Rising cost of living leaves lower paid workers on shaky ground
Thursday, 27 January 2022
Inflation has risen to 5.9 per cent, leaving cost of living the highest it has been since June 1990.
This is putting extra pressure on households who are finding necessities such as food, housing and electricity are becoming more expensive.
Cleaner Kura Leka said she was experiencing the effects of rising prices.
Leka earned the living wage of $22.75, and said if she was still earning the minimum wage, she would not be able to buy food for her family.
**READ MORE:
* Tony Alexander surveys households for tips on how to fight inflation
* Call for $22.75 minimum wage to reward essential workers
* Lockdowns costing $240m a week, ASB estimates
**
“If I was not earning the living wage I would not be able to live. If prices for just the basic things are going up and up, why not our wages to match? It is unfair for a working New Zealander who pays taxes to be in this position,” Leka said.
Even earning the minimum wage it was a struggle to make ends meet, she said.
She picks up extra shifts at work to bring extra money to the table. On Thursday she had travelled to Waiheke island from her home in Papakura to cover another cleaner’s shift.
Leka has seven children and lives in a household of 10 people. For her the rising cost of necessities such as food, petrol and rent were hitting hard.
“When we do our weekly shop for 10 it ends up around $500. Only last year, buying the same things it was $250 to $300. It is absolutely shocking that it costs this much to buy food. But prices are up on all the basics,” Leka said.
Kiwibank chief economist Jarrod Kerr said the issues facing New Zealand consumers were manyfold.
In late 2021 the price of energy surged, the price of petrol and food continued its upward trend, housing related inflation remained strong, and supply chain disruption added extra costs to most imported goods, Kerr said.
“We’re copping it from all angles,” Kerr said.
Richard Wagstaff, president of the Council of Trade Unions (CTU) said the rising cost of living compounded an existing problem for the country’s “working poor”.
A CTU survey of more than 1500 union and non-union workers revealed 65 per cent said they did not have the financial resources to manage a three-month period of unemployment.
With the cost of living rising, workers living paycheque to paycheque were put under even greater strain, he said.
“We know there is a lot of working poor in New Zealand. We know people are struggling with the cost of living. While there has been some wage movement, it is not enough to keep up with the rising cost of living,” he said.
Some industries would be hit harder than others by the rising inflation, he said.
“Industries where workers have had to fight for fair pay agreements, like security, like cleaning, like hotel workers, hospital workers and bus drivers. We know that these people have lower wages and will have less to come and go on in a situation like this,” he said.
Many of the workers on lower wages had been classed as “essential workers” during the pandemic, he said.
Sam Garaway, chief executive of Christians Against Poverty (CAP) said the budgeting service charity was watching rising costs with some concern.
“Many of our clients are struggling to pay for essential items even before the recent rise in inflation, which is now biting an even bigger chunk out of their budgets,” he said.
The CAP budget had been updated in March last year, but since that time it had had to allocate a further $20 a person to food costs, due to rising prices, Garaway said.
December and January were usually quiet. But this year there had been an increase in people seeking budgeting help over the holidays.
He is also expecting more people to ask for help with debt.
As for Leka, she wanted the Government to take action to lower the cost of essential items, such as food, so people in lower waged jobs did not have to worry about affording their next supermarket shop.
“I earn above the minimum wage, and I am lucky to be just surviving,” she said.