Why workers are taking pay cuts when the cost of living is rising

Wellington teacher Cameron Stewart took a $12,000 a year pay cut in July after a torrid first term marred by Covid-related disruptions.


His hunt for a better work-life balance led to a lower paid public service job that gave him more family time, and allowed the keen musician to get back to occasional jam sessions with old university mates.


Despite the rising cost of living, some workers are prepared to earn less and prioritise things that matter to them, and Frog Recruitment managing director Shannon Barlow says the greater emphasis on wellbeing during the pandemic has influenced that.


A recent Frog Recruitment survey of 1107 workers found about a third of older workers prioritised their work-life balance, compared to 41% of under 25-year-olds.


“For them prioritising your own health and ensuring work-life balance has been normalised, whereas at the other end of the [age] spectrum, it’s a relatively new concept.


Just 17% of the younger group were prepared to “go above and beyond” in their job, compared to 43% of 25 to 50-year-olds, and 54% of those aged 50-plus. Barlow says that’s not surprising.


“[The more mature group] have had years and years of it being a habit, this perceived expectation that you need to put in those extra hours and effort to get ahead.”


After 6½ years teaching, Stewart’s decision to take a break was driven partly by Covid-19 – coping with students and teachers constantly in and out of the classroom, lack of relieving staff, responsibilities as a dean providing pastoral care, and the sheer difficulty of getting to and from Wellington Girls’ College while protesters were camping at Parliament.


His new job working as an adviser with the Ministry of Education meant he could work remotely from Christchurch when family there needed support after bereavements.


Stewart, 33, also enjoyed being able to switch off completely from work.


“The biggest thing was that separation between work and home ... the fact that I could shut my computer down at the end of the day and that was the end of my day.


“I’ve got back into music a little bit, I’ve been able to do things around the home more and be a better partner.”


The lower income meant going without a few things.

“Maybe not treating ourselves as much as we would have done, but that hasn’t been as necessary because I haven’t felt like I needed to do something like that to pick me up.”


Stewart missed teaching and is heading back into the classroom to teach social studies at Onslow College next year.

With no management responsibilities the pay rate is still about $10,000 below his previous teacher salary, but he has no regrets.


“It was the right thing to do. I have a completely new set of skills, I’ve been able to take some time to reassess the really important things in my life, and to concentrate on my own well-being.”


Clinical director of the Groov wellbeing app Dr Fiona Crichton said the attitude of Gen Z workers and younger millennials was affected by the fact that many felt locked out of the housing market.


Homeownership had traditionally been the accepted path to long term financial security, but if work could not achieve that, it had to offer something else, Crichton said.


“Work at the expense of mental and physical health seems ridiculous, so there are limits to what many of the younger generation will tolerate. Work has to meet other needs, such as values, meaning and purpose.”


Crichton said some young people committed to political change and environmental issues, were prepared to work for very little, and stress, climate anxiety and workplace burnout were all factors influencing their choice of employment.


“Among these young people there is a feeling they have little choice but to give up on the big salaries and pursue work that’s about wider issues. It feels urgent right now, given the current political landscape.”


Barlow says jobseekers are now more inclined to check whether prospective employers walk the talk on issues like sustainability.


“We’re seeing a lot more emphasis on values and culture fit over what is the role, and how much is it [paying]?


“If the company website says they are committed to sustainability, what does that actually mean, how do they practise it?”

And Barlow said those chasing the dollars need to take into account the additional responsibilities and expectations attached to an extra $10,000 to $15,000 a year.


“It’s really important to weigh all that up and not be too swayed by the money, because yes it’s definitely important, but it’s not the be all and end all.”

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Stuff NZ • Mar 05, 2023

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