The International Experience - Health benefits
Some LWO require either that the contractors pay a specified minimum hourly rate or they pay a lower rate and provide a set contribution to the health insurance costs of the employee. This is an acknowledgment of the high cost of privatised health care and the general need for private health insurance.
The most notable case where a State or City intervened in the provision of Health benefits is New York City. The City passed the Health Security Bill in 2005 to expand and protect health care for 27,000 workers in the grocery industry.
The first of its kind in the country, it requires medium to large groceries to meet the industry standard of health care spending for their workers. Currently over 70 percent of employers in the grocery industry pay for their employees' health care. However, the City believed that the cost-cutting practices of 'big box' stores such as Wal-Mart, that refuse to provide health care, force responsible businesses to do the same in order to remain competitive.
The new law is also expected to ease the burden on taxpayers. New York State's Medicaid, the tax funded health care programme for the poor, costs, local and federal taxpayers approximately $45 billion each year. It is estimated that New York City taxpayers alone spend roughly $615 million per year covering costs of publicly funded assistance programmes for workers who do not have health care provided by their employers. This has also been part of a cost-benefit argument put forward by LWO advocates - although the evidence of this actually happening is not conclusive. A significant proportion of the beneficiaries of LWO still need to access some government assistance programme(s).
Possible relevance to New Zealand
Using the above argument, it is possible to argue that the New Zealand government's provision of community services cards and Working for Families packages etc are a form of wage subsidy for businesses employing low-wage workers.
Any determination of a living wage in New Zealand would need to take sufficient account of family heath care costs and interface with the benefit and welfare system generally, including childcare subsidies.
