Retirement village operators

[artemis]

In Stuff today -

More Kiwis opting for retirement village living boosts demand for the construction industry

Numbers of units now and future, issues with finding tradies and costs of materials, and a look at potential changes in resident contracts.

https://www.stuff.co.nz/national/hea...ction-industry

[justakiwi]

As I have explained many times before, the wage increases for caregivers have now been completed. The 2017 pay equity settlement included incremental annual pay increases - the last of which, we have just received. That's it. Done and dusted. There are no further increases expected or planned, and it will be years before we see another increase. I can't speak for all caregivers, but I believe this round of increases has been fair and well deserved, and I am happy with what I am now being paid. The current maximum caregiver rate is now $27/hour - with a Level 4 qualification. I will be more than happy with that rate.

You can't simply look at wage increases without looking at what is behind them. This was a pay equity settlement. Not an annual "we want a pay rise" bargaining round. You can't start predicting huge wages costs for the future, based on a one-off catch up settlement.

Note: above comments are based on caregiver wages only, as I have no knowledge of RN, housekeeping staff pay rates etc.

Here is the maximum allowable weekly rate that Auckland long term care residents are/were liable to pay on a five year basis. This table is post the 1st July 2017 pay equity settlement for Care Workers.

	2021	2020	2019	2018	2017
Auckland: Max Contribution	$1,243.34	$1,193.08	$1,158.29	$1,124.41	$1,062.95
Annual Increment	+4.2%	+3.0%	+3.0%	+5.8%	NM
Care Worker L2 3yrs service Wages 40hr	$920	$860	$840	$800	$630
Annual Increment	+7.0%	+2.4%	+5.0%	+27%	NM

Reference for health worker wages

https://www.health.govt.nz/new-zeala...tion-employees

The cumulative increase in care funding has gone up 17% over four years
The cumulative increase in care worker wages has gone up 46% over four years

That looks like 'care home operators under pressure' to me. The latest funding increment, despite being higher than the preceding two years , has fallen behind wage inflation.

SNOOPY

[Beagle]

There are no further increases expected or planned, and it will be years before we see another increase. Justakiwi

Human nature is a funny thing. One persons expectations are not necessarily remotely like another's.

My understanding is that Registered Nurses had the same substantial multi year pay accord which resulted in a similar level of substantial wage increases in recent years. That hasn't stopped them striking for much more has it with demands for another whopping 17% !

Highest inflation in a decade announced today at 3.3% which is significantly higher than expected. https://www.stuff.co.nz/business/125...balloons-to-33
I would think all unions will be putting their hand out for more going forward to at least match the inflation rate.

I think we are going to see wage demands increasing right across the economy. Plenty of people feel aggrieved. My sister in law is degree qualified in early childcare education with 15 years experience and earns $29 an hour and has to deal with demands of snotty nosed and infectious little kids all day who can be incredibly hard work. Doesn't seem much for a degree qualified person with that much experience does it ! Maybe they'll be the next to strike !

[justakiwi]

As I said, I can't comment on the situation for nurses. But I can tell you - there is a limit to how much anyone will ever pay caregivers.

Caregivers fought for years to get these latest increases. None of us are living with any illusions of ever being highly paid. Sure, we would hope for regular annual increases to keep pace with inflation, but there will be no major demands for higher base rates, anytime in the near future.

It doesn't matter anyway. None of these providers are going away. They know the country (and the government) needs their services, and always will. Without caregivers, they have no business. So providers and whichever government happens to be in power at any given time, will need to put their heads together and get creative, to find a way to deliver services whilst paying their staff an acceptable wage for the work they do.

In 20-30 years things will look vastly different with regards to aged and dementia care. I would bet my hat, the care side of the business becomes significantly more important than it is right now.

Human nature is a funny thing. One persons expectations are not necessarily remotely like another's.

My understanding is that Registered Nurses had the same substantial multi year pay accord which resulted in a similar level of substantial wage increases in recent years. That hasn't stopped them striking for much more has it with demands for another whopping 17% !

Highest inflation in a decade announced today at 3.3% which is significantly higher than expected. https://www.stuff.co.nz/business/125...balloons-to-33
I would think all unions will be putting their hand out for more going forward to at least match the inflation rate.

I think we are going to see wage demands increasing right across the economy. Plenty of people feel aggrieved. My sister in law is degree qualified in early childcare education with 15 years experience and earns $29 an hour and has to deal with demands of snotty nosed and infectious little kids all day who can be incredibly hard work. Doesn't seem much for a degree qualified person with that much experience does it ! Maybe they'll be the next to strike !

[Snoopy]

My understanding is that Registered Nurses had the same substantial multi year pay accord which resulted in a similar level of substantial wage increases in recent years. That hasn't stopped them striking for much more has it with demands for another whopping 17% !

I think you might be conflating two things Beagle. IIRC the John Key lead government did give significant pay increases to school teachers and nurses, well above what might have been expected in the private sector at the time. But that was separate from the 'pay equity' negotiations that for nurses that was first lodged in 2017 and is yet unresolved. Pay equity is to do with equal pay for skill and responsibility when lined up with male dominated jobs which are comparable. It was pay equity that was resolved for the rest home care workers in 2018, and saw the substantial improvement in care worker wages of around 30% over four years. But pay equity has not been resolved for Nurses. The 17% figure you quote is tied up with the pay equity claim which is separate to any multi year accord that nurses might negotiate with the DHBs.

Meanwhile back to 'Retirement Sector Investment', the issue is not the wage increases in themselves. The issue is that the government mandated funding for aged care workers has not kept place with the government mandated wage increases.

SNOOPY

[Beagle]

Perhaps I am Snoopy but my understanding is that registered nurses now command wages in very high thirties per hour and they want 17% more. They can already earn $80,000 - $100,000 with overtime....but they want lots more...Hmmm

The way I see it this thing just feeds on itself. DHB nurses want more, then retirement companies have to pay more to retain their qualified staff then others in that sector want more, then others in other sectors want more...

The cost pressures you suggest for this sector are very real and something I have talked about at considerable length already mainly on the OCA thread because they're most affected.

Meanwhile old folks expect a lot when they move into their retirement unit and their modest weekly fee and there are calls for sharing of capital gains.

With interest rates headed up and house prices already at an unprecedented level relative to household income I don't think the massive outperformance relative to the market that SUM in the last decade and RYM in the last two decades have enjoyed will be the norm going forward.

Good operators who appropriately price their units and services (taking into account the very high cost to provide them) should do well in the future but certainly not as spectacularly as some have in the past.

[DarkHorse]

Jacinda is too young to remember wage-price spirals; I'm not quite, but does anyone know of one that ended except during a painful recession?

[Beagle]

Jacinda is too young to remember wage-price spirals; I'm not quite, but does anyone know of one that ended except during a painful recession?

The early to mid 1980's saw huge interest rates, house price growth and inflation. That didn't end well. The 1987 stock market crash and associated effects lingered on for many years.

[Beagle]

Jacinda is too young to remember wage-price spirals; I'm not quite, but does anyone know of one that ended except during a painful recession?

The early to mid 1980's saw huge interest rates, house price growth and inflation. That didn't end well. The 1987 stock market crash and associated effects lingered on for many years.

Cindy was in primary school at that point.

P.S. I see the nurses have called off their strike.

[nztx]

https://www.nzherald.co.nz/business/...ge-33-per-cent

'Monstrous' inflation shock: NZ consumer prices surge 3.3 per cent

New inflation data shows prices rose even more than many expected in the June quarter.

The Consumer Price Index was up 3.3 per cent year - the market had forecast 2.7 per cent.

This was the biggest increase in nearly 10 years and was driven by higher prices for new housing and petrol, StatsNZ said.

"Previously, annual inflation had peaked at 5.3 per cent in June 2011, impacted by a GST increase of 2.5 percentage points that came into effect in October 2010".

Someone has woken up in a hurry ..

Do they not realise there was massive invisible artificial INFLATION created over the past 15 months while
the Government by weird & wonderful means were busy creating money in borrowing from the captive RBNZ
thereby engineering massive New Ca$h in the economy for basically the same goods & assets out there ?

Of course *THAT* mysterious inflation wasn't reported as inflation either ..

but then values of the bricks & mortar, shares, land property and other assets got kicked upwards into the clouds ..

Has ROBERTSON woken up to what his antics caused & the results and where the buck lands for those fiscal deeds
or is he still making excuses trying to find more that can be blamed for the fiscal creation tricks & results of it ?

What will the next loads of dribble following such policies likely be ? - perhaps start sucking more of the excess created back in ?

Just to add to the increasing misery of all those the Govt inspired to borrow up big at low usury rates to buy homes etc
and shortly to be hit over the head with the increased Interest batton in what will likely be multiple times in future ?

Don't bother looking towards large wage rises for covering that - as we all know that could lead to opposite economic affects
in our hermit socialist kingdom (that dreaded "R" word .. or maybe not) ..