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A fair pay-rise not unreasonable

Written By: - Date published: 8:23 am, December 28th, 2009 - 10 comments
Categories: economy, wages - Tags:

An interesting piece on the SST yesterday:

English has warned public servants such as teachers and nurses not to expect pay increases that are “out of line with realistic expectations”.

“I think we will see quite a few sparks fly,” O’Reilly said. “Government departments are being told how much they can spend so you’re going to see an ugly budget from the perspective of government spending and that will impact people like the state sector unions, the teacher unions and so on. I wouldn’t be at all surprised if some of that was turned into industrial action.”

NZ Council of Trade Unions president Helen Kelly said O’Reilly was being “hysterical” but warned that public sector workers would not tolerate zero pay increases or cuts in services.

“We are ready for that kind of a year but we hope commonsense will prevail.

“It doesn’t have to be a nasty budget. I think the government has set out to create a misconception, in our view, that there is over-spending in the bureaucracy, but the figures they are using are misleading.

“Whether there is industrial tension or not will depend on what is in that budget.”

Kelly said although some senior public servants were very well paid, the majority were not and many, especially clerical workers and support staff in health and justice, were paid little more than the minimum wage.

When you demand that people do the same work (or more work, thanks National Standards) for less real pay, damn right that any person with self-respect will stand up for themselves. Only the weak bow down and take what the bosses hand them; the strong unionise and get a fair deal. It doesn’t have to mean industrial action, not if the bosses will agree to fair adjustments  – matching inflation at least.

Farrar says he hopes “common sense” will prevail. He notes that the economy grew just 0.4% over the past six months and concludes  “so pay increases greater than the rate of economic growth are not common sense”. Well, that’s a leap of logic and doesn’t stand – I didn’t see Farrar demanding wages match growth int he good times. The balance between wages and profits can just change if need be. But the real point is that he is playing maths games to fool the ignorant (again).  Farrar is implying that public servants’ pay rise for the last half year should have been just 0.4%, but the 0.4% growth in the economy is afterinflation. Inflation was 1.9% in the last six months. So,to get a 0.4% after inflation pay rise for the last six months, your pay increase needs to be 2.3%.

A pay adjustment to keep your wage inline with inflation plus wages, it’s not “out of line with realistic expectations”, it’s “common sense”, it’s 2.3% for the last six months alone.

10 comments on “A fair pay-rise not unreasonable ”

  1. Common sense also says we should stop borrowing $250M per week as well. So a pay rise is not justified AT ALL. Beaurcrats losing their jobs is also needed. The left gets ‘rights’ confused with ‘needs’. In a desert you do not have the right to water, you have a need.

    The irish have the right idea, pay cuts for beaurcrats, incl the PM. Rebel against that at your peril. Pay rates in beauracracy is too high already anyway.

  2. Draco T Bastard 2

    Wages should be adjusted with the CPI every quarter by law. This wouldn’t be a pay rise – it’s keeping the wages at the agreed level.

  3. Jenny 3

    Mike Treen of the Unite union makes a good case for the $15 an hour minimum wage.


    As Treen points out figures show that real wages have declined by 25%, while the tax burden has increased for the low paid and middle income earners while dropping for the wealthy 20% of top income earners.

    Currently the Greens and the Maori party are the only parties in parliament to support the Unite union’s campaign for the $15 an hour minimum wage.

    As is well known, the Labour Party when in government was vehemently opposed.

    Currently the Unite Union’s Citizen Initiated Referendum is lagging and is unlikely to make the target numbers by the deadline.

    One of the main reasons for this, is the lack of take up of this referendum by the Labour party aligned trade unions, leaving the Unite Union to campaign alone.

    Traditionally the Labour Party has been more “left” in opposition, worryingly this hasn’t happened this time.

    It seems to me that if the Labour Party wanted to put real stress on the Maori Party/National Party coalition. Labour would be well advised to change their position and publicly back this CIR and call on their affilliates to also back it. Not only would this address the increasingly desperate need, it would be a concrete way, for calling out the Maori Party and weakening the coalition.

  4. Darien 4

    Jenny : Labour was not vehemently opposed in government – it increased the minimum wage by $5 an hour during its term and around $8 an hour for under 20’s. Labour is supporting the $15 minimum wage. David Shearer signed it at the launch along with the Greens, and many Labour MPs have signed it since. By the way, Labour doesn’t call on its affiliates to support things – it’s the other way around.

  5. quenchino 5

    Yet when the banks, in pursuit of their own interests (ie profits and bonus’s) pump gross amounts of credit into the system, and asset prices inflate like crazy as a consequence (house prices doubling inside several years)… no-one says boo.

    There hasn’t been a hint of wage driven inflation for almost 40 years now, yet unions remain regulated to within an inch of their lives; the bankers get a 20% discount off their overdue tax bill.

  6. Richard 6

    What a wonderful term that is, the “zero wage increase”. When did it stop being called Sweet FA?

    • Draco T Bastard 6.1


      SFA = very little but it does have the connotation of actually being more than nothing which is a hell of a lot better than the wage decrease that the NACTs want public servants to have.

  7. handle 7

    When the bosses stop giving themselves hefty payrises and shareholders stop clamouring for higher profits and regular dividend payouts, then we can talk about lower-paid workers doing without pay increases. Not before.

    • millsy 7.1

      ..and landlords freezing rents, banks freezing mortage rates, power companies freezing prices, and so on and so forth.

      Every year low paid workers have to fight price increase after price increase, with what little they have.

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