I had a short piece in today’s Dominion Post on Wellington Council’s living wage policy. After walking through the standard reasons why this is a bad way of helping the working poor, I touched on some of the likely consequences:
Contractors bidding against council-owned agencies for provision of services that could be outsourced will lose some of their ability to compete on price. Council-provided services will become more expensive not only due to the direct effect of the higher wage bill but also because of the reduction in competition and outsourcing. I expect more services will then be provided by in-house unionised council staff.
If security guards working for a contractor earn more when rostered onto a council job than when sent off onto a private job, those workers will all prefer the council jobs. If I were a company contracting workers to council under that kind of arrangement, I’d…
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Utopia, you are standing in it! 
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