Let’s work this year on making minimum wage liveable and watch as poverty levels fall, writes Julie Fairey.Low-wage jobs often help create significant value but the attendant pay cheque is barely enough to live off.

My wish for 2013 is that we make significant progress towards better pay rates for New Zealanders, particularly for those struggling on low wages. We do have real poverty in our country; a country which in theory has enough for everyone to share and live well.

A living wage is one way to improve pay rates and lessen poverty. The idea is that a minimum hourly rate is calculated at a level that allows a person to have the basic necessities of life, live with dignity and participate in society. Then organisations who wish to can sign up to the living wage, pledging to pay at least that level to everyone they employ, and to insist on the same from contractors. Such a concept has been embraced in many places in the UK and USA and is starting to generate interest in New Zealand too, as a means of furthering social justice and alleviating poverty.

Child poverty made the headlines many times in 2012, and rightly so. Children who are living in poverty are not doing so alone; their parents, and often other members of their families, are living in poverty too. While some are reliant on a welfare system which provides at most a subsistence level existence, many children in poverty have at least one parent in full time employment.

These children are in poverty because wages are too low.

Many column inches have been dedicated in this very newspaper to the high cost of housing in Auckland, both home-ownership and renting. It would be a lot easier for many to afford to live in our city if their pay went up.

Research on the adoption of the living wage concept in cities in the UK shows when you increase the wages of the lowest paid much of that extra money is then spent in the local economy. In contrast increasing the pay of the already wealthy sees them save it, which has some broader value, but doesn’t lift many people directly out of poverty.

Many of the low wage jobs in our economy are vitally necessary. Cleaners enable us to work and play together in large numbers, in factories, office-buildings and shopping malls, without constant illnesses and high child mortality rates. Laundry workers make large hotels that host high-end tourists viable. Those who work caring for children, the elderly and those with disabilities are giving dignity to the vulnerable and enabling their family members to pursue other activities such as their own careers.

Low wage jobs are often not of low worth at all, and unfortunately low wages are unliveable wages for many. Supporting a living wage means rejecting the notion that some people perform work that is worth so little to our society that they don’t deserve enough to live off.

It is astonishing to see people who will buy free-range produce for their families, commit their organisation to purchasing fair trade goods, and agree that good urban design principles should be adhered to in city planning, balk at the idea of a living wage. The price of animal welfare, the rights of workers overseas, and the physical appearance of our city is of little moment. Fair pay for our own neighbours should be an ethical principle we support without quibble.

Some erroneously label a living wage a “handout”. Handouts are understood in this discussion to be a bad idea; they encourage dependence on the institution doing the handing out. However, that response shows a fundamental misunderstanding of the labour market; each person is supposed to be paid fairly for the work that they do. That is sadly far from the truth and calculating and mandating a living wage seeks to re-balance that. Currently it is the low-paid workers who are effectively (and unwillingly) giving a handout to their employers, by giving their labour at less than it costs the worker to provide it.

How is it that our economy has got to a point where it relies on the underpayment of thousands of people, every day, to function? How can it be that any person’s labour, their skills, knowledge and expertise, are worth less than it costs for that person to function in our society?

Until we are paying liveable wages we will continue to insist that many of the poorest in our society, the lowest paid workers, subsidise our economy. That is unfair and unethical. Let’s move towards a living wage in 2013.

Julie Fairey, Member of the Puketapapa Local Board

First published in the NZ Herald on 18 January 2013