Living wage and labour shortage

Is There Really a Labour Shortage Or Are We Just Not Willing to Pay Enough?

There has been plenty of media attention on New Zealand’s labour shortage across the past year. Sparked by the borders closing due to Covid-19, businesses are struggling to find and retain skilled staff. But that may not be the whole story. How many of these companies are willing to pay a living wage to their entry-level staff? Or pay the market rate for a highly trained employee?

The Current Labour Shortage

Industries such as hospitality and agriculture are especially having a hard time. These industries rely heavily on seasonal workers arriving from overseas to fill positions. However, with the NZ borders closed to non-residents since March 2020, companies are having trouble finding New Zealand workers for the jobs.

Roles usually filled by migrant workers include grape harvesting, hospitality positions, construction jobs, and shelf stocking. These are the types of positions that businesses are having trouble filling with local workers.

However, some people are now claiming that it’s not a true labour shortage. Instead, the lack of applicants is because kiwis are not willing to work for less than they are worth.

While we have a minimum wage in New Zealand, many companies pay international hires the bare minimum. Kiwis, however, expect more. These employers need to start paying at least a living wage to attract the applicants they so desperately need.

Living Wage in NZ

Minimum wage in NZ is currently $20.00 an hour for adults, or $16.00 an hour for training. However, the living wage for 2021 and 2022 is $22.75, roughly 14% more than the current minimum wage.

The living wage is how much someone needs to get paid to live with the necessities they require. For example, the amount they need to get paid to afford food, housing, childcare, and transportation.

Many businesses calling for NZ to open its borders due to the perceived ‘labour shortage’ are trying to pay their staff less than the living wage. How can quality job seekers be expected to go for these roles that undervalue their efforts?

Job Seeker Perspective

Think of those who have worked in hospitality for a long time, who have spent years honing their skillset. Even those with 10+ years of experience can only expect to get paid up to $25 an hour, if they are lucky. Many workers find this rate of pay insulting, as they are highly skilled and underappreciated by employers.

A job seeker looking for a role in one of the industries experiencing a labour shortage can go to job listing sites like Shopless to look for work. However, many of the positions call for years of experience and specific skills while only offering just above minimum wage. If you want someone who has experience with grape picking or bartending, companies need to start understanding that they must pay for that experience.

Businesses Struggling to Stay Afloat

With the most recent series of Covid-related lockdowns due to the spread of the Delta variant, kiwi businesses are currently struggling to stay afloat. Many of these were already having a hard time keeping their doors open due to staff shortages.

Employers claim that they simply can’t afford to offer their staff a minimum wage. If they were paying everyone $30, they would have to to shut down. The argument from job seekers is that if businesses can’t afford to pay their staff fairly, maybe closing is the right thing to do.

This is clearly a complex situation with no simple answer. However, businesses moving towards at least paying staff a living wage will likely find that their ‘labour shortage’ disappears and they can find more suitable staff.

Instead of trying to get businesses to pay kiwi workers more, the Restaurant Association instead suggested that we offer more border exceptions for industries such as hospitality. Also they want the government to allow those on student visas to work longer hours, and give visa extensions to those already working here. They are very much still focusing on NZ allowing more migrant workers to fill positions across the country rather than suggesting changes that could make roles more appealing to kiwis.

Looking for a Job?

If you’re currently on the hunt for a job, remember that many businesses are short on staff. You are welcome to try to negotiate your pay, as many employers are desperate to hire skilled employees. You might end up being able to talk your way into receiving at least a living wage while businesses can’t just hire cheaper migrant workers from overseas.

To find out what local jobs are available right now, take a look at kiwi job listing site Shopless.

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