Impact of living wage to be studied

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HR professionals calling out for New Zealand research on the living wage debate are to get their wish – Massey University has announced it will undertake a study that looks at the impact and perceptions of introducing a ‘living wage’ in NZ.

As previously reported by HRM Online Auckland Mayor Len Brown has proposed a living wage for the city’s council’s lowest paid workers, which has reignited the debate on the topic.

Professor Jane Parker, who is co-leading the research, said the project aims to provide useful data, not just economic analysis, for organisations deciding how to respond to the issue.

“We want to establish a whole range of indices that might be useful to different parties – whether it’s an employer weighing up the costs of a living wage or a union organisation looking to put forward a case for it,” she said.

“Existing research has tended to focus on the economics of introducing a living wage so we also want to look at it in terms of related benefits like well-being, happiness, quality of life and empowerment. We are trying to take a broad view of how it actually affects employees, their families and poverty levels, and how this might impact on matters like productivity and retention for employers.”

The research will have three strands: an online survey of employers, managers and employees; meetings with government, union and employer organisations and other stakeholders to map out policy considerations; and an in-depth case study of an organisation that has recently introduced a living wage for staff.

The project, Parker said, will provide a New Zealand context to the debate.

“Most of the literature we have looks at what’s happening overseas, especially in the United Kingdom and United States where living wage campaigns are more established. Our report will help New Zealand companies benchmark against firms in other countries, and also give insight into our special profile as an economy largely made up of SMEs,” she said.

Once the study is completed, a report will be produced outlining the scope of living wage initiatives in NZ – which organisations are looking at it, which ones have implemented it and what form the initiatives are taking.

Parker said it will provide understanding to what the challenges are to introducing the living wage and, for those that have introduced it, whether they perceive the benefits outweigh the costs and if their employees feel it has made a tangible difference to their lives.

The findings will be reported late next year.

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