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Living Wage - higher costs, less diversity, job losses?

We've been looking into the claims by Auckland Council politicians relating to promises of a 'living wage' for Auckland Council employees.

An Auckland Council internal report obtained by the Taxpayers’ Union raises questions about the potential for job losses and casts the $3.75m price-tag for the policy into doubt. 

The Council’s report explains that the living wage is ‘not an effective, general tool for alleviating poverty’ and that ‘large proportions of minimum wage workers do not live in poor households.’

When you put aside the political rhetoric, the economic impact of the living wage policy will be disastrous for low-skilled Council workers, diversity and ratepayers according the Council’s own analysis.

If the Council’s aim is to reduce poverty, the report suggests that living wages for Council employees is not the way to do it.  According to the report, workers aged 15 - 24, women and ethnic minorities are over-represented in the category of people not earning more than $18.40 per hour. Artificially inflating Council wages may see less of these groups gaining future employment with the Council as competition for these positions increase.

In addition to increased competition for Council positions, the report indicates the potential for job losses and shows that workers may see overtime slashed.

The living wage policy will not only burden Aucklanders with higher rates, it also threatens Council workers with the prospect of job losses.  The true cost of the living wage policy may be much higher than the $3.75m quoted in the media.  For example, the Council’s analysis only considers workers within a 10% wage differential.  It has not factored in the potential for a domino effect of wage increases emanating from the introduction of the living wage.

We've uploaded the full report here.

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Are councils fibbing under freedom of information laws?

It appears that the councils of two of our largest cities do not take freedom of information laws seriously. As a constitutional lawyer and advocate for government transparency, I am deeply saddened.

Cost of Wellington City Council’s website - $317,726 or $1.7million? Depends who’s asking…

Last week the Taxpayers’ Union criticised Marlborough City Council for spending $410,000 on web design and development. We made a feature of it on our website and our analysis was even covered in the local paper. We thought the amount was outrageous – ‘$100,000 more than Wellington City’s award winning website’.

We were wrong. Though the Wellington City Council told us it had spent $317,726, it had told someone else it had spent $1.7million on the same wellington.govt.nz site. Though we’ve written (and spoken) to the Council’s CEO, the inconsistency has not been explained. We’ve posted the two information request responses, as well as the ‘please explain’ letter here.

But it gets worse.

We asked Auckland Council about a mayoral trip to China – officials suggested the trip never happened

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Taxpayers' Union offers prize to Aucklander with largest percentage rates increase

The Taxpayers’ Union this afternoon announced that it is offering a lawn mower to the householder who can provide evidence of the highest Auckland Council percentage increase in rates and user-charges.

We understand that some Auckland residents have suffered cumulative rate increases of over 30 per cent in the last few years.  At the same time the Auckland Council is reducing services such as berm mowing.

We are worried that while Len Brown is hiding behind the ‘average’ figure of 2.5 per cent, this is merely an attempt to disguise just how much extra some Auckland households are paying.  It ignores, for example, increased user charges.

The proposed rate increase is almost double the rate of inflation.  Aucklanders should be expecting more, not less, services from their Council.

Click here to read the full press release.

Click 'continue reading' for the competition terms.

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