Rest home care workers are amongst the lowest paid in the country. At around $14-$15 an hour, they are paid a pittance for the important work they do; caring for aged New Zealanders in the twilight of their lives. They tend to our parents and grandparents, keeping them safe, clean, and offering human companionship at a time when many elderly have less and less contact with the community.
On 1 March of this year, rest home workers went on strike, campaigning to raise their wages from the pathetic $14.61 an hour they were being being. The following pics were of striking rest home workers in Upper Hutt,
See previous blogpost: 1 March – No Rest for Striking Workers!
A month and a half later, Ryman Healthcare – one of the largest providers for aged care in New Zealand – announced a record $84 million profit, for the year ending 31 March 2012. This was an increase of 17% on the previous financial year.
For ten years in a row, Ryman had posted record profits. Quite clearly this industry is not short of a ‘bob or three’.
Chairman Dr David Kerr said “the company faced some major challenges in Christchurch over the past 18 months given the earthquakes, and had responded with a performance which had exceeded its own targets “.
So obviously productivity was not a problem for Ryman. A 17% increase in products – in an otherwise stagnant economy and continuing global financial downturn – shows that the aged care industry is doing very nicely.
On 28 May, Human Rights Commissioner, Dr Judy McGregor, did something that few office-bound state sector workers do; she went undercover to discover for herself what kind of working conditions rest care workers put up with for $14.61 an hour,
As Dr McGregor stated,
“The complexity of the job was actually a surprise for me. It’s quite physical work, and it’s emotionally draining because you are obliged to give of yourself to other people. Saint-like women do it every day so that older New Zealanders can have a quality of life.
I’m not sure if I could have. I’m not sure I had the physical stamina and I didn’t want to hurt someone.
On any given shift you would be in charge of six, seven older people, and you would have to wake them, get them up, get them showered, get them toileted, feed them, and the whole time you were conscious that you had another five to go on your shift. It’s like working constantly to deadline.
The reliance of New Zealand, of all of us, on the emotional umbilical cord between women working as carers and the older people they care for at $13-14 an hour is a form of modern-day slavery,” she said in the report.
It exploits the goodwill of women, it is a knowing exploitation. We can claim neither ignorance nor amnesia.”
National’s Associate Health Minister Jo Goodhew replied,
“It is important that we take this seriously, that we look at it carefully and we look at what we are doing and what we can do before we provide a considered response.”
However, Dear Leader Key would have none of that, and firmly squashed any suggestion of paying rest home care workers decent wages. Only a few hours after Jo Goodhew announced that this was a problem demanding that “ we look at it carefully “, her boss stated bluntly,
So there we have it. According to Dear Leader,
“It’s one of those things we’d love to do if we had the cash. As the country moves back to surplus it’s one of the areas we can look at but I think most people would accept this isn’t the time we have lots of extra cash.”
Falling in line, Goodhew, conceded that whilst aged care workers were paid at “lower end“, she rejected suggestions that they were being exploited,
“I personally don’t believe we should be describing it as modern-day slavery.”
Gosh, that’s ‘big’ of her. It’s not “ modern-day slavery “.
I wonder what she’d call it?
Especially when it was announced todat that Lo! And Behold! Ryman had posted yet another profit!?!? This time a record half-yearly profit (from 1 April),
“The company added another notch to its 10-year sharemarket performance of climbing profits by posting a record half-year profit after tax of $69 million. Its share price rose 6 cents to close at $4.14.
Shareholders will receive an 18 per cent higher dividend for the half-year of 4.6 cents a share. All up, about $23 million in dividends is going to shareholders in the first half. “
“Since listing in June 1999, Ryman Healthcare has delivered its shareholders a total return, which includes share price appreciate and dividends, of 1,043%, or 24.3%pa. By cracking the 1000% mark (i.e. returning 10 times the original investment) brokers will, with a good deal of admiration, refer to Ryman as a’10-bagger’.” – Craigs Investment Partners
Wouldn’t it be nice if the $23 million being paid to shareholders was instead paid to the care workers who actually did the hard work?
Who is it that looks after granny and/or grandad – the “Saint-like women do it every day so that older New Zealanders can have a quality of life“?
Or some shareholders sitting on their arses and sipping chardonnay?
Here’s a thought for Middle Zealand, politicians, and Ryman shareholders; the course of Nature will not be deviated. Every one of us is growing older.
(You can see where I’m heading with this.)
There will come a time when Middle Zealand, politicians, and Ryman shareholders, and the rest of us will eventually require the services of aged care facilities.
Do we really want to be cared for by underpaid workers who may eventually give up any semblance of dedication to their job, and lose any measure of empathy for aged folk in their charge? That rest home workers may finally one days have a gutsful of being exploited?
If we want to be treated well in our twilight years – shouldn’t we first be looking after those workers who will be caring for us?
John Key sez that paying rest home care workers is “one of those things we’d love to do if we had the cash“.
Rubbish. The money is there.
It’s just going to the wrong people.
C’mon New Zealand – sort it out!
Previous related blogposts
1 March – No Rest for Striking Workers! (1 March 2012)
No Rest for the Wicked (23 March 2012)
Roads, grandma, and John Key (18 July 2012)
John Key’s track record on raising wages – 4. Rest Home Workers (11 November 2012)
Record profit for Ryman (17 May 2012)
PM: No money for aged care workers (28 May 2012)
Resthome spy hails saint-like workers (28 May 2012)
Ryman plans cautious Aussie debut (16 Nov 2012)
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From the ACT Party website,
“When Labour abolished the youth minimum wage in 2008, youth unemployment soared. A study by the former Department of Labour found that abolishing the youth wage resulted in a loss of up to 9000 jobs. Removing the youth minimum wage priced young people out of the market. “
What nonsense. The rise in youth unemployment post-2008 was due to the 2008 Global Financial Crisis.
In February 2009, the DoL (former Department of Labour) website reported,
“Unemployment has risen across the OECD
9. Statistics New Zealand reports that New Zealand’s unemployment rate is the tenth
equal lowest of the 27 OECD nations with comparable data. The Netherlands and
Norway have the lowest unemployment rate at 2.7%, with South Korea,
Switzerland and Austria also below 4%. The OECD average unemployment rate
was 6.5%, up from 6.0% when the September 2008 quarter HLFS was released.
10. New Zealand has so far not been affected as much by the global financial crisis as
some other countries. Furthermore, it is in a relatively better position due to a
strong starting point, fiscal stimulus and large decreases in interest rates. In the
United States, the unemployment rate has risen from 4.8% in February 2008 to
7.2% in December 2008, a 15-year high. Unemployment has increased in other
developed nations, particularly Ireland (to 8.2% in December 2008, from 4.7% a
year earlier) and Spain (to 14.4% in December 2008, from 8.7% a year earlier).
15. Youth are often the most at risk during a recession and their unemployment rate is
expected to rise further over the next year. This can be attributed to them having
low levels of experience, but also because those aged 15-24 years old are two to
three times more likely to be unemployed in general. In the early 1990s recession,
the unemployment rate for 15-24 year olds rose from 13.3% in early 1990 to
19.5% in early 1992.”
The DoL website also stated that “Maori and Pacific workers are also expected to be affected by the downturn. These groups have a greater proportion of youth relative to Europeans and also tend to be disproportionally employed in low-skilled and semi-skilled occupations, which are often more affected in a recession“.
Does ACT have a policy advocating a lower wage rate for Maori and Pacific islanders, based on their ethnicity?
After all, if one can discrimiminate on age – why not race?
It is dishonest to lay fault with a previous government’s policy when facts point to a completely different cause and effect scenario.
ACT should learn to be a bit bit honest with the facts rather than re-writing history, Orwellian-style, to suit some confused ideology.
But then again, this is John Banks’ Party. ’nuff said.
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Labour Minister Kate Wilkinson today announced a 50 cents per hour increase in the minimum wage, from $13 an hour, to $13.50 an hour.
Our Dear Leader says,
“Between making sure that people can feed their children and look after their families and themselves and also ensure that they keep their job…
“…We’re on our way to the magical $15 people talk about, but we can’t get there in one step.” – John Key, 8 Feb
Dear Leader is now saying that families “can feed their children and look after their families” on minimum wage?!
That’s not what Bill English said last year. When questioned by Q+A’s Guyon Espiner on this issue, English responded,
“GUYON: Okay, can we move backwards in people’s working lives from retirement to work and to wages? Mr English, is $13 an hour enough to live on?
BILL: People can live on that for a short time, and that’s why it’s important that they have a sense of opportunity. It’s like being on a benefit.
GUYON: What do you mean for a short time?
BILL: Well, a long time on the minimum wage is pretty damn tough, although our families get Working for Families and guaranteed family income, so families are in a reasonable position.” Source
In today’s “Dominion Post“, Kate Wilkinson says that, “Government was advised raising the minimum wage would result in up to 6000 job losses“.
Noticeably, she does not disclose what advice, or from whom, she is referring to. It can’t be Treasury advice, because as TV3′s Patrick Gower reported on his blog last year,
“…research from the United Kingdom suggests minimum wages may have no effect on employment, or that minimum wage effects may still exist, but they may be too difficult to detect and/or very small.” – Source
NZ Treasury stated that “…the claim a minimum wage rise may cost jobs has not been true in the past“. – Ibid
In other words, Wilkinson and Key are making it up as they go along. And finding it increasingly difficult to keep their ‘stories’ straight, it would seem.
On the other hand, there is little ambiguity in this story from a couple of years ago,
It beggars belief that New Zealanders – a national once proud of their egalitarian society – can view this situation with anything but angry disdain.
When did it become socially acceptable that the richest 1% increased their wealth by a massive 20%, as well as gaining the greatest benefit from the 2009 and 2010 taxcuts, whilst those on the minimum wage increase their income by a measely 50 cents an hour?
50 cents an hour. Or $20 a week.
By contrast, our elected representatives did very well last year from their pay increases.
Do you want to know what MPs, Ministers, and the P.M. are now paid?
John Key’s words continue to echo throughout New Zealand,
“We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.” – John Key, 29 January 2008
Here’s a thought, Dear Leader; if the top 1% could increase their wealth by 20% – why not increase the Minimum Wage by precisely the same amount?
That would raise the minimum wage to $15.60 an hour.
Still not as high as our Aussie cuzzies enjoy – but getting there.
So what about it, Dear Leader, are you keen to share the wealth around a bit?
Show us how “unrelenting” you really are.
Previous Blog post
Throughout this election, John Key has been criticising Labour’s policy to increase the minimum wage from $13 to $15 an hour, citing a Department of Labour (DoL) report that such a move would cost the country 6,000 jobs. Key even referred to this in his Leader’s Debates with Phil Goff.
Except… that Treasury has dismissed the DoL’s “claim” by stating that raising the minimum wage “has not been true in the past“.
John Key has been well aware of Treasury’s debunking of DoL’s “claims”, according to a Official Information Act request made by TV3,
Unless Treasury has become a satrap of Socialist International, it seems pretty hard to dismiss their conclusions. The DoL’s case is not helped by their own contradictions,
“…research from the United Kingdom suggests minimum wages may have no effect on employment, or that minimum wage effects may still exist, but they may be too difficult to detect and/or very small.” Ibid
I believe that the so-called DoL “report” can be safely dismissed as not very intellectually rigorous. And not even half clever.
The government claims that recent taxcuts, last year and in 2009, were “fiscally neutral”. But even this is not true.
National’s first round of tax-cuts, which took effect in April 2009, benefitted high income earners the most. Low income earners recieved very little,
“The cuts are proportional to wages. Those earning $100,000 or more a year will get at least an extra $24 dollars a week. Anyone on the average income of $48,000 a year will get an extra $18 a week, and low income earners will get a $10 a week tax credit.
On a monthly basis, both tax cuts together will see those earning $100,000 pocketing an extra $225, and low income earners an extra $95 a month.” Source
The October 2010 round of tax cuts were just as bad for low income earners, and generous for high earners,
Those on minimum wage recieved an extra $6.36. Meanwhile someone earning $120,000 benefitted from between $46.08 to $89.04.
With growing inflation reaching a 21 year high, to 5.3%; increasing ACC charges and rates; any gains made by low income earners and those on social welfare and superannuation were quickly eroded.
Little wonder that the end result was a transfer (“trickle up”) of wealth from the poor and middle classes, to the wealthy.
“The report’s 2004 data – the latest available – reveals the richest 10 per cent collectively possess $128 billion in wealth, with median individual wealth of $255,000. In contrast, the poorest 10 per cent collectively possess $17.2b, with median individual wealth of $3200. While the richest 1 per cent held 16.4 per cent of the country’s net wealth, the poorest 50 per cent owned just 5.2 per cent. ” Source
Which, unsurpringly, means we are seeing more headlines like these in our media,
The Dominion Post article goes on to state,
“Data from the Organisation for Economic Co-operation and Development shows New Zealand’s income inequality climbed dramatically in the 1980s and 1990s after sweeping economic reforms and deregulation of labour markets.
Disparities have plateaued since 2000, largely thanks to Working for Families tax credits, bigger pay packets for middle and low-income earners and declining investment returns for the rich.
But the gap between rich and poor still ranked ninth worst in the developed world in 2008.” Ibid
How well have the top richest done in New Zealand?
About this well,
The top 150 Rich Listers’ wealth grew by 20%.
That’s quite an achievement during one of the worst recessions in recent history. But even that increase in wealth isn’t sufficient for the Rich Listers. They wanted more,
“Jeweller Sir Michael Hill, worth $245 million, told NBR: “Could not the Government give us a little freedom to be able to make common sense decisions for ourselves?”
John McVicar, managing director of a forestry group that puts his family’s worth at $70 million, said economic policy should be based on reducing costs for business and increasing productivity and revenue.
Construction company head Sir Patrick Higgins, worth $100 million, said: “The country needs to address excessive regulation if it is to improve wealth creation.”” Ibid
Although at least one United States think-tank and the “Wall Street Journal” “rank New Zealand as already having the highest level of freedoms for business in the world. The Heritage Foundation’s “index of economic freedom” puts New Zealand fourth overall, with a score of 99.9 for business freedom.“
Clearly, tax cuts and increases in profits have shifted wealth upwards – not shared it around. Certainly the “trickle down” theory now applies only to meteorological services predicting upcoming rain falls.
This “gushing up” of wealth has been written about in the US “New York Times”. A very simple illustration showed where wealth has been accumulating – and who has been missing out,
Interestingly, the great divergence of wealth, productivity, and incomes started around the late 1970s, early 1980s. It was also about the time that Ronald Reagan and Margaret Thatcher were elected into office, and began neo-liberal, “free market” policies commonly referred to as “Reaganomics” and “Thatcherism“.
The New Right were ascendent, and implemented their policies with ruthless efficiciency. Those policies benefitted the rich – to the detriment of the unemployed, low-paid, and middle classes (who were too busy fighting each other to notice what was happening to them them).
New Zealand’s turn for a dose of New Right came only a few years later, when Rogernomics took effect in 1984.
As wealth is accumulated upward (as the NBR so vividly illustrated), the real reason for denying low-paid workers an increase in the minimum wage becomes more apparent; the rich would be forced to share some of that wealth. Their profits would be a little less.
Of course, this doesn’t stop some from gaining some very substantial wage increases,
How They’re Paid
PRIME MINISTER New salary (backdated to July 1): $411,510. Was: $400,500.
DEPUTY PRIME MINISTER New salary: $291,800. Was: $282,500.
CABINET MINISTER New salary: $257,800. Was: $249,100.
MINISTER OUTSIDE CABINET New salary: $217,200. Was: $209,100.
SPEAKER AND OPPOSITION LEADER New salary: $257,800. Was: $249,100.
BACKBENCHERS New salary: $141,800. Was: $134,800.
So remind me again, why we can’t increase the minimum wage? I’ve heard all the nonsensical, reactionary reasons – but they seem more predicated on a pathological disdain for the poor, from uninformed middle class aspirationists, rather than any clear logic.
If New Zealanders want to continue down the road of increasing wealth for the rich; growing disparity in incomes; worsening poverty – this is the correct way to go about it. Our current policies and inequalities will achieve a society where the 1% Haves control most of the wealth; the vast majority remain in poverty or near-poverty; and the middle classes stagnate, blaming those on social welfare (the worst victims of these wretched policies) for their lack of upward mobility.
But the middle classes are looking the wrong way.
This may all sound like extremist left-wing politics. Maybe it is. But I don’t think so. The information I’ve gathered is freely available and easy to gather. The realities are all around us and the media – despite it’s glaring faults and preoccupations with trivia and crime stories – does present us with a view of what’s happening around us.
Many of us just choose not to look.
It’s easier to blame the poor; the unemployed; those of welfare. And yet, if the current economic situation was not as distorted as it currently is – we wouldn’t have so many poor, unemployed, or on welfare.
An increase of $2 an hour would be a step in the right direction. Just ask the Prime Minister – taxpayers are paying him an extra $11,000 a year.
I wonder if paying all our MPs those wage increases will result in any job losses?
It appears that even Treasury does not buy into the neo-liberal argument that raising the minimum wage will “destroy jobs”,
National politicians, employers, right-wing reactionaries, and some low-information voters have the strange notion that raising the minimum wage will “destroy jobs”. In the second Key-Goff debate, held in Christchurch and hosted by “The Press”, Key outlined how raising wages would affect a cafe selling coffee and muffins, and would result in either prices going up – or the employer sacking staff.
What people forget is this,
- ALL workers on minimum wage would have their rate increased to $15 an hour. That means ALL cafes would be on an equal, level, playing field when it comes to employing staff. So one cafe owner couldn’t pay, say, $12 an houtr and try to cut costs that way.
- Workers on low wages tend to spend ALL their disposable income. Remember how the Nats gave empoyees the option to reduce their contributions for Kiwisaver from 4% to 2%? That was done because the government considered those earning low incomes were contributing too much to Kiwisaver, thereby reducing the amount of their disposable incomes.
- So, Let’s say that “Mary” currently works 40 hours a week and currently earns the minimum wage, $13 an hour, making a gross weekly income of $520. After tax, she is left with $447.85. She spends over half of that on rent, power, insurance, transport, and phone, – perhaps leaving her with $50 to spend on herself. That’s $50 a week on entertainment, clothing, saving for a weekend away, sporting/club/leisure activity or some other way to enjoy herself. That’s $50 that various retailers and service providers will get out of her.
- Now let’s calculate Mary earning $15 an hour. Her outgoings remain relatively the same. But she is now earning $600 a week, or $513.85 net. She now has $66 a week left over for discretionary spending. That’s an extra $16 a week she can spend on entertainment, clothing, saving for a weekend away, sporting/club/leisure activity or some other way to enjoy herself.
- Mary now has a few dollars extra. And she shouts herself a coffee and a muffin at her local cafe, once a week.
- The cafe owner’s turnover increases by the extra $5 week. Actually more than that – because Mark, Mathew, Melissa, Madison, and a whole heap of other workers on minimum wage are also frequenting that coffee shop, each spending around $5 a week.
- The coffee shop owner finds that his income has actually exceeded the slight rise in wages he has had to pay his staff. By increasing the minimum wage, people have more cash in their pockets, and some of that is flowing into his cash register.
That is how raising wages works.
Increasing turnover at the coffee shop does not necessarily work by cutting taxes. Those on higher salaries will not buy any more coffee or muffins than they are already consuming. They are already consuming as much as they want.
To increase his market share, the coffee shop owner has to “grow” his customer-base. And the best way to do that is to increase wages so people can buy his products.
That is how a consumer society works.
If anyone doubts the scenario I’ve just outlined – consider working it in reverse. Cut wages in half. Then figure out how much spare cash Mary will have to spend on consumer goods and services.
The clever chaps and chapesses at Treasury know all this, of course. That is why Treasury has stated,
“The Department of Labour says the rise will cost 6000 jobs. But Treasury has a counter view; “This has not been true in the past. The balance of probabilities is that a higher minimum wage does not cost jobs.” Source
Andy Martin agrees,
“Andy Martin runs a pub, employing 26 people in Oamaru. He says put the wage up and people just spend more money – everyone wins.” – Ibid
Andy Martin is a shrewed businessman and understands this better than most National politicians, employers, right-wing reactionaries, and some low-information voters who don’t understand the economics of increasing the minimum wage. Raising the minimum wage from $13 to $15 is not just being fair to workers.
It makes damn good business sense.
+++ Updates +++