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Staff morale and the living wage

by Michael C Barnett
I worked for the Wellington City Council in a management role from September 1989 until January 2000. I joined at a time when the Local Government Reform Bill was enacted and I soon formed the view that the organization needed a kick up the backside. It certainly got one.

During the next ten years I worked under four chief executives – all intent on restructuring and down-sizing the organization, and none choosing to build on the the work of their predecessor.

I witnessed the departure of many colleagues and the loss of a huge amount of institutional knowledge, never to be replaced. Finally, I also became a victim of restructuring, when my unit was disbanded and I was made redundant along with most of my staff. It was a demoralizing experience.

I managed to recover and over the ensuing years I remained in loose contact with a few of my former colleagues, some of whom still work there. Many have little positive to say about their job, but inertia or maybe something else keeps them hanging in, facing the uncertainty of a further round of restructuring and potential job loss.

During the decade of 2000 there was an unusually high turnover of staff and it seemed that restructuring never stopped. The then chief executive seemed to make it the sole reason for his existence at the top.

After 12 years in the role, this chief executive was sent packing and a new one taken on. Restructuring has continued, but some things have changed. Wellington now has a new council, a new mayor and to its credit, it has taken a small step to address the issue of staff morale. It has implemented a living wage for its lowest paid staff including workers employed via some of its contractors. This is a good initiative and other organisations large and small would do well to consider the benefits.

In a recent DomPost report, the Chief Executive of the Auckland Chamber of Commerce was reported as saying that

“paying a higher rate without asking for better performance is not sound business practice, private sector business would soon go out of business, and those who couldn’t survive on the minimum wage should turn to the government for welfare payments.”

He seems to be out of touch with what really motivates people, going by the comments (in the same report) from two Wellington employers who are paying a living wage.

Bicycle Junction owner Dan Mikkelsen has been paying his staff a living wage or higher since his business began four years ago. “I’ve always felt you pay people what you feel they’re worth to you as a business. We have a lot of skilled staff here who are really engaged in their roles, and if I was paying them minimum wage it wouldn’t reflect that.” Ezra Simons, 24, has worked for Mikkelsen as a barista for a year and appreciates being paid the living wage. “I’m absolutely more loyal. I’ve been working in coffee for a few years and I moved around because I felt unappreciated. This has definitely made me hang around here…”

Owners of commercial cleaning business Fresh Desk, Caroline de Castro and Nicole Oxenbridge, put their employees on a living wage “because it was the right thing to do. …Cleaning is hard work, it’s an underpaid industry,” Oxenbridge said. “When I moved here from Australia, if someone asked me to do cleaning for minimum wage I just wouldn’t do it. If I wouldn’t do it for minimum wage, why would I expect others to?” The pair employ about eight staff who work hard and recommend the business to people they meet who need cleaners. “They’re so supportive…It’s good for us because we get applicants with experience and knowledge, and get the best cleaners out there.”

The Living Wage Movement Aotearoa NZ maintains a register of living wage employers throughout New Zealand. It lists 66 members and and the number is growing.

To me a living wage is an admirable initiative, which should be encouraged. It puts more purchasing power into the hands of those working in the lowest paid sectors of the economy and this in itself must be of huge benefit to society.

Contrast this with the constant mantra from economic commentators and the business community telling us that the purpose of a business enterprise is to maximize profits for its shareholders. One could also be excused for thinking that it also exists for lining the pockets of CEOs and their senior managers.

Personally, I think this a selfish reason for being in business. It is a sad reflection on those who preach it and on a society which promotes the message. I concede that making a profit is necessary for a business to survive, but it should not be the reason for being in business. I see profit as the oil that lubricates the engine to prevent it from seizing up, and enabling greater and more meaningful goals to be attained.

I believe we all have a responsibility to the society in which we operate. When it comes to both public and private enterprise, the successful organisation in the 21st century will be those that recognize there are other stakeholders in a business and these include its employees and the community it serves. All have a stake in ensuring the success of the enterprise.

The various Chambers of Commerce and the organisations they represent would do well to reflect on their values and their narrow self-centred mindset. Rather than knocking the concept of a living wage, they should wake up and recognize that workers are one of the most valuable assets an organization has and that a respected and motivated worker can move mountains. Society would benefit through higher productivity if the concept were to be expanded throughout the entire government and business sectors.

4 comments:

  1. Troy H, 10. April 2017, 10:43

    I support the WCC chief executive and management going on the living wage.

     
  2. Chris Calvi-Freeman, 10. April 2017, 19:18

    Well said Michael. Your final paragraph is particularly apposite. Time all organisations returned to the realisation that their staff are their greatest asset; many view them as their biggest cost and therefore incorrectly infer that they are their biggest liability.

     
  3. Elaine Hampton, 11. April 2017, 15:27

    Any business that cannot pay a living wage and make a profit shouldn’t be in business. And certainly shouldn’t be expecting the state to subsidise their workers/business. Corporate Welfare.

     
  4. Lola Ester, 16. April 2017, 9:01

    The whole WCC including CEO, upper and middle management, councillors and consultants should be on this “living wage” .

     

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