The Working Poor: In a job, but unable to make ends meet

Source: Sunday

This story was first published on Sunday July 1.

By Tania Page

For many New Zealanders hard work doesn’t pay the bills.

They’re known as the Working Poor – people who are working hard, often fulltime, yet because of a multitude of factors they aren’t able to make ends meet.

It can be embarrassing and often hard to accept because it means asking for help. It also means making difficult choices.

Once the rent and bills are covered often the only flexible cost left in a family’s budget is food, the amount and its quality.

So for laundry worker and cleaner Bella Walters a trip to the supermarket can be stressful, she works full time and earns just above the minimum wage.

She says she wouldn’t survive without financial support from her children. They bought all the furniture in her home and frequently deposit money in her account for petrol.

Bella only puts cheap cuts of meat and a few staples like bread and pasta in her shopping trolley, it’s no frills eating and goes against her doctor’s advice.

As someone suffering from high blood pressure she’s supposed to be eating plenty of fruit and vegetables. So on a weekly basis her budget dictates that her health suffers.

Social Policy researcher Charles Waldegrave says the fundamental problem is high rents and low wages.

He says rent controls should be introduced to limit the amount a property owner can charge for renting a home or apartment. He also questions whether the government is addressing the issue of affordability when it comes to housing.

As far as low wages go he points out that Australians get paid 32% more on average than New Zealanders.

“We really need to diversify our economy, get into a more high tech, high value economy and for employers to be able to pay people adequately,” he says.

But another factor, he says, is the increasing casualisation of labour. It makes it difficult for workers to budget and therefore adds insecurity to their finances.  

Influenced by the Living Wage movement which started in the US, Waldegrave has devised the living wage for New Zealand. It’s set at $20.55 per hour.

That’s how much someone should be paid to be able to support their family, pay all the bills and to engage with society – to live a little.

He suggests that would allow families to go out once a month, or join a sports team.

For Audrey Banach, who works at Bicycle Junction in Wellington, the step up from the minimum wage to the living wage means she’s now able to save a little money, and she isn’t stressed about paying her rent.

Her boss Dan Mikkelson factored in paying the living wage when setting up his business as a necessary cost.

“This pay rate allows people to have a couple of days off, come back refreshed and more engaged and more productive. I think paying the living wage should effectively be cost neutral,” he says.

Anecdotally, organisations on the frontline like 0800 Hungry in Christchurch, Love Soup in Rotorua and the Salvation Army believe the number of Working Poor are increasing.

But not enough is known about them so the government is commissioning a study to find out.

It will explore all the factors that lead to being working poor to better understand the causes, and possible solutions.

Social Development Minister Carmel Sepuloni says “it’s not something that we can click our fingers and fix immediately, it will take some time”.

She agrees it’s unacceptable that hard working Kiwis can’t cover all their costs.