Bosses should encourage low-paid staff to upskill: Barnett

Employer can encourage worker to upskill and raise their firm's productivity, and then be paid more, says Auckland Chamber of Commerce boss Michael Barnett. Photo/File

Responsible bosses should help reduce inequality by encouraging their lower-paid workers to upskill, says Auckland Chamber of Commerce boss Michael Barnett.

NewstalkZB's Nadine Higgins wrote yesterday that it wasn't good enough for employers to say they can't afford to pay workers more.

"If you can't afford to pay your workers enough to live on, your business model is not as sound as you think it is," Higgins said.

Barnett, in response, said he agreed that reducing inequality was everyone's responsibility.

However, he said that Higgins' went off track when asserting that every business should pay a "living wage" without saying what it really is.

"The living wage is not mandatory but aspirational. Developed by the Family Centre Social Policy Research United [Peter King and Charles Waldegrave], the living wage is calculated on the logic of a household of two adults and two children on 1.5 incomes being able to meet their basic needs," Barnett said.

"Using that calculation [$20.20 an hour] as the 'go-to' benchmark is wrong when you apply it across the NZ workforce without regard to the workers or businesses circumstances.

"The minimum wage, in contrast, is exactly that; it is a minimum wage [$15.75] for a worker that is set by government as a safety net.

"Businesses pay a worker what a job is worth. If the job is unskilled and basic and worth only the minimum wage, the employer and the worker have options. The worker can accept the job and seek to improve their skills and capability to seek a job worth more.

"The employer can encourage the worker to upskill and raise the firm's productivity, and then be paid more.

"The employer can encourage the worker on a minimum or low wage to seek any tax credits and/or family support they are entitled to from the government.

"I encourage employers to do this. It is part of the role of a responsible employer to help reduce inequality and encourage low-paid workers to upskill.

"I would also add that as a result of the latest settlement for care workers, employers now have a plethora of pay principles to have regard to - Working for Families, Minimum Wage and Pay Equity principles. Within this responsibility, the Living Wage concept is an unhelpful distraction," Barnett said.

EMA chief executive Kim Campbell said he encourages bosses to pay for the skills and expertise they need.

"In the current environment, there is a skills shortage, 58 per cent of employers say they are finding it difficult to recruit (72 per cent are finding it difficult to recruit for skilled positions).

"Therefore, employers need to provide a package that attracts the talent they want; this is about the right level of compensation plus a range of other benefits.

"In regards to the minimum wage, this is exactly what it says it is, a base level to start from. Generally, this will be increased as the employee gains more skills and becomes more productive.

"What we want is skills, training and lifelong learning initiatives which upskill our workforce, and deliver to the requirements of employers. If we can work towards a higher skilled, more productive, higher wage economy; that's better for New Zealand overall," Campbell said.

"Also, the pay equity settlement announced this week indicates how future claims will be managed under the proposed new law. The bargaining approach provides a framework employers are familiar with and one which gives more certainty on how a claim may be raised, how it may be dealt with and how any settlement may be arrived at."