Written By: - Date published: 8:59 am, March 18th, 2008 - 64 comments
Categories: assets, workers' rights -
Tags: assets, workers' rights
The recent scandal over Air New Zealand underpaying its Chinese workers to the tune of four times less than their New Zealand counterparts comes as no surprise given the sick management culture at our national carrier, and highlights some serious contradictions in the airline’s ownership structure.
Here we have a company that’s 80% owned by us, the New Zealand public, and yet because it is structured as a private company it’s allowed to act unethically and even undermine our national interests in the pursuit of short-term profit.
You will recall how Air New Zealand secretly ferried troops to Iraq in defiance of the New Zealand public, half-succeeded in gutting our high-skill, high-wage aircraft engineering industry, and has tried to cut the wages of thousands of Kiwi workers by contracting their jobs to third parties at lower rates and outsourcing anything that can’t be nailed down to low-wage economies.
It’s time we got some democratic control over our national carrier by bringing it into full public ownership and strengthened our labour laws to stop the airline undermining its workers’ pay and conditions.
Helen Clark shouldn’t be excusing Air New Zealand’s behaviour – she should be nationalising it.
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Matthew
The point was that some here seem to have an issue with people getting paid differently for ostensibly the same work with the same company. I was saying it already happened in NZ without any real concern – probably not to the same scale I expect – and Air NZ UK employees likely get more than NZ staff, so what is the real issue here?
It might be interesting to know what a China Airways crew member gets to compare, but I don;t think anyone is suggesting AirNZ are uncompetitive in the Chinese market.
I have no problem with AirNZ paying staff differently. As a multinational employee I was always resentful that my overseas staff got paid more than me, who they reported to. But that was just envy. I was doing very well compared to my NZ peers.
Of course Air NZ cabin crew based in London get paid reasonably more than their NZ equivalents who take over the same flights through to Auckland from LA and HK. The flights to and from Shanghai would not be economic if Air NZ had to pay the same wages as NZ crew as the flights are full of low yield Chinese tourists. So the route wouldn’t be Air NZs. A Chinese airline would take over, and it would pay Shanghai based workers less.
but then those who think nationalisation is a winner (hey the booming economies of East Germany and North Korea show how clever that is) are beyond reason and basic economics.
Presumably the Shanghai based crew chose the job voluntarily and in China’s booming economy could have gone elsewhere. I’m sure that’s “not the point”, yet in fact it is. These jobs are at the wages that have been agreed or these jobs are not Air NZ’s.
That’s the problem with libertarians, they equate any form of public ownership as akin to the worst excesses of Stalinism. Kind of makes debate futile.
Their insistence that jobs ‘belong’ to companies and entail no wider social responsiblity is also bordering on the psychopathic.
insider – I read a comment that Air NZ doesn’t pay all that well even W.R.T the Chinese domestic market, maybe being paid 1/3 of our rate is the norm over there. But to sum up my position – I think action by the government is necessary because their pay rates would be illegal in NZ.
libertyscott, you’re clearly beyond reason and basic economics if you equate Nationalisation of an airline already 80% owned by the Public with the despotism of sanctioned and embargoed North Korea or the tryanny of the former GDR.
Tane said: Funny how the right’s tone has changed on this over the last few days.
I obviously didn’t get the memo from the VRC. Unless of course we on the right are allowed to “come from a variety of backgrounds and our political views don’t always match up”.
Billy, clearly I was generalising. Apologies if you took offence, I’ll try to be more sensitive in future.
Billy – I think you mean “VRWC”. Getting stuff like that wrong really takes the zing outta your zingers…
Tane, you have supported nationalising any firm people have punted up on this thread (the Warehouse?) – this has been a failure wherever it has been carried out writ large, that was my point. In fact state owned Air NZ was a financial disaster in the late 70s, early 80s until government stopped interfering with it – and even then it was capital starved, but hey maybe you like a little airline.
Nice to see you and Matthew conveniently ignored the facts of the situation. Either the route is operated by Chinese crew hired by Air NZ or it is flown by a Chinese airline.
You also evade the fact that the Chinese cabin crew chose to work for Air NZ, or are you implying they were coerced or are they too stupid to take a job that they will prefer over the many others available in the booming Chinese economy?
Public ownership is a farce because as a member of the public you have no control over the accountability of the assets you allegedly “own”. You pay more taxes to bail it out when it stuffs up, and you always get a poorer rate of return than you would if you invested your own money elsewhere. You have politicians claiming it is strategic, while readily writing out cheques to prop it up.
libertyscott. East Germany hasn’t existed for nearly 18 years – so talking about it having an economy, booming or otherwise is dumb.
Steve, it was the past tense. The eastern part of Germany still exists and remains behind that of the west in per capita GDP.
LS – regardless of who owns Air NZ we will always bail it out. As a strategic asset that’s just a fact of life. There is no evidence that SOEs perform any differently over the long term than privately owned companies.
You’re on very shaky ground when you claim public ownership of companies “has been a failure wherever it has been carried out writ large”. Tell me, is NZ Post a failure? What about Solid Energy? Meridian? Landcorp? Learning Media? All were doing pretty well last time I checked.
Your problem is that your politics are constrained by Randian mythology. I suggest that in future you try forming your opinions based on facts rather than fantasy novels.
it wasn’t the past tense though. And, yes, eastern Germany is still poorer than the west but how does that relate to whether or not nationalising Air NZ is a good thing?
Tane, no need to be sensitive on my account.
Still ignoring you, ‘sod.
“Steve Pierson
Mar 18th, 2008 at 12:46 pm
libertyscott. East Germany hasn’t existed for nearly 18 years – so talking about it having an economy, booming or otherwise is dumb.
”
Kind of proves liberty scotts point now doesn’t it.
I look forward to Labour Releasing its “Lets nationalise the warehouse” policy.
I don’t think they’ll be releasing that MikeE. They don’t even seem to want to nationalise Air New Zealand.
LibertyScott – you’re also on shaky ground when you claim that these workers are free to work elsewhere. How many desperate peasants are there in China? Why do libertarians so desperately believe in the myth of freedom of movement? I guess because this flawed construct is central to the whole libertarian ideal – that people can simply up & leave a job if it’s not perfect, and that they should happily suffer with inferior employment because they ‘chose’ to work there.
I’ve always wondered how people with these beliefs manage to entirely discount the human incentive to improve their condition – maybe your shitty job is just that but why not aim to improve it? You might leave some day – wouldn’t it be good if it was better for your replacement? And you get to have a better time while you’re there. This is of course anathema to libertarians, but i’d like to think it’s part of human nature.
Nice to see you and Matthew conveniently ignored the facts of the situation. Either the route is operated by Chinese crew hired by Air NZ or it is flown by a Chinese airline.
No ignoring facts there – I haven’t said that the crew isn’t Chinese anywhere. In fact, on numerous occastions, I made mention of Chinese employees and so on. Perhaps you need to re-state that point…
And MikeE continues with the ‘any form of nationalisation is equal to tyrannic Stalinism’ line. Good on ya son, stick to your guns!
I guess you could look forward to the Super Great leap Forward and Smashing A Few More Olds policies, they’re equally likely.
Thats because any form of Natioanlisation is equal to socialism.
Not neccesarily Stalinism, but definately socialism by any definition.
I’m very interested as to the reasons why Tane would want to nationalise teh warehouse however.
Tane, would you care to explain.
As a side note, my captcha phrase is: “$100,000 snipers”
I’m interested to hear how you equate socialism with the totalitarian puppet-state in East Germany.
If this is the case, anyway, I assume that you advocate full devolution of the public sector into private entities as soon as possible; if any form of nationalisation is socialism, surely any public entity is representative of this monster, and is likely to turn us into East Germany? Roads, hospitals, schools, power infrastructure and generation – lose them all, before those NewCops become the StasiCops…
MikeE, I don’t want to nationalise The Warehouse, I just don’t have a kneejerk objection to the idea in principle like you do.
Matt, yes, as a libertarian (I assume you’re consistent Mike) he believes everything but police and the military (the means by which property owners shield their wealth from the masses) should be privatised. And tax should be zero because anything else is theft.
Honestly, this shit makes no sense whatsoever until you read Ayn Rand’s fantasy novels and discover that socialism is about hatred of the good and dragging the ubermenschen down to everyone else’s level. Apparently it’s great stuff if you’re into that kind of thing.
“MikeE, I don’t want to nationalise The Warehouse, I just don’t have a kneejerk objection to the idea in principle like you do.”
Weasel Words.
No, just a level of complexity unintelligible to libertarians and their black and white view of the world.
Tane “regardless of who owns Air NZ we will always bail it out. As a strategic asset that’s just a fact of life” Um no, YOUR government could have let Singapore Airlines save it, but you don’t need to bail it out. Alitalia is being bailed out by Air France/KLM, Switzerland and Belgium both lost national airlines a few years ago, and both have new ones. It isn’t inevitable.
Matthew – so people in Shanghai are desperate peasants? Ever been there, or have you some rather patronising attitude about China that says Chinese people are mostly peasants? Funnily enough I DO believe people can improve themselves and seek it, and leaving your job is one way to do it.
I don’t disagree with “I’ve always wondered how people with these beliefs manage to entirely discount the human incentive to improve their condition – maybe your shitty job is just that but why not aim to improve it? You might leave some day – wouldn’t it be good if it was better for your replacement? And you get to have a better time while you’re there. This is of course anathema to libertarians, but i’d like to think it’s part of human nature.” except it is hardly an anathema. My main point is people have to make choices either to stay, leave or renegotiate their pay and conditions. In this respect I don’t disagree.
I have a kneejerk opposition to nationalisation on one simple basis – it is theft. Privatisation of existing state owned enterprises can be done more delicately, and is about trading off price, ownership structures and how it is done. Giving shares to the public would be to me, a particularly good way of creating genuine public ownership.
Then people can choose whether they want public ownership or not, would’t that be interesting? Does everyone want to own shares in a coal mining company? I suspect plenty of environmentalists would rather not, unless they saw value in buying up shares and shutting it down perhaps. Imagine – people using their own choices rather than the state to change things!
My previous point was this:
- The Air NZ routes from Auckland to Shanghai and Beijing are low yield routes that would not be profitable if all crew operating them were on NZ salaries. Therefore without Chinese crew at good Chinese wages, the routes would not exist given fares that Chinese tourists (who form 90% of the passengers) pay (Air NZ pulled out of South Korea because it couldn’t compete with Korean Air on fares).
- If Air NZ pulls out, a Chinese airline is likely to fill the gap since they pay less than Air NZ, so Air NZ loses.
In other words if you want Air NZ to operate the routes to China then this is what must happen, otherwise it becomes a Chinese airline route.
Tane, do you employ people? If you do, then I am certainly like to see how much you pay them. C’mon, you’re not gonna default standard argument as the market rate? Sure, if you employ people, I don’t expect you to be paying your laborers/office workers a rate of $200/hour. If you pay them around the market rates, then that’s exactly what Air NZ is doing? Unless you want Air NZ to become a Santa Claus, exactly the same thing if it is your private business. Would you like to employ a laborer and pay him/her $200/hr simply because you don’t care about market rates, but because you want to be Santa Claus?
“Honestly, this shit makes no sense whatsoever until you read Ayn Rand’s fantasy novels ”
Interestingly enough, the shelf behind my desk right now includes a copy of ‘Atlas Shrugged’ which was left behind by a colleague in the last office-reshuffle… with a glowing endorsement like that from Tane, I might just have to hunker down with a coffee and see what all the fuss is about.
left behind by a colleague in the last office-reshuffle
One can only hope they took their “reshuffling” well – it being a natural outcome of the market and all…
We’ll establish whether you’re a Stalinist, Tane, with answers to these questions:
1) Who should own the invention: the inventor who toiled to make the discovery or the public who did nothing?
2) Who should own the production of the invention: the investor who risks his money or the public who risks nothing?
LibertyScott – China’s breakneck growth has been, by and large, due to a relatively low starting point – and their rural poor (I’m using their terms, not ours, for you to call it patronising displays quite an ignorance) are very prolific. Many make it to the cities, study, get jobs. This has been replicated throughout the last three centuries as a rural-urban drift follows an increasing disparity of wealth in urban areas.
I haven’t been to Shanghai. Have you been on every single flight between Shanghai and Auckland or are you making assumptions about the people who travel on these flights? might I mention that you’re implying their flights need to be subsidised by low-wage labour due to the relative lack of income of the inhabitants of Shanghai, not I… Bit patronising there, chief…
I’m not sure how you’ll qualify Nationalisation as theft – if the Government purchases, at a market rate, the remaining stake of Air New Zealand, they will have achieved this. It’s no different to a corporate takeover, but the buyer is different. So you’re pretty much saying the free market and capitalism is also theft. Hey – we almost agree!
except it is hardly an anathema. My main point is people have to make choices either to stay, leave or renegotiate their pay and conditions. In this respect I don’t disagree.
Except it is, libertyscott – the libertarian response to someone in poor working conditions is “they chose to work there. It’s their problem”. That’s what you said yourself. This ignores reality, paints a black-and-white picture, while pretending to dress up as an ethos of ‘personal choice’. Abhorrent.
You seem to discount the possility of improving working conditions. Unless there are favourable conditions, such as very low unemployment, the workers are at an inherent disadvantage given the problems of leaving work. This is wheremany on the left see that a government or state should step in – gently, with subtle employment law, or forcefully if the situation demands it. If the worker is not at any disadvantage, you don’t hear calls for intervention.
Your idea of public sale might sound nice and warm in theory, but it demands perfect information for every consumer, and an ability to predict what every other actor will do. If it is in NZ’s best interests to publicly own a resource, for this to happen every New Zealander would need to buy an equal stake and be confident that every other New Zealander would do the same. No practical relevance whatsoever.
Giving the shares to the public is equally useless – without everyone having perfect information it can’t work. You may think it sounds elegant, but reality dictates otherwise.
Afraid to lift your skirt and answer the question, Tane, lest you expose your Marxist socks?