More market madness

By   /   October 9, 2013  /   16 Comments

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They are leveraging their salaries against private sector roles which in turn use council salaries among others to benchmark their own. This ever upward ratcheting leads to the obscenity which is Auckland Council senior salaries.

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Possibly the most pathetic comment of the Auckland mayoralty campaign was from incumbent mayor Len Brown when he was challenged about the sky-high salaries for senior management at Auckland City Council.

The speaker prefaced the question saying that no less than 1500 council employees now earn more than $100,000 with 113 earn more than $200,000 while several CEOs of the council and Council Controlled Organisations are being paid close to $800,000.

Moreover it was pointed out that despite the new council employing almost 2,500 less people in full time roles than the seven councils before amalgamation, the total salary bill is $140 million higher.

The incumbent mayor stepped up the microphone and said gravely “we have to meet the market…” – a comment which met with much derision.

What “market”? It’s an artificial creation by Rodney Hide’s private sector appointees to the top council jobs when the super-city was established three years ago. These senior managers have brought private sector values of greed, entitlement and disdain for workers to their roles as corporate overlords.

They are leveraging their salaries against private sector roles which in turn use council salaries among others to benchmark their own. This ever upward ratcheting leads to the obscenity which is Auckland Council senior salaries.

Needless to say those that do the actual work that keeps the city running have their pay squeezed down as close to the legal minimum as possible through the contracting process which conveniently creates more room for gluttony at the top.

As a mayoral candidate myself I’ve campaigned to set the maximum salary at five times the living wage.

These are public service jobs and those appointed should see the provision of high quality services for Aucklanders as their goal. They don’t need a gold-plated salary to do so – just good management skills, some basic decency, a sense of public service and respect for the dignity of our city employees.

Meanwhile the latest Fairfax survey of CEO salaries at our top listed companies shows that between 2011 and 2012 the average CEO earnings went from 22.5 times what their employees earned to 26.4 times.

The executive director of the New Zealand Initiative (the old Business Roundtable) is quoted as saying “the causes of the pay trend are obscure although it appears to be a global phenomenon”. Give us a break!

It’s market madness – don’t try to understand it – just realize it has to go.

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16 Comments

  1. Louis M says:

    I think it’s fair to say that salaries would be higher as employees are now responsible for a much larger area and therefore, harder work. While the CEO is clearly overpaid trying to cut everyone who earns over $100,000’s pay is a terrible idea.

    • Andrea says:

      Perhaps you could define ‘harder work’?

      When you know your craft as a bureaucrat, and you develop effective systems, then the task becomes easier, far more effective and transparent.

      When you, as a bureaucrat, can see the interconnections and interdependencies before ‘restructuring’ then improvement occurs, instead of repeated omnishambles.

      Based on results, they are none of them worth the largesse they’ve conspired to award themselves. Their incompetence in their craft is all too apparent.

    • Davidj says:

      The ‘market’ as shit as it is only functions, so we re told, through free competition. The council has no competition, thus its salaries/wages cannot be a function of the market.
      We must set the wages of our democratic employees. Otherwise the council though not in competition with the market is controlled by it.

      Que low voter turnout.

    • Michal says:

      Oh for goodness sake there are only so many hours in the day. Why wouldn’t $100,000 do, half of Aucklanders earn less than $24,000 a year, frankly I would much rather they had a real living wage.

  2. Mike says:

    I hope you get elected and can change this culture. It is an appalling situation and I have no idea why Auckland ratepayers aren’t protesting against it.

  3. David says:

    Yes, we have corruption at the highest level and our councillors seem to have forgotten they are public servants.

    • Ant says:

      We should also pay more attention to what’s happening in the other areas that have schools for ‘leadership training’, or ‘boot camps’.

  4. Countryboy says:

    I was talking to a man who is now a legal professional but was once a train driver . He told me that when he drove trains back in the 70’s his wage was half that of the boss of New Zeland Rail .

    The psychology of just how a select few can argue that they’re worth more than 26 times the living wage as a public servant is taught in commerce and economics degrees in virtually every university in the world so I can’t see why there’s an issue about recognizing what the problem is per se .

    The question should be ‘ What are we going to do about it ? ‘

    It is our money . It is money we work hard for . It is money we fork over ( or else ! ) to be administered by public servants to make our lives comfortable , efficient and safe . And those same administrators are helping themselves to millions and millions of our money to spend on … what ? Themselves of course .

    Why we are not storming their offices and dragging their worthless arses out into the street , tar and feathering them then driving them out of town and warning them not to return or they may find themselves hanging from that fucking tree , pole or bridge is where we should be focusing our curiosity .

    The fat , puffed up , useless bastards . How dare they .

    Well , they do dare because they think they’ve outsmarted us .

    By contrast , the psychology behind why we don’t dare , is worthy of close scrutiny . Perhaps Nigel Latta could shed some light on that subject for us ? Oh yeah , I forget . He’s gone to the Dark Side , so no light will escape from there .

    My personal theory on why we appear to be stuck in a seemingly powerless rut against , not only local government but central government , is because we’ve been rendered Leaderless from generations of thuggery and bullying within the confines of public offices across NZ . It’s only now , after more than thirty years of neoliberalism that we see good people gaining new confidence and I reckon it’s because they’re empowered by what they read on the Blogs . You can achieve anything with the numbers behind you and I truly pray like fuck that John Minto gets to have a go .
    ( As I wrote that I thought of the brilliant Tim Shadbolt who saved Invercargill City and best of all , Invercargill is a great little city , not at all a greedy shit hole like some towns I could name . )

  5. Ovicula says:

    Let them make their own cake, sell it, and live off the proceeds – in the private sector. I have never come across a public service executive who is worth a quarter of what they claim as their market reward, at least since the plague of Rogernomics blighted our fair land. Perhaps the worst thing Douglas did was enable people like Len Brown to believe the shit they spout and stay in the Labour Party.

  6. Crunchtime says:

    I’m starting to appreciate David Cunliffe’s proposed top tax rate of 39% for those earning over $150,000 more and more.

    $150k is, by the way, is about the same as the 5-times-minimum-wage that John Minto just mentioned. Sounds about right to me…

    • kewl says:

      It’s pretty weak. Do you know what the top tax rate was in 1981?

    • Michal says:

      You know in the eighties Goff voted to lower the rate to 33%. I’ve never understood why it is such a problem for the haves in our society to pay more, the ought, they have done all right. I’m all for at least 39%

  7. First Law of comparative NZ salary justification:

    Compare and benchmark management-class salary levels to those in US and other leading first world economies.
    Compare and tie working class wage levels to those India, China and other developing nations.

    Adjust accordingly.

  8. The hard work myth is ludicrous. It is not like a cleaning job. Cleaning a palace is obviously harder work than cleaning an apartment. Or teaching. Marking class work for 300 students is harder work than marking for 30. Does anyone think the CEO of a city of 1.4 million people work 10 time harder than a CEO of a 140,000 population city. They do not have to personally service the city or each of its people personally. They will just employ more people under them. But they probably have the same number reporting directly to them, just more layers.

    And research has actually shown that ulcers and other medical problems indicating stress are more prevalent in those at the bottom of the working tree, not the top. So their is no evidence that they work harder or are under more stress at work.



Authorised by Martyn Bradbury, The Editor, TheDailyBlog, 5 Victoria St East/Queen St, CBD, Auckland, New Zealand.