.

'The labour market remains tight, with firms needing to increase pay options to attract and retain staff. However, softer employment indicators recently, including slower job growth in October 2019, means that there's not as much continued heat in wage growth in future years.

'With housing costs continuing to grow, and rents rising at pace too, families are having to navigate higher living costs across New Zealand. It's concerning to see the large proportion of people who feel that their incomes have kept pace or are growing slower than living costs are so high. Although the proportion of respondents who feel their incomes have not kept pace with living costs were higher in 2019, the fact that 56 per cent of respondents still don't feel that their incomes are keeping pace with costs shows that costs remain for families.'

Cameron Bagrie, of Bagrie Economics, said the 'ingredients were there' for wage growth in most sectors in 2020.

'Unemployment is low, finding skilled labour is a huge problem for businesses, there is a sense of wage catch-up being baked into some sectors' expectations and the policy agenda is redistribution-focused.

'Rising wages is a good thing, provided we are getting good productivity growth as well. We aren't, so at some stage firms will hit the pause button on employing people. There are some signs of that occurring already.'