The Post: University cleaners demonstrate the case for the living wage

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“Even when they are sick, they go to work, because they have bills to pay.” Sarah (whose name has been changed to protect her identity) is describing the situation for her fellow contract cleaners at Victoria University. And they don’t even always earn enough to eat, Sarah tells me when we meet in the university’s Hub. “[Sometimes] they just don’t eat lunch. I go to the Salvation Army [foodbank] to bring them noodles or other foods.”

This raises serious questions for the university, which will on Monday debate a proposal to pay its cleaners the living wage – but also for the whole country, as we awake from the long economic nightmare than has been Covid and the cost-of-living crisis.

Mortgage rates are falling, inflation is expected to hit 2.5% early next year, and unemployment will soon peak. Through the current gloom, spots of blue sky can be glimpsed.

We can’t assume, though, that this recovery will reach every corner of the nation. Wealth doesn’t just “trickle down”: the 1980s reforms, for instance, delivered grinding poverty amid sudden affluence. Only with specifically redistributive policies will wealth be evenly shared.

And share it we must. One child in eight lives in hardship, growing up in a household unable to afford basic things like heating their home or buying decent clothes and shoes.

Of those poor children, four in 10 have a parent in full-time work. A job, by itself, is not a sure-fire route out of hardship.

These issues can be seen, in microcosm, at Victoria University. Sarah says many of its cleaners have, as their base rate, the bare minimum wage, $23.15. Assuming 40-hour time-sheets, after tax and with top-ups, that comes to around $830 a week.

Workers often have families, and the median Wellington rent for a three-bedroom house is $790 a week. No wonder the sums don’t add up, even with Working for Families and accommodation subsidies. Cheaper rent is available outside Wellington city; but commuting then pushes up petrol costs.

As well as coming into work sick, or using foodbanks, some cleaners – Sarah says – are forced to ask Work and Income for emergency grants. The costs of low pay are effectively passed from the employer to the taxpayer.

All this forms the backdrop to Monday’s Victoria University Council meeting, where student representatives will urge the university to commit to working towards paying the living wage rate of $27.80.

The rate is calculated to allow families to exist with a little more dignity and comfort than the bare-bones minimum wage allows. Several universities already pay it to directly employed staff and – in AUT’s case – contractors. (As do government agencies.)

Currently, union organisers estimate, Victoria has perhaps 500 directly employed staff, and another 160 contracted cleaners and caterers, earning under the living wage.

In 2021, the university’s chief operating officer, Mark Loveard, said Victoria had “made a commitment to the living wage” and was “phasing it in”. Since then, of course, the university’s financial woes have been well-publicised.

It did, however, make an $8.4m operating surplus last year (boosted by one-off items); as with the wider nation, the talk is of a gradual turnaround in fortunes.

And no-one is asking the university to pay the living wage tomorrow. The request is merely to “work towards” it: to investigate the exact cost, the phasing-in options, and the likely trade-offs required.

Union organisers estimate it might cost $900,000 a year for directly employed staff, and another $400,000 for contractors. Even that would be just 0.2% of Victoria’s $546m revenues.

And there are offsetting benefits. A recent Cambridge University research paper, The Case for Living Wages, finds the salary boost typically leads to lower staff turnover, reducing recruitment and training costs.

Enjoying better health and feeling more valued, staff are often “more motivated and productive”, the researchers find. Four out of five employers say “work quality” has increased.

Given this evidence, the arguments against the living wage lack force. It is, admittedly, a slightly blunt instrument: but any route to addressing disparities within an institution must involve raising low wages. The university already “tops up” cleaner wages, so it is hardly tied to paying “market” rates. And a governing body doesn’t overstep boundaries if it directs pay strategies: when Wellington City Council managers argued as much in 2013, they were rapidly proven wrong.

Helping torpedo their arguments was the legal scholar Matthew Palmer, a former Victoria dean of law. For myself, as a current (honorary) staff member, and indeed a proud Victoria graduate, I think the living wage’s benefits are worth pursuing.

Sarah, unsurprisingly, agrees. “To be able to top up their family [budget], to be able to save for their children’s Christmas, [for funeral expenses] if someone dies … It would make such a big difference for the cleaners,” she says. “It would be a dream come true.”