Living Wage Shelter and Food

Question: Discuss about theLiving Wagefor Shelter and Food. Answer: Introduction Living wage is refer to the minimum income which is sufficient for a worker to ensure his basic needs, the needs are shelter, food. Clothes, provision for bad time etc. (Pollin, 1998). Though the definition of living wages are different according to different people and different countries. The first living wage campaigning had been seen in 1990s in US due to increased poverty. The workers and their families were facing poverty, so they came up with their demand of living wage and the community had won their living wage (Glickman, 1999). The living wage is different from minimum wage. Minimum wage means the minimum income is needed for subsistence for a worker and his family. The needs are only food cloth and shelter. In a country the minimum wage if fixed by the government of that country consulting with the business organizations and the trade unions. Living Wage-New Zealand In New Zealand the first living wage rate was $18.40 that was decided in February 2013. In this year the living wage rate of New Zealand has been increased to $19.80 an hour and it has been working from july1 2016. A research work has been conducted by Charles Waldegrave from Family Centres social policy research unit with the help of Dr. Peter King to calculate the wage rate of New Zealand (King Waldegrave, 2012). According to the Annie Newman, the convenor of living wage movement in New Zealand, it is very important to update the living wage rate time to time so that the workers can earn enough income and they can lead a spontaneous life with their families in the society. Business Strategy-Living Wage If the living wage is adopted by a business house instead of minimum wage then there are some changes can be observed in their business strategies. The living wage has both pons and cons. After adoption of the living wage the business house has got some benefits like less absenteeism, decreased turnover rate, less recruitment and training cost, increase in morality and loyalty and apart from this recognition for responsible employers (Adams Neumar, 2005). In an organization when the employees are doing their jobs spontaneously then the productivity of the organization is automatically increased. The management dont need to think about the motivation of the employees. There is no need for separate training and motivation strategy for the employees. The recruitment strategy of the organization is also changed. There is no need to recruit new employees frequently. Apart from this due to the increased productivity the marketing strategy of the organization is also changed. The STP (Segm entation Targeting Positioning) strategy is also changed to increase the sale of the product (Kotler, 2012). In New Zealand in this year the living wage rate has been increased from $18.40 to $19.80 so if the living wage is adopted by an organization in New Zealand then their business strategies are also changed. There have some disadvantages of living wage adaptation. Due to increase in living wage the salary and the wages are increased and the operation expenses are also increased. Then the organization have to increase the price of their products to recover the increased labour and operational cost. The pricing strategy of the organization is changed. It is difficult for management to rearrange the pricing strategy of the organization. Apart from this due to the increase in price some people are not willing to buy the product. Employee Motivation Due to increase in living wage employees are automatically motivated to do their jobs spontaneously because with the increased income they can lead a standard life in the society with their families. . They become more efficient and loyal to the organization (Milkovich et al., 2002). As a result less absenteeism can be seen in organization and the organization productivity is increased day by day. But there are some disadvantages of adopting living wage. The working employees of the organization become more motivated and more efficient to their work due to living wage but on the other hand, the organization dont need to recruit more employees. As a result unemployment is occurred. Many people of the society become unemployed and they have to face poverty. Where the living wage can help the workers to get rid of poverty on the other contrary some people become unemployed so they and their families are not able to lead a standard and spontaneous life in the society. Decision The effectiveness of living wage depends upon the market type where it is applied. Mainly in the monopsony market it is effective. Monopsony market is referred to that market structure where many would be seller are present of a particular product and only one buyer, who does interaction with them (Boal Ransom, 1997). Among Kiwifruit Industry in New Zealand Zespri is not the single seller of Kiwifruit. Poverty level and unemployment level of the society should be taken in consideration to take decision about the adaptation of living wage. In New Zealand unemployment percent was 5.3% in December 2015. It fell from 6.1% to 5.3%. But 28% of children are facing poverty. Almost 305,000 children are now present in below poverty level. The children are living in cold, they have not any work clothes, they are living in a crowded place, and they are not getting food, proper education (Adamson, 2012). So it will be helpful for them if the earning persons of their families are getting more inc ome. So if the business houses in New Zealand adopt the living wage instead of minimum wage they will get more motivated, efficient and loyal employees. So if the business houses have got the proper knowledge about the market and the social status of the country then they can take decision about the adaptation of living wage instead of minimum wage. Conclusion In this year living wage rate in New Zealand has been increased. The workers are more willing to do work in living wage system to get enough income for a standard living in the society. So the business houses can adopt this living wage system instead of minimum wage to increase their productivity. References Adams, S., Neumark, D. (2005). Living wage effects: New and improved evidence.Economic Development Quarterly,19(1), 80-102. Adamson, P. (2012).Measuring child poverty: New league tables of child poverty in the world's rich countries(No. inreca660). Boal, W. M., Ransom, M. R. (1997). Monopsony in the labor market.Journal of Economic Literature,35(1), 86-112. Glickman, L. B. (1999).A living wage: American workers and the making of consumer society. Cornell University Press. King, P., Waldegrave, C. (2012).Report of an investigation into defining a living wage for New Zealand. Living Wage Aotearoa New Zealand. Milkovich, G. T., Newman, J. M., Milkovich, C. (2002).Compensation(Vol. 8). T. Mirror (Ed.). London: McGraw-Hill. Pollin, R. N. (1998). The living wage: Building a fair economy. Kotler, P. (2012).Kotler on marketing. Simon and Schuster.