Written By: - Date published: 2:24 pm, December 13th, 2007 - 62 comments
Categories: same old national, workers' rights -
Tags: same old national, workers' rights
I see National’s complaining about the wage gap between New Zealand and Australia again. As usual they have no answers on what to do about it other than to blindly hope that tax cuts for the rich will lead to economic growth and somehow it’ll all trickle down into the ordinary worker’s pay packet. Ever feel like someone’s trying to sell you a dud for a second time?
Because as anyone who lived through the 90s can tell you, National has a shameful record on wages, as this graph of median wage growth shows:
The reason for this is simple. When National and its allied employer groups introduced the Employment Contracts Act in 1991 it was deliberately designed to reduce the ability of workers to bargain for better wages through their unions. This was done in a number of ways, but one of the most effective was its restrictions on the ability of unions to negotiate collective agreements across an entire industry.
This meant each collective agreement had to be negotiated on an enterprise (site by site) level, which both moved the balance of power firmly towards the employer and encouraged companies to compete against each other on labour costs. The result was a race to the bottom. Workers lost conditions, wages stagnated or fell for the majority of workers and collective bargaining was largely replaced by the market. Productivity suffered as the low cost of labour made capital investment uneconomical.
So when National talks about the need to lift wages and improve productivity, just remember who it was that slashed Kiwis’ take home pay in the 90s and put us in the position we’re in today. And don’t for a second think they wouldn’t go back there if given half a chance.
The challenge now for Labour is to finish the job they started in 2000 and strengthen the Employment Relations Act to restore effective industry bargaining. Wage growth has improved under the ERA, but it’s not nearly enough if we want to catch up with Australia.
As Council of Trade Unions economist Peter Conway points out, leaving it to the market alone hasn’t worked:
“New Zealand now has a structural problem of low wages, and the 30% wage gap with Australia will only be closed through more widespread industry wide collective bargaining, supported by ongoing improvements in productivity.
‘Wages were broadly comparable with Australia until the late 1980s, but then fell to 60% by 2002, according to Treasury analysis.
‘Similarly, in 1978 New Zealand and Australian workers had about the same amount of capital per hour worked but by 2002, capital intensity in Australia was over 50 percent greater than in New Zealand.
The CTU agrees that lifting productivity is essential to lift incomes on a sustainable basis. However this must be accompanied by effective measures to ensure the benefits are shared, with a strong minimum code and effective industry bargaining.
The next election may well be fought on the wage gap between New Zealand and Australia. It’s up to Labour to show the electorate which party’s really looking out for the interests of working New Zealanders.
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On the subject of increasing NZ pay…
We should not forget the manipulation of the unemployment rate upwards, resulting in worker versus worker competing for jobs. This is an excellent tool to control escalating wages.
Similarly, the diary industry is a bigger contributer to GDP in NZ. I’ve seen it quoted at 7% for Fonterra alone.
Makes me wonder why Cullen gets away with statements like this
Well if we had the kind of natural resources they have we’d be digging them up and exporting them to Japan and China as they do and getting the kind of growth that they’ve had
Just trading on public ignorance I suppose.
Tane
Pledge to do better as NZ slips back
So Tane, just how is this graph representing the big picture in NZ?
DS – you’re citing an agenda transcript I see. That’s some nice work bro, but just outta interest did you come up with the quote first and then frame the dairy angle around it or did the dairy=natural resource=mining angle come first and the quote follow?
Robbo – you are getting boring. Perhaps another curry? It might help you have an original thought or two.
PB – no, not a ploy to get a response. Just an feeling that some standard plonker would likely respond in that way to that bit of the post and completely ignore the rest of it. Have you ever heard of self-deprecation? I guess not. Why don’t you go defenestrate yourself?
DS – it was a kebab you fool. Now you’ve bored us all to tears lately and we’ve answered you. How about a little reciprocation?
Curry/Kebab who cares?
Here’s a link that might help you understand
http://www.monpa.com/wcp/documentry.html
So you do have a sense of humour. Nice diversion bro, but it still doesn’t answer my question. Here’s an easier one: how’d you come across the agenda transcript anyway? Actually more to the point – why were you looking for it?
roger nome said:
“Sweet – at the risk of appearing to be self-promoting i’ll post a couple of links that may answer some of you questions re-Australia vs NZ.”
Have you remembered to include tax rates in those posts roger?
Mike, why do you use the name Robinsod?
Robinson was my Grandmother’s maiden name. I changed it to Robinsod after “Robinson” was disabled on KB – it was funny at the time because it is only one consonant different and “sod” is a funny word. See how easy it is to answer a simple question.
Now, why do you refuse to call me by my handle and instead use my real name?
Well Mike, I like to think I’m a friend of yours so I thought I’d use the name your mates call you.
‘Sod’ – Yeah man, that IS pretty funny.
Ha ha
Ha ha
Um dude – between that comment and your handle you’re sounding a little creepy. Oh, and you’ll never be a mate of mine, even I’ve got standards higher than that so you better start calling me “robinsod” again. Sorry.
The Prophet has appropriated a very auspicious handle, but methinks that Khalil Gibran would not approve…
So Mike – you don’t want to be my friend? Oh, thats sad. I quite like callng you Mike though, so I hope you don’t mind if I continue to in our future conversations.
The “even I’ve got standards” comment is much funnier than ‘Sod’ by the way
Bahahahahaha.
Rob – KG is dead mate, he won’t care.
“Rob – KG is dead mate, he won’t care.”
False Prophet, I don’t think your words will be remembered as long as his.
Ok Prophet – If you’re gonna be my mate we should probably catch up and make it official. I get the feeling you’re a Wellington boy so you should ring me, my number’s in the book and it’s a local call. Or if you want you can email me at mickyporton[]hotmail.com
I reckon we’ll get on like a house on fire.
Are you asking me out on a date Mike?
Damn straight Prophet. I figure clever fellows like you and me would hit it off real well. We should have a beer or something. I’m thinking the Bristol – I’d say that’s probably not too far for you to go. I don’t want to post a time up here though ‘cos there’s like y’know some odd people on line. How about you email me at mickyporton[]hotmail.com?
“Have you remembered to include tax rates in those posts roger?”
No – not sure how you would – they have property taxes and stamp duties that NZ doesn’t. Mr Farrar and the rest of the Nat research unit never seem to take these into account so their figures are always flawed.
Phil, Roger Nome and TDS – i was looking at this: http://kiwiblogblog.wordpress.com/2007/12/13/what-do-the-indicators-indicate/
and noticed the WA stats were much higher than the rest of aussie. Reckon that could be because of mining?
If so, then NZ having WA’s resources would have quite an impact! Mebbe Cullen ain’t so dumb after all…
THE BRISTOL – Fuck, I wouldn’t be seen dead in a joint like that.
How about Liks?
Prophet. Ring/email me.
Mat Pilott:
WA only represents about 10% of Australia’s population. Nuff said?
BTW – while not being overly significant in terms of wages, the mining industry certainly could be considered an important part of Australia’s export industry – remember, most GDP in Aus is accounted for by goods and services produced locally for domestic consumption. So while the mining industry only represents 3-4% of GDP in Aus it might comprise something like (at a guess) 10% of export $. So it certainly is important for the Aus economy in terms of balance of payments (i.e. stopping capital from leeching oversees).
At 0.2% growth per annum, how long will it take for OUR economy to double in size compared to an economy that is growing at 0.6%, or at 6.0%?
0.2% is PISS-POOR. NO-ONE is going to get the increases in wealth, living standards, and social services that we WANT and feel entitled to because we’re a “first world” nation. Yeah right.
PhilBest, bash yourself once more with the ECON101 book yeah?
Do you seriously think that our economy is growing at 0.2%??
Roger Nome mentioned that our economy is growing at a rate 0.2% slower than that of Australia’s. Unless Australia’s economy is growing at only 0.4%…
With knowledge like that, I can see why you imagine New Zealand isn’t a developed (you used the backwards “first world”) nation. BTW Have you ever been to a developing nation?
Roger Nome – what I meant is that if NZ had WA’s resources, while it cotributes only 3-4% of Australia’s GDP, that would be a far greater percentage in NZ.
That would make Cullen’s comment accurate – the one TDS thought was clearly wrong…
Very interesting graph, although perhaps for completeness it should be extended back to 1984 to show what happened during the Douglas Regime. This is not an argument that the ECA was not detrimental to wage conditions, rather an attempt to ascertain what kind of position the National government inherited in 1990