Community trust told: don't pay the living wage, it's not good PR
Saturday, 14 September 2019
A community-owned licensing trust decided not to pay the 'living wage' to the 69 per cent of its staff who fell below that benchmark in part because they believed it wouldn't help their image.
West Auckland Licensing Trusts, who have a regional monopoly on pubs and liquor stores, voted against a living wage in 2017, and at the time said publicly it was due to the significant cost of implementation.
But a board paper seen by Stuff - and branded 'incredible' by a living wage campaigner - raises more controversial arguments against the wage. These include that it 'may not necessarily be positively received by a majority of our customers … some will perceive this as 'feathering one's own nest'.'
The paper, which appears to date from 2017, said some customers already saw the Trusts as 'fat cats'. And it said any perception from customers they were paying more for booze to fund higher wages wouldn't help 'favourability' towards the Trusts.
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The paper also noted its own research, commissioned from pollsters UMR, which concluded 'public opinion on personal benefit versus wider community benefit is very clear'. The Trusts regularly run community giveaways, such as first aid kits and fire extinguishers.
The paper also quoted studies by HR companies, the Treasury and a psychologist to build a case against the wage, saying: 'There are more effective and better ways to target poverty in a community'.
It said better pay didn't necessarily improve staff morale or work ethic. And it suggested low-paid staff didn't need the living wage because they were either close to retirement, students, or had a better-earning partner.
The living wage is an independently-calculated minimum income to maintain the basics of everyday life, and in 2019 was set at $21.15 an hour.
Nick Smale, a campaigner to reform the Trusts, said the paper left him 'gobsmacked'.
Smale said it showed the Trusts were more interested in their own image than in making a responsible decision and gave away things as a cynical reputation-booster. 'They're saying 'we do things to make us popular, not because they are the right thing to do'.'
Annie Newman, convener for the Living Wage Campaign, described the report as 'quite incredible'.
'It is extraordinary the lengths to which the Trusts will go to justify poverty wages, drawing on old biased reports, and arguments that low waged workers don't want money and don't need money,' she said.
'It is interesting that they understand there is a perception that they are seen as 'fat cats … feathering their own nests' and to pay workers a decent wage would feed that perception. I hardly think the customer/drinker in the bar would think the bartender was the fat cat.'
The chairs of the two trusts, Portage and Waitakere, earn about $36,000 a year, while the board of their shared company, WATS, collects $412,253 between nine directors.
In an email, Wickham claimed the paper dated from 2014 and so is 'very out of date'. However, it quotes the living wage for 2017 and also refers to an article published March 2017.
He didn't address a question about whether he was the author. 'This is an important and constantly evolving topic and there are likely to be continued discussions on this at The Trusts.'
In response to questions about the comments about 'favourability', Wickham said their research and analysis focused on 'customer favourability, not general public perception. Maintaining customer favourability is one of our key strategic drivers and we know from our independent market research that price increases would not be viewed favourably by our shoppers. We operate in a price sensitive market.'
The paper said 69 per cent of staff (or 240 out of 350) earned below the 2017 living wage of $20.20 an hour. In a breakdown of employees by age group, it commented that some were close to retirement, some were students, and some likely to be the secondary income earners in their family. Because 80 per cent were under 30 and many were part-time, they didn't fit the target profile for the living wage. 'Not all that earn $20.20/hour or less at The Trusts have the same needs with respect to outgoings or the same desires with respect to discretionary spending power.'
Smale argued that was the Trust 'belittling' their own staff.
Wickham said the Trusts' policy was to pay all staff above minimum wage; salaries were benchmarked and came with benefits including health and life insurance and long service and domestic violence leave.
He said staff were well treated, fairly paid, and there was no tolerance for worker exploitation (a significant issue in the liquor industry). 'We value our people greatly, they are essential to our success as a business, and we work hard to demonstrate that above and beyond hourly wage rates alone,' he said.
REDACTED!
Smale, who wants a referendum on ending the monopoly and is standing for election to the Trusts board in next month's election, received the paper under freedom of information laws.
But the Trusts attempted to hide the most controversial opinions in the paper, intending to redact them before releasing it. When they realised attempts to black out key sections had failed, they issued a second copy to Smale, instructing him to destroy the originals, or seek legal advice if he would not.
Smale believed the Trusts had no legal grounds to withhold the information, and has appealed to the Ombudsman - but gave them to Stuff anyway because he wanted the information made public before forthcoming Licensing Trust elections.
'I was (and still am) in absolutely no doubt that the information is of interest to the public,' Smale said. 'I am also in no doubt that the information does not impact the privacy of any individuals nor is it commercially sensitive. Perhaps unfortunately for The Trusts, 'embarrassing' isn't grounds for withholding information under LGOIMA.'
Wickham said the Trusts felt they had 'legitimate grounds' under the LGOIMA for the redactions.