What’s a ‘living wage’?

That must depend on many factors, including where you live, your age, whether you have a partner or a family, whether anyone else in the household works, available housing and what your expectations are.

A 35 year old living with a non-working partner and family in Auckland will have different requirements to an 18 year old living still at home in Tuatapere, or a 25 year old single person being provided accomodation, power, milk and meat on a dairy farm in Taranaki.

NZ Herald reports on the launch of a campaign for a ‘living wage’.

Battle for a living wage: The pay you need to survive

Almost 750,000 Kiwis look set to be classed as the new working poor this week when the union movement fixes the value of a “living wage” needed to have a decent life here.

The rate, expected to be $18-$20 an hour, has been calculated by researchers at the Anglican Church’s Family Centre in Lower Hutt to be “the income necessary to provide workers and their families with the basic necessities of life”.

About 40 per cent of the country’s 1.85 million employees, or around 740,000 people, earn below that rate – including beginning teachers, chefs, truck drivers, mechanics and carpenters, as well as traditionally low-paid groups such as cleaners, caregivers and checkout operators.

The unions have invited national and overseas researchers to a two-day conference in Auckland on Thursday and Friday to launch the study as the basis of a campaign to lift all wages to the “living wage” level.

What is their calculation of a living wage?

  • $18 per hour – $720 per week  – $37,740 per year
  • $20 per hour – $800 per week  $41,600 per year

That is based on a 40 hour week and on an M tax code.

The effective in the hand amount, taking in to account Working For Families tax credits:

@18

  • no child $600
  • 1 child FTC $685
  • 1 child IWTC $708
  • 2 or more children FTC/IWTC $708

@20

  • no child $665
  • 1 child FTC $735
  • 1 child IWTC $786
  • 2 or more children FTC/IWTC  $786

FTC (Family Tax Credit) – paid regardless of your source of income

IWTC (In Work Tax Credit) – an additional payment for families who normally work a minimum number of hours each week for salary and wages

On the ‘living wage’ you get all tax credited if you have two or more children (the difference is ACC earner premium which is not credited).

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1 Comment

  1. Wendy

     /  11th February 2013

    Congratulations and well done for the most sensible report I have read on the BASIC LIVING WAGE FOR NEW ZEALANDERS TO LIVE, I note this is based on a 40 HOUR week which is often not what people can get, some are working 10 hours etc, so the top up to people needs to be more from Govt. If skilled people cannot get 40 hours what are we trying to live for, no wonder people see jail as an option, though it costs thousands apparently to house an inmate every week, costs for fallout to crime because of poverty should be transferrable if that makes any sense hmmmm.

    Reply

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