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Are you worth less this year?

Written By: - Date published: 10:40 am, September 21st, 2009 - 42 comments
Categories: Unions, wages, workers' rights - Tags:

Right now, spurred on by the hypocritical words of Bill English and John Key, employers in the public and private sectors are saying they can only offer a 0% pay increase this year – and many are trying to cut conditions like redundancy and overtime.

0% is a pay cut. The cost of living went up 1.9% last year. If your wages don’t go up that much, you’re going backwards.

What you’ve got to ask yourself is ‘am I worth less than I was last year?’

I bet few of you answered ‘yes’. Most of us are probably more productive for each hour worked than we were last year. So why should we be paid less?

Don’t fall for the ‘we’re in the middle of a recession’ bollocks. You’re producing as much wealth as you were last year, probably more, therefore, you have the right to at least as much pay in real terms. Anyway, I keep hearing the recession is over already so they can’t keep trying to use that excuse to hold us down.

It’s not like asking for a cost of living adjustment is going to break the bank. The companies’ and the government’s revenues go up with inflation, why shouldn’t your wages?

Besides, as long as Bill English is allowed to stuff his pockets with allowances worth the the same as a typical workers’ total income, which he isn’t even eligible for, I don’t see why we shouldn’t get a basic cost of living adjustment. It’s only fair.

The good news is that the unions are winning at least cost of living adjustments. The Police Association just won 2% in arbitration (that is, a court decided they had the better case asking for 2% than the government did arguing for 0%). That has opened the door for other public servants to demand the same. In the private sector, too, the workers who have stood strong and said 0% isn’t good enough are getting more. The Metals MECA, which covers thousands of workers across hundreds of small manufacturing businesses, recently settled for 2% plus redundancy protections.

But it doesn’t happen by magic. Left to their own devices, the bosses will give you 0% and tell you you’re lucky to have a job. If you want more, if you think you’re worth as much as or more than you were last year, you’re only going to get it as a member of your union.

42 comments on “Are you worth less this year?”

  1. Jasper 1

    I’ve heard the following in use to argue for a payrise, and is actually quite good as it has resulted in several pay rises being granted to people I know who were previously faced with 0%.

    “Economic circumstances may have changed, but business practices haven’t. Ergo, the business practices being followed must still be dictated which includes minimum pay rises, as CEOs and senior managers are still receiving pay rises, along with the company increasing prices in line with inflation”

    A bit hard to argue justification for 0% to lesser employees with that certain statement being presented to employers.

    fwiw: I don’t think the recession is over – yet – as Wednesdays figures may yet still be negative. I do think that there is a lot of “talk up” taking place to encourage consumers to spend as this will get us out of the recession faster.

  2. Greg 2

    I think this post highlights the difference in mentality between the employee and the employer. The employer expects the employee to be constantly improving, when they improve over and above this expectation they generally receive a pay rise. The employee on the other hand, expects a pay rise for any improvement made. You see the difference?

    • snoozer 2.1

      So, you’re saying that if I produce as much this year as last I should get paid less? And the boss keeps the difference? Because that’s what happens if I get 0%.

  3. ieuan 3

    I think ‘am I worth less than I was last year?’ is the wrong question.

    The right question is ‘is it acceptable to have a decrease in my standard of living?’.

    The effects of the recession are not even across all sectors of the economy so the ability to pay an increase will depend on the performance of the particular industry the person is employed in.

    • snoozer 3.1

      No. I’m still producing as much wealth as last year, why should I get a smaller right to consume wealth? (money of course is a right to consume production)

      • Rob A 3.1.1

        Sorry but no. A good friend of mine works for one of the smaller dairy companies (no OCC!!!) making milk powder. They way the prices have collapsed means that he is making no where near as much wealth as he was 12 months ago.

        • snoozer 3.1.1.1

          He’s still producing the same amount of milk powder isn’t he?

          • Rob A 3.1.1.1.1

            Sure he is, if not more. But its worth far less, thus he’s creating less wealth for the company. They have had a pay freeze this year but by the sounds of it people there understand the situation and are willing to take the long term view and hope the companies promises to see them right when things pick up are true.

            • snoozer 3.1.1.1.1.1

              Your mate could hope the company sees him right, rather than just pocketing the money in the good years and cutting his wages in the bad years. Or, your mate and his coworkers should agree a collective with the employer that has pay increase (perhaps contingent on higher prices) written into it.

              The company is still making a profit (it is, all the dairy producers are), so why should your mate get poorer?

              The company took the lion’s share of the boom in prices, it can absorb the lower prices now, rather than your mate and his family being made poorer for doing the same work.

  4. StephenR 4

    No. I’m still producing as much wealth as last year,

    What if people are buying less of this wealth you’re producing? i.e. the factory you work for is selling less than last year.

    • snoozer 4.1

      well, I’m not in a factory. I still produce as much as last year (more actually)… my level of consumption should equate to my level of production, shouldn’t it? I mean that’s how you justify million dollar salaries for CEOs, because they ‘create’ so much wealth.

      So, if I’m producing the same wealth I should get to consume the same wealth and that means a cost of living adjustment to my wages.

  5. Scribe 5

    Stephen,

    That’s the question some people are unwilling to answer.

    If a company is making less money because of a recession, how is it going to pay its staff the same — or more, if there are demands for pay increases — as it did last year? It’s just not possible for small businesses, which hire the majority of Kiwis but are making small profits in good times.

    • snoozer 5.1

      actually, most Kiwis are employed by a small number of large employers. http://www.med.govt.nz/templates/MultipageDocumentPage____3187.aspx SME’s make up the largest number of employers but they employee relatively few people each (by definition). Operations like Air NZ, Telecom, the Power cos, Fonterra, and biggest of all being the State are the big employers.

      when you get that kind of basic wrong, it kind of blows your entire position.

      The State and most large companies had a nominal increase in income last year and found money for their CEOs, so surely can afford to give their workers a nominal increase in line with inflation.

      • Scribe 5.1.1

        Snoozer,

        You’ve linked to stats that prove my point, yet you’ve claimed they refute it.

        According to your link, more than half the workforce, i.e. the majority, work in companies with fewer than 50 employees.

        It’s one thing for someone else to make you look silly. You’re doing it all by yourself — making yourself look silly, I mean.

        • snoozer 5.1.1.1

          SMEs by definition have 20 or fewer workers. Christ, how can we have a conversation when you don’t even know this stuff?

          • Scribe 5.1.1.1.1

            Really? Try telling that to the New Zealand Centre for Small and Medium Enterprises Research

            http://sme-centre.massey.ac.nz/

            in New Zealand, our 350,000 or so SMEs make up more than 99% of all businesses and account for about 60% of employment. The SME sector broadly covers micro-enterprises (fewer than 5 staff), small enterprises (6-49) and medium enterprises (50-100)

            Is this a common occurrence, you embarrassing yourself? Two attempts to discredit what I’ve said only to make yourself look stupid.

            Own goal. Epic fail. Call it what you like.

            Leave the grown-ups to talk about how businesses actually work rather than trying to financially cripple the employers who keep this country prosperous.

            • snoozer 5.1.1.1.1.1

              Personally, I go with the official definitions:

              http://www.med.govt.nz/templates/MultipageDocumentPage____23123.aspx
              “Defined, in New Zealand, as enterprises with fewer than 20 employees, SMEs account for 96 percent of enterprises, 30 percent of employment and 38 percent of output. The average SME has four to five employees.”

              It’s not surprising that an SME research centre, whose whole existence is premised on making SMEs sound important, would use the broadest definition it could make up. It is surprising you got suckered in when the official definition is so easy to find.

  6. Shane 6

    Great piece!

    I would just add to the end of it something like “And if you’re a freeloader, you’re like that person who always goes to parties but never brings any drink (or a plate if guests are asked to bring one!).

  7. SJ Hawkins 7

    You are suggesting that “The companies’ and the government’s revenues go up with inflation, why shouldn’t your wages?”
    In respect of private companies, what if their revenues fall for any reason? By your logic are you suggesting workers should take a pay cut in that scenario? Because if you’re not then you’re advocating a ratchet effect that means wage to revenue ratios can only ever go up and not down.

    • snoozer 7.1

      This is about nominal increases in wages to reflect nominal increases in the cost of living and in the prices which employers get for the products you produce as a worker. It’s not a real terms increase.

  8. Galeandra 8

    Let’s inflate prices/earnings/bonuses and deflate worker’s salaries and expectations. Japan tried this and it worked a treat in the 90’s so surely we should try it? Soon we’ll all be able to afford crayfish,oysters and cheese again.

  9. Pascal's bookie 9

    It isn’t even Alanis ironical that when John Key said he’d love to see wages drop, there were folks a plenty saying that it was obviously a mistake because no one could possibly mean that.

    And yet, and yet. When discussing the exact secnario John was responding to, all of a sudden a drop in real wages is the obvious place for the burden to fall, and it’s just silly old class warfare or whatever to suggest otherwise.

    • felix 9.1

      …it was obviously a mistake because no one could possibly mean that.

      It occurred to me at the time – and does again now – that the inability to parse Key’s statement was/is either a testament to the naivety or the altruism of the kiwi psyche.

      It offends our sense of altruism to think anyone would want wages to drop, but it’s naivety if we didn’t realise that it depends whether you’re the one paying the wages or the one earning them.

      Key meant exactly what he said and he’s proving it every day. If anyone is still in any doubt about his choice of words then it’s beyond naivety.

  10. Gordon Shumway 10

    Typically, Eddie forgets that the labour market is exactly that, a market.

    The reason why wages will not rise is that there is excess supply of labour and decreased demand for it.

    The productivity issues have less of an impact on the cost of labour. If you think you’re being undervalued, then piss of somewhere else where you get appreciated fully, you poor baby. Even better, go set up a business and pay everyone what you believe “true value” to be.

    If current “underpaid” employees want to take the risk of throwing themselves on the job market, then perhaps that will pay off with an increased salary. On the other hand, it might also be a lot of wasted (and unremunerated) effort going to job interviews, etc.

    It’s that simple: supply and demand. In a recession, most people are happy to stay employed. My pay has not risen for at all for 18 months now and I consider myself fortunate.

    • snoozer 10.1

      I don’t think anyone’s forgetting that the labour market is a market but the point is that if you want fair pay you need bargaining power.

      As an individual worker, you’re effectively a supplier in perfect competition – a price taker, which allows employers to set wages at the lowest rate which will get them the amount of labour they need.

      By unionising, you stop being a price taker and get to bargain instead, using the pooled power of you and your workmate’s ability to withdraw your labour. Rather than the compnay getting to hold the maximum amount of profits, it instead has to share with you and you get a fairer return for your labour (what’s fair? an income that allows you to supply a decent quality of living for you and your family in return for a decent day’s work, that’s unlikely to be the minimum that the boss can get away with paying you).

      • Gordon Shumway 10.1.1

        I don’t disagree with a word you’re saying about unionising and the way it increases bargaining power. I certainly wasn’t posting against unions or their efforts for workers.

        I am, nevertheless, still amazed that Eddie – who I assume based on previous posts is or has been active in unions and therefore plays a role in the direction of negitiations – believes that pay must always rise no matter what or else it’s an indication that the worker is getting screwed.

        Eddie’s commentary is always high on rhetoric and devoid of analysis. Seriously, WTF does Bill English have to do with the issue of whether worker salaries should automatically rise even in a recession? It’s populist ranting without any sort of substance at all.

        The world is a changeable place and, frankly, almost everyone has taken a hit in recent times.

        The mantra should be – suck it in, work hard, keep your job.

  11. BLiP 11

    My pay has not risen for at all for 18 months now and I consider myself fortunate.

    So – the answer to the question posed by the post, in your case, is Yes. You’ll be pleased, then, to know that’s there plenty more coming for you to be grateful for.

    • Gordon Shumway 11.1

      No BLiP. I am not necessarily “worth less” or “worth more”, but I’m sensible enough to know that my “worth” is affected by wider business conditions (if by “worth” you mean whether or not I get a payrise this year).

      There’s been a recession on, you know. My employer is making significantly less money than in previous years. If I think that doesn’t affect my pay, then I am an idiot.

      I am not stupid enough to use my salary (or last salary rise) as any sort of indication of my inherent “worth”, my productivity, or indeed how well I’m doing the particular job I’m currently employed in.

      My salary reflects what the employer was prepared to pay for me when I was first offered a job, together with any rises that they’ve given me to stop me looking elsewhere.

      • Maynard J 11.1.1

        If you do not think your salary was not offered (when you were first offered a job) based upon your productivity then what exactly do you think your employer is basing your pay on?

        Are you really trying to deny any causal link between wokplace productivity and wages?

        “I am not stupid enough to use my salary (or last salary rise) as any sort of indication of my inherent “worth”

        So a salary is not what you are worth, but what your employer pays.

        A bottle of coke is not “worth” $2.50, but that just happens, by coincidence, to be what is paid for it? In this case, the price is determined not by supply and demand, but by the perceived utility to the buyer. Why do you not think this is the case with the labour market (with a few more complications…

        I think that in your haste to dish out childish barbs to BLIP you left your sense at the door.

        • Gordon Shumway 11.1.1.1

          Maynard – Productivity is not a “cause” of salaries for any particular job. The “cause” is a bunch of employers offering a particular pay and enough employers accepting it.

          When my employer offers my starting salary they have no idea what my ACTUAL level of productivity will be. They have a maximum limit that they can pay which is influenced by expected productivity of course, but ultimately they will pay the lowest amount below that max cap at which I will accept the job.

          Thereafter, raises are of course influenced by productivity gains (i.e. the “cap” amount will rise if productivity rises), but raises will always remain influenced by whether or not they still need ME to do the job.

          Finally, to answer your questions:

          Yes, if i am “producing the same” but being paid “less” (because world prices have risen), I can still be grateful.

          Why?

          Because instead of looking only at those who get paid more than me (or who have been lucky enough to get pay rises despite the recession), I look at people who are unfortunate enough to be without jobs, or live in the third world, or whatever, WHILE THE WORLD IS IN A FUCKING RECESSION. It’s not a zero sum game. I don’t have to “improve” every year of keep up with every other player in the market economy. It’s foolhardy to try and do so.

          I realise, however, that my pay depends ENTIRELY on whether or not I work for a profitable business. If my employer suffers too many months without profit, then I have get NOTHING no matter how “productive” I am willing to be. My job isn’t a question of theorectical productivity – it’s a question of whether my ACTUAL employer remains solvent during this ACTUAL recession.

          You guys are fuitloops running the line (as you appear to be doing) that the recession should not affect your current pay. It is not a “fallacy”, it’s totally obvious.

          And BLiP, I am certainly not spineless — are you another batshit stupid, whining grinder whose envy and lack of perspective guarantee you a life of underachievement?

        • Gordon Shumway 11.1.1.2

          Maynard – In your example, you’ve allowed the “worth”/price of the Coke to be determined by supply and demand, but you’re not letting the same happen for the “worth”/price of labour.

          For labour, you want to set the “worth”/price based on what the end-user (i.e. the employer) gets out of it (or the “employer’s productivity”).

          That’s like saying the price of the Coke should be determined by its deliciousness, is it not?

          • Maynard J 11.1.1.2.1

            “In your example, you’ve allowed the “worth’/price of the Coke to be determined by supply and demand, but you’re not letting the same happen for the “worth’/price of labour.”

            I said the exact opposite, read again.

            “For labour, you want to set the “worth’/price based on what the end-user (i.e. the employer) gets out of it (or the “employer’s productivity’).

            That’s like saying the price of the Coke should be determined by its deliciousness, is it not?”

            Ditto. Supply and demand are economic concepts that are actually fairly well removed from everyday transactions – they form a simplistic concept from which economic realities are elucidated.

            Despite your attempt to patronise me by reducting a concept such as marginal utility down to a frivolous term (deliciousness), that is exactly what is going on. Where do you think demand comes from?

            Now, remove that preconception of my idea, reapply the actual idea to your assessment of the labour market and you might start to get a view closer to reality, and more removed from a simplistic theory-based view that is not worth the bandwidth it took to type it out. (hint – it is not just supply and demand)

            I do not know when you started addressing BLIP, but can only assume it is before the questions, since they bear no semblance to anything I asked.

            And quit the shouting please – I know you think we are idiots, yet we manage to retain some sense of decorum.

            Regarding the general idea of the post – the main idea to take out of it is that the recession is too easily used as an excuse, and that is not right. For example, dividend payouts are remaining steady, yet wages are falling, and unemployment is increasing – what does that tell you?

            Why should workers suck it all up – you have some choice vulgarities to dispense to BLIP but you seem to be the one happy to get on your knees and kowtow your betters. Show a bit of spine and you might not have to wait 18 months for the next pay rise. Given you have shown yourself to be so ‘flexible’, it may just be longer than that. I am not going to take no for an answer like you are happy to, but hey, maybe I am just another batshit stupid envious underachiever.

            • Gordon Shumway 11.1.1.2.1.1

              Maynard – I know what marginal utility is, thanks. An economics education is not that unusual.

              The inherent “worth” of Coke is demonstrated by what consumers are prepared to pay (and Coke Co is prepared to sell) in the then-prevailing circumstances. You don’t come up with a scale showing “enjoyment”. Price tells us what the buyer values the enjoyment at. The same applies to labour.

              How is marginal utility of labour demonstrated if not through what the employer pays the next new employee through the door? Marginal utility doesn’t “set” demand for a coke. It’s a way of measuring what people will pay for the Coke by trying to put a $ value on their enjoyment. Their enjoyment (and demand for Coke) depends on millions of frankly unmeasurable things happening in the market – hot.cold day? advertising? competitor availability (Pepsi)? fashion? etc.

              The original post focuses on one tiny aspect affecting labour market (i.e. worker productivity) and ignores all the others. That’s batty.

              You guys are ones getting it back to front and saying “I believe I am ‘producing more’ now so I am automatically entitled to get a pay rise” (totally ignoring the context of the surrounding market conditions, which do affect the employer’s assessment of ulitity from additional labour).

              Two situations:

              1. Jobseeker A, in a red-hot growth phase of the economy, turns down $15 an hour because he knows he has three other offers at $16.

              2. Jobseeker B, with his mortgage costs rising, knowing that no-one else is hiring, is offered $14 an hour and happily takes it, because if he stays unemployed then he loses his house.

              Eddie’s post, together with many of the supportive comments, seem to be trying to argue against the obvious – circumstances matter. The circumstances at present are a fucking great big recession.

              So I stick by what I say. Firstly, your own assessment of your own “productivity” means three fifths of jack sh1t in terms of setting pay. Secondly, wider economic conditions certainly play a part because they impact on each party’s decisionmaking in deciding at what price to buy/sell labour. And finally, anyone who believes it’s lack of “spine” to aggressively seek payrises in a depressed economy needs psychiactric help.

              Finally, if you read back my first response to BLiP, you won’t find any vulgarities at all. No need to play white knight I’m sure BLiP can look after himself after starting the name-calling.

              [Use of CAPS is obviously not shouting – intended for emphasis of particular words to help clarity.]

            • Maynard J 11.1.1.2.1.2

              Learn Internet, Gordon. Caps is shouting. I can read without your emphasis, though if you really need to you could learn to use basic HTML tags. And while you are at it, again, learn some common decency. It is possible to have a conversation without inferring that people have mental issues, are inferior to you, are losers. It is just plain obnoxious, and makes you look like someone old enough to know better with the king complex of a toddler.

              Speaking of ignoring the wider conditions, why do you insist upon using the recession as the only relevant factor when you are talking about wage or salary increases? If ‘the left’ is blinded by only looking at productivity, at least it is a reference to something directly relevant to their income, as opposed to some blanket cop-out of an excuse that you are using (or your employer has on you).

              And I am not “aggressively seek[ing] payrises in a depressed economy” as you put it (where does this anger come from?), not taking no for an answer eans wanting a decent reason, not ‘there’s a recession’. So what – has that affected where I work for? Have dividends dropped? What about leadership payrises? That is more relevant.

            • Quoth the Raven 11.1.1.2.1.3

              Gordon – I recommend this:

              Those small words, in the free market, are most important because without them, the argument fails and is utterly false. Can it really be “voluntary’ to choose only from shitty jobs in a regulated economy where most work options have been made unavailable and a job is necessary to generate monetary income to pay taxes? I say it is not. Even if you make the choices yourself, it cannot be considered a voluntary choice to pick a least bad option from the options remaining within a suffocating framework of coercive measures.

              Of course, the choice itself is voluntary and in that sense the rationalist logic seems applicable. But the choice is still made in an environment where most choices have been coercively done away with and where the chooser is restricted from making the choices he or she should have made were it a free market. It is like saying you have free speech only you cannot speak of X, Y, Z or A, B, C, D, E, F, G, H, I, J and K. That is not free speech it is regulated speech, and what you choose to speak of necessarily depends on what you aren’t allowed to speak of.

              Free market arguments are simply not applicable to the real world as it is. They are only applicable as arguments for the superior functions and mechanisms of the free market. And the free market itself is a great standard to which the real economy can and should be assessed to make clear its inefficiencies and injustices as well as providing an outstanding alternative. You cannot, however, make your own mix of the two; using free market logic to argue for low salaries and bad working conditions in contemporary state economy is simply a mistake.

            • Gordon Shumway 11.1.1.2.1.4

              Maynard – stop being so precious. In your first contribution to this stream you said I had “left my sense at the door”, so you’ve got no grounds to at to start playing at being pious. You dish out the insults so often you don’t realise you’re doing it and your writing style is one of the most pompous and condescending around here. Perhaps I thought speaking your language might help the message get through?

              You’re giving up now on the economics and concentrating solely on playing the man. So I don’t know to write Italics – bite me.

              You’re not even trying to understand the arguments now. I am not using the recession as the ONLY factor in setting wages. I am strongly arguing against a position that seems widely supported on here, which is that the impact of a recession is a “fallacy”. Eddie’s post in based on the premise that “productivity” is somehow the main (or determining) factor in setting wages. That’s clearly and demonstrably wrong, no matter how hard you try to argue the toss.

              It’s also, I would have thought, a dangerous position for the Left to take. Do you really believe, when there’s a renewed demand for labour, it would benefit workers if the economic orthodoxy was that wages should rise with productivity increases?

              Recession is of course only one factor when employers consider how much labour to take on and what they are willing to pay for it, but it’s a pretty fucking big factor and should be recognised as such. We’ll have to agree to disagree because you continue to miss the basic point – “there’s a recession on” IS a decent reason when employers decide not to hire new labour or pay more for existing labour.

              Where does my anger come from? You base that on what, use of the word “aggressive” on an internet forum? What a stupid statement. There’s absolutely no anger on my part – as I said up front I am delighted to remain in paid employment in the current environment and regard myself as fortunate. It’s you guys who want me to be angry with my employer or feeling as if I am “worth” less now that previously. A little understanding of context means my life is full and rewarding still (absence of payrises notwithstanding), though I have genuine sympathy for those who have lost their income or careers entirely.

              (QTR – I’ve read your quote a couple of times but I’ll happily admit when out of my depth. Based on previous exchanges we’ve had, I think you have an anarchist bent (?) so appreciate your arguments that the whole capitalist system is broken. At least you are – or appear to be – consistent!)

            • Maynard J 11.1.1.2.1.5

              “and your writing style is one of the most pompous and condescending around here. ”

              No Gordon, what happens is that I mirror the style of the person I am conversing with. So I am gladdened to see you interpret the style as pompous and condecending – you are spot on with regards to the effect I am trying to achieve. At least you can get that right, even if only by accident and a thorough inability to identify your style when you see it. (I have a mental image of a bird flying into a mirror here)

              “You’re giving up now on the economics and concentrating solely on playing the man. ”

              False, you are just choosing to ignore my points and revert back to the original post.

              “Recession is of course only one factor when employers consider how much labour to take on and what they are willing to pay for it, but it’s a pretty fucking big factor and should be recognised as such. We’ll have to agree to disagree because you continue to miss the basic point “there’s a recession on’ IS a decent reason when employers decide not to hire new labour or pay more for existing labour. ”

              The recession is the only thing you have mentioned here until you made that statement above, so forgive me for trying to make the point, several times in fact, that there is more to it. Consider:

              “There’s been a recession on, you know. My employer is making significantly less money than in previous years.”

              “It’s that simple: supply and demand. In a recession, most people are happy to stay employed.”

              “The world is a changeable place and, frankly, almost everyone has taken a hit in recent times.

              The mantra should be suck it in, work hard, keep your job.”

              “I look at people who are unfortunate enough to be without jobs, or live in the third world, or whatever, WHILE THE WORLD IS IN A FUCKING RECESSION. ”

              “And finally, anyone who believes it’s lack of “spine’ to aggressively seek payrises in a depressed economy needs psychiactric help.”

              “The circumstances at present are a fucking great big recession.”

              I wonder where I got the idea that the recession is the only factor you seem to mention, while I am talking about just considering all the other factors that might be involved when discussing a pay increase, or lack thereof.

              Like as not, Gordon, and yes, agree to disagree, but I believe you are a sap if you accept that reasoning without question. And that, incidentally, is where I disagree with the original post. Some may be producing less, where demand has slumped, and then you have a reason for a pay cut or no increase – because you are doing less! That would be the hypothetical reason, not the recession.

              If you are working just as hard, producing just as much and your employer’s financial situation is relatively static then perhaps you might want a better explanation than the recession.

              “Where does my anger come from? You base that on what, use of the word “aggressive’ on an internet forum?”

              Just your general demeanour, Gordon. But I am ready to realise that you may be an entirely amicable fellow, aspects of performance here notwithstanding, so I will withdraw that.

              P.S. caps is universally interpreted as shouting but I appreciate that was not the case earlier. If you want to drop in italics and such, try looking here for some pointers.

              P.P.S. an excerpt from your first comment: “If you think you’re being undervalued, then piss of somewhere else where you get appreciated fully, you poor baby.” It was not all sunshine and roses and level-headed charm, was it Gordon? ‘Leaving sense at the door’ seems a positively benign comment, in consideration.

            • Gordon Shumway 11.1.1.2.1.6

              Maynard – that doesn’t wash, sorry. You’re missing half of what I write and selectively quoting. Whether intentionally or not, I have no idea. Perhaps the red eye patch is in the way? 🙂

              I’ve of course made repeated references to the recession because you are arguing that it is irrelevant, or a “fallacy”. It’s hard to refute that without referring to “recession” once or twice. While the vast majority of what you’ve quoted back at me is insightful, elegantly expressed and obviously right, it’s only fair to point out that I also said:

              “The original post focuses on one tiny aspect affecting labour market (i.e. worker productivity) and ignores all the others. That’s batty.”

              “So I stick by what I say. Firstly, your own assessment of your own “productivity’ means three fifths of jack sh1t in terms of setting pay. Secondly, wider economic conditions certainly play a part because they impact on each party’s decisionmaking in deciding at what price to buy/sell labour.”

              “my “worth’ is affected by wider business conditions (if by “worth’ you mean whether or not I get a payrise this year).” [wider business conditions can go up, or down, Maynard…]

              And I gave the example of two different jobseekers, one of whom would be “happy” with a lower “worth” than the other (You’ve ignored this example, btw, even though it’s the absolute essense of what we’re talking about since it’s behaviour that’s being repeated over and over again in NZ. Recessions have an impact on how both employers and employees negotiate salaries – far more of an impact than theoretical analysis, after the fact, of what worker “productivity” has been).

              If you want to know what a “fallacy” is, it’s the bit where you believe you are “producing” the same as you did previously solely because you punch in and out at the same time each day and do roughly the same job as last year. There’s a whole host of ways I can show you that’s mistaken/irrelevant. But if, even before getting into that issue, you really believe a global recession is irrelevant to the wage/salary growth, I cannot be arsed.

              As a hint, it involves the fact that (a) workers “produce” absolutely nothing independently – the good/service is “produced” by the entity that employs you, using its own machinery, infrastructure, borrowings, electricity, marketing, management, distribution networks, etc., together with YOUR labour. The costs of all of these inputs can go up and down, affecting the cost-per-unit-produced; and (b) in running a business, confidence today about tomorrow’s sales affects how much product businesses manufacture/stockpile now. Think about what might happen in a recession and take it from there yourself.

              Believe me, as a leftie you do not want productivity as the sole (or even main) determinant of wage increases. When good times return, the labour demanded by healthy growing companies, together with strong union advocacy on behalf of workers, will see wage growth at far greater rates than “productivity” gains per worker. Thank god no one who really knows economics believes the “theory” in the original post (or so strongly supported by you) represents any sort of orthodoxy.

              And finally, “aspects of your perfomance here notwithstanding”*, I’ll assume you’re not a pompous twat.

              * even though use of phrases like that makes it incredibly hard to do so.

            • Maynard J 11.1.1.2.1.7

              Ok I will drop the act. Yep we are essentially arguing the same thing here, maybe I am just a bit more wary of motives when employers claim recession – some have dne fairly well out of it, and others not suffered too badly. Not that I was aound at the time, but it really pales compared to the Great Depression, yet that is what it is being compared to. I suspect some are talking it up, but in doing so have made it seem relatively minor.

              In the end all we have discussed happens almost without reference to the recession – unless your hours start dropping, or you are asked to take some unpaid leave or so on. And yes, as in your example – people may settle for a lower paying job than they would hope for due lack of choice.

              If anything is wrong with the original post, it is that if you are in an industry measured by prodictivity – i.e. a primary or secondary industry, you probably will be producing less, because there is less needed to be produced. If you are working just as hard, then either ‘productivity’ is not a relative measure to your role, or your business has not been affected.

      • BLiP 11.1.2

        Scrambling behind an attempt to redfine the terms of the argument might work on Melmac, but not here. Who’s talking about your inherent worth or your productivity or indeed your career. You’ve simply fallen for the fallacy: “we’re in the middle of a recession bollocks” – perhaps you didn’t read the whole post?

        Simple fact is, you are producing the same – or more – amount of wealth that you were producing last year but now your own income will purchase less. And you’re grateful for it? Employee of the month, are you, or just yet another spineless wimp willing to take whatever shit the boss hands you for lunch? Suck it up, slave.

        • Gordon Shumway 11.1.2.1

          Reply is above to Maynard. No attempt to redefine argument at all.

          “Worth” is what my employer is prepared to pay. When times are tough, employers aren’t prepared (or able) to pay as much.

          The salary is influenced, or course, by productivity. Productivity puts an upper cap on what employer will pay. However, of greater importance is whether my ACTUAL emplyer remains solvent during an ACTUAL recession.

          What I reject is the Left’s effort to redefine basic economic concepts in order to try and support ill-timed claims for wage and salary increases.

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    This is a re-post from Yale Climate Connections A respected research group, Project Drawdown, finds that deploying solutions consistent with meeting the Paris climate targets would cost tens of trillions of dollars globally. But crucially, those outlays would also yield long-term savings many times larger than the up-front costs. The new 2020 Drawdown ...
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  • After the Pandemic
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  • Govt’s COVID plan, economic strength recognised
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  • Funding certainty for sports through COVID-19
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  • Susan Thomas the new Chief High Court Judge
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  • Essential media COVID-19 guidelines refined
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  • New Zealand defence personnel conclude mission at Taji
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  • State of National Emergency extended
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  • Christchurch Hospital Hagley ICU to open to support COVID-19 response
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    6 days ago
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  • Tariff concessions on COVID-19 related products
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  • Clarification of modification to wage subsidy scheme
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  • Face masks flowing to DHBs
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  • $27 million for NGOs and community groups to continue providing essential services
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  • Statement on guilty plea of March 15 terrorist
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  • COVID-19 updates
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  • Police numbers break through 10,000 mark
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  • Urgent tax measures for economic recovery
    Urgent legislation has been passed to support the package of economic and social measures needed to recover from the impact of the coronavirus outbreak. “The COVID-19 Response (Taxation and Social Assistance Urgent Measures) Bill will cushion New Zealanders from the worst economic impacts of the COVID-19 outbreak,” said Revenue Minister ...
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    2 weeks ago
  • Further support for farmers and growers as drought persists
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  • COVID-19: Temporary changes to Education Act
    Parliament has passed amendments to legislation that give the Secretary of Education stronger powers to act in the fight to limit the spread of COVID-19, Education Minister Chris Hipkins said today. “They are part of a suite of changes passed under the COVID-19 Response (Urgent Management Measures) Legislation Bill,” Chris ...
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  • Canada, Australia, Chile, Brunei and Myanmar join NZ and Singapore in committing to keeping supply a...
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  • COVID-19: Rent increase freeze and more protection for tenants
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  • Working together to protect businesses and workers
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  • State of National Emergency declared to fight COVID-19
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  • Prime Minister’s statement on State of National Emergency and Epidemic Notice
    Mr Speaker I wish to make a Ministerial Statement under Standing Order 347 in relation to the recent declaration of a State of National Emergency. Having considered the advice of the Director Civil Defence Emergency Management, the Minister of Civil Defence declared a State of National Emergency for the whole of ...
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  • Deadline for domestic travel extended
    People needing to travel on domestic flights, trains and Cook Strait ferries to get home before the country moves into level 4 lock-down tomorrow night will be able to continue using the passenger services until midnight on Friday, Transport Minister Phil Twyford said today. Domestic passenger services, particularly ferries, have ...
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  • Mortgage holiday and business finance support schemes to cushion COVID impacts
    The Government, retail banks and the Reserve Bank are today announcing a major financial support package for home owners and businesses affected by the economic impacts of COVID-19. The package will include a six month principal and interest payment holiday for mortgage holders and SME customers whose incomes have been ...
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