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Retailers Should Pay a Living Wage

Retailers are, in my experience, caring and community-minded employers, and I expect that very few of them are not paying their staff a reasonable wage.

The way employers treat their staff will always be reflected in the way these staff treat customers – so it pays to do the right thing and reward good staff with good pay.

There is a modern-day obsession with lowest pricing amongst many retailers – and the desire to compete on price has spawned a discount shopping mentality amongst NZ consumers that is a hard addiction to break. The flip-side of low prices is low wages – and we need to think about a re-balance of this equation if we want a more fair and equal society.

The minimum wage (currently $15-75 an hour) needs to be raised so that a two adult, two child household with 1.5 full-time wage earners can achieve a decent standard of living. The Living Wage Movement ( advocates that for the good of their community, responsible employers should not pay their adult staff an hourly rate that is lower than the living wage – currently calculated to be $20-20 an hour.

So far – only a small number of employers have signed up to the Living Wage and these include the Wellington Regional Council which is now considering extending this to all of their contractor’s staff.

Right-leaning business groups will claim that jobs will be lost if employers have to pay staff more than the current minimum – but this is not proven. Even in retail, where a large number of staff are minimum wage earners, the increase in wage costs is small enough to be manageable.

I’ve done the maths - and without getting into the complex sums – a retailer with (say) half of their wages bill currently based on less than $20-20 an hour, would only have to increase their sales by 3% to cover the increase. Now I bet if the employer went to their low waged staff and asked if they could find ways to increase sales by 3% so that they could all earn a living wage – they would come up with some great initiatives.

In simple terms if the whole retail sector could increase all prices by 3% - the living wage could be paid as a new minimum. The lowest-paid would receive a 28% pay increase – so they would be more than happy with the slightly higher cost of living. This would make retailing a more attractive (and better) place to work and would surely be good for the economy by reducing social costs caused by poverty and low wages.

The extent of this issue is larger than you might think – a Treasury study in 2013 showed that that was below the Living Wage. In 25% of all NZ households with 2 adults and dependents, the principal income earner is on less than the Living Wage.

I, for one, would support a 3% retail price increase on my groceries, medicines, appliances and clothes so that New Zealand retailers could lead the way in paying a fair living wage to all employees. How about you?


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