Sorry Mr Farrar, We Disagree

Pay rates should primarily be determined by demand and supply – not by legislation, so says prominent blogger David Farrar. This is why he objects to the Employment Court ruling that aged care workers are entitled to equal pay.

It is a point of view that does not sit well with the Alliance Party. Our commitment to the common good means that we believe that everyone is entitled to a liveable income no matter what. In any case for aged care workers, and many other occupations, the supply and demand ship has long since sailed.

What aged care workers get paid depends largely on what the government decides it wants to pay for residential services for the elderly. That amount is not very much in relation to the amount of care frail elderly people need. Wages make up most of the expenses so they are of necessity low, even in not for profit organizations.

Service providers scratch around for people prepared to work for the wages on offer and hope they can train them sufficiently to do the job. Miraculously there are people who will accept the wages and conditions – mainly middle aged women who actually care more about the people they look after than what they are paid. But facilities are often short staffed and turnover is high. It is hard to provide quality care under these circumstances. Supply barely meets demand.

At the other end of the scale, consider top executives, paid in the hundreds of thousands. There appears to be no shortage of suitably skilled people applying for these jobs yet they command exorbitantly high salaries. The laws of supply and demand are irrelevant here as well.

What is relevant in both cases, is not how many people are prepared or able to do the work but the perceived importance of the work.

Sadly, care work is not perceived as important. Looking after the frail elderly is not rated anywhere near as highly as looking after shareholders’ money. Caring is seen as women’s work that has often been done for free. So the hourly rate paid to workers is around the minimum wage. Hence the validity of the Employment Court ruling.

Sorry Mr Farrar, we disagree. We look forward to the Court of Appeal upholding the interpretation of the Equal Pay Act by the full bench of the Employment Court. We hope this will be the end of the matter. We hope that care workers will finally get a liveable wage commensurate with the expertise required to do their difficult and demanding job well. And we hope that no one will begrudge them this. After all they’re only asking for about $20 an hour, not $200!

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