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Fact: Nats cut wages last time they were in power

Written By: - Date published: 6:12 am, July 29th, 2008 - 34 comments
Categories: national, wages, workers' rights - Tags:

For anyone who still doesn’t want to believe that National cut incomes for most Kiwis last time they were in power (and would do so again). Here’s something I came across in an incomes report from 1998:

The median income earner was 6% poorer in after-inflation after 7 years of National government. That didn’t happen by accident – it happened because National refused to increase the minimum wage, slashed benefits and superannaution, and attacked and weakened workers’ ability to organise through unions to win pay increases.

John Key said he “would love to see wages drop“. He has already announced a workplace policy that will undermine workers and their unions, leading to below inflation wage rises. He has refused to commit to lifting the minimum wage. Using the same tools as they did in the 1990s, National would make wages drop. Will you vote for lower wages?

34 comments on “Fact: Nats cut wages last time they were in power ”

  1. How about forgetting the term “worker” and call them what they are; human beings who should not be working their arses off for a boss but be part of a community that supports them as they support that community. Boss/Worker, forget it. Those terms have had their time. If we are not careful we will go back to a more awful description.

    How about Feudal lord/Peasant.

    Last Friday something happened which of course did not make the mainstream media, Something so horrifying it is almost beyond comprehension. The National Australia Bank wrote off 90% of its US conduit loans.

    According to John Steward the NAB CEO the US housing market is in a “meltdown”.

    A couple of weeks ago Fanny Mae and Freddy Mac, the two biggest Mortgage providers of the US almost collapsed. They own $ 5 trillion worth of Mortgages but they are leveraged for almost $ 50 Trillion. There is no way these two giants can be bailed out any more. This is mayhem like you wouldn’t believe. It is bank runs and collapses, corporate meltdowns and job losses beyond imagination. It is the total collapse of the US and with it, the world economy. The end of Jobs, bosses and workers.

    Thanks to the Federal Reserve of NY’s absolutely criminal behaviour over the last 20 years we and our children are going into the most horrifying depression this world has ever seen. Think I’m joking? Fearmongering? Read the link, do your own research and order the seeds you think you are going to need and start a veggie patch.

    My father in law is 82 and had a comfortable sum in shares. He lost half of it, took the rest out and has started his second veggie patch and I didn’t tell him anything. If he can figure it out via the internet than so can you.

    Latest news: NAB has announced John Stewart to set aside an additional provision for credit risk. An additional provision of AU$830 million. That was the part where the leapt dove into the sleepy-eyed market’s midriff. An extra credit provision tells us all that there may be more subprime losses to come.

    Welcome to the real world and I’m sorry to be the messenger.

  2. Did I disappear into purgatory again?

  3. rjs131 3

    When did labour reverse those benefits cuts?

  4. monkey-boy 4

    “Will you vote for lower wages?”

    As far as I can see we have been doing so every time we have endorsed ‘WFF’.

  5. mike 5

    “Will you vote for lower wages?’

    Gotta love these one liners the union are gearing up to foist on their loyal but naive subjects.

    Will you vote for less Nanny State and more take home pay?

  6. ants 6

    What a load of BS – how can they “cut” wages when they don’t pay them in the first place.

    You are an idiot.

    IrishBill says: you offer nothing but abuse. Take a week off.

  7. Daveski 7

    A couple of points SP

    Where are the figures for Labour’s last nine years?

    Second why are the figures inflation adjusted when the successes you’ve lauded about Labour’s last nine have never been inflation adjusted?

  8. Jeremy Eade 8

    “How about forgetting the term “worker’ and call them what they are; human beings who should not be working their arses off for a boss but be part of a community that supports them as they support that community. Boss/Worker, forget it. Those terms have had their time.”

    Yep,we need citizens to start contemplating their position in the workplace and how that environment can be improved and what benefits should be taken into account when we revisit labour laws.

    When we talk about labourmarket flexibility we have to consider the level of instability this brings to the individual citizen and wether the gains of labour mobility will be recognised by the majority of the workforce at any stage in their lifetime.

    We need more purposeful, goal orientated business strategy than this shakey idea that extreme personal wealth creates a natural and measurable bump in the incomes of all workplace participants. When the Walton family and the like start giving a shit about their employees and stop building themselves spare mansion space maybe I’ll change my mind.

    …and the whole left wing/right wing , liberal/conservative measure has been abused and shat on for so many decades now maybe it’s time to abandon that measure and start talking about realtime business strategy to lift the standard of living of our people, measurable strategy given decent and vigourous debate regardless of it’s messenger. Keep crunching the numbers folks, it’s the language of business.

  9. higherstandard 9

    IB

    A one week ban to Ants for telling the truth …. bizarre.

    IrishBill says: It’s not bizarre HS, it’s simple. Abuse one of us. Take a ban.

  10. Tane 10

    HS. Ants isn’t “telling the truth”, he’s just being abusive and deliberately misreprenting SP’s argument (which is set out quite clearly in the post). IB might be a bit liberal with the banning stick, but people are expected to actually put forward proper arguments here rather than simply abusing their opponents.

  11. Bill 11

    Seems I’m ahead of the game! Unemployed already. Seeds in already. Now, if only I could get off that damn grid before the ‘lecy stops;o)

    Skiting aside. I’d like to think that in retrospect a lot of the issues consuming our thoughts will be seen as much flogging of a dead or dying horse.

    Taking on board the travellerev’s scenario, the question still remains that apart from eating veg, what the fuck you gonna do when money no longer acts as a vehicle for inclusion and participation in society : when the market has to all intent purposes ‘withered on the vine’?

  12. Matthew Pilott 12

    Bill – I’m setting up this island somewhere, not sure you’ve heard about it…

  13. Bill 13

    Count me in. Guess I won’t have to steal a boat since property will be worthless? Just give me coordinates.

    Hang on. Your island? That make you a head honcho?

  14. To their shame, Labour has not reversed the benefit cuts – however they have lifted the real median income by 32% thanks to a full employment policy and a minimum wage that is up from $7.70 to $12 an hour.

  15. Daveski 15

    SP asking what may be a dumb question but by “real incomes” do you mean inflation adjusted?

  16. Tane 16

    travellerev,

    I don’t see why you wouldn’t use the terms ‘workers’ and ’employers’. We still live in a capitalist economy, and these are accurate terms to describe the dominant economic relationship.

    Talk of feudal lords and peasants is not only inaccurate, it makes you sound like a raving loon. And for what?

  17. Daveski. Yes. In economics we talk about real and nominal values – nominal is the numbers on the pieces of paper, real is in consistent value over time, ie inflation-adjusted.

  18. Travellev. it’s the fundamental dichotomy of the capitialist society we live in – you are a worker or a capitialist. The so-called middle class (and nearly all of us here are of that class) are still workers, just well off ones with maybe some capitial investments.

  19. Bill 19

    Disagree with your fundamental dichotomy there. There are capitalists. There are coordinators/managers/commissars…call them what you will. And there are workers.

    The middle tier keep the whole shebang ticking along to the benefit of the capitalist and are really quite well rewarded for their effort.

    Miss them out and you overlook a crucial element of capitalism.

  20. Bill 20

    Matthew.

    Due to your lack of speedy response, I’ll assume you are another closet dictator in waiting. So I’ll be hanging out on this here island. Thanks all the same.

  21. Bill. Yeah, you’re quite right – I forgot to mention the mikes of this world. Tane’s got a youtube link you might like.

  22. Matthew Pilott 22

    Sorry, tending to the middle classes Bill. Na, I won’t be a dictator, the only real rule is we have to keep the libertarians out. They’ll want a piece of the (collective) action once their island self-implodes.

  23. Bill 23

    Won’t the ‘righties’ have their own little individual islands of various ‘ones’?

    BTW. Why oh why oh why are right wing individualists referred to as ‘libertarians’ here? They aren’t! Libertarianism has a long left tradition and although ‘righties’ might want to hi-jack it, I’m reckoning they shouldn’t be encouraged by others adopting the term to refer to them.

    Anyway.

  24. Tane 24

    Bill, agreed. They don’t believe in liberty, they believe in property.

    They’re propertarians if anything.

  25. Bill. no man is an island

  26. Daveski 26

    Thanks SP

    Certainly the economic environment has been completely different but I do acknowledge that there has been considerable increase at the lower level.

    That’s not to say that median incomes wouldn’t have increased under a National Government given the economic conditions over the past 9 years.

    I think the problem that Labour has is that the increases at the minimum and lower levels have been eroded by the increases in food, petrol etc. The polls certainly support the view that Labour has gained much credit for the increases.

  27. “at the minimum and lower levels have been eroded by the increases in food, petrol etc”

    – be careful because a lot of people say this kind of thing forgetting that “increases in food, petrol etc” are accounted for when you adjust for inflation. People are better off, after you take out the extra money they have to pay for increases in prices in food and petrol and everything else.

    Here’s how inflation adjustment works. The consumer price index, measures inflation in prices for retail goods and services. Stats asks 17,000 families to record everything they spend money on every quarter, from that Stats works out what % of income the typical family spends on every kind of good a service. Then the price of those goods and services is calculated by stats workers physically going out and recording the prices (they even take into account discounts and the % of people who use them). From the prices they record and the spending information they have they can work out changes in the overall price of good and services over time. In 2007 the CPI was 1020, the index base is June 2006. That means a $1000 size slice of that typical family spend in 2006, cost 1020 in 2007, it had cost $832 in 1999.

    So, now I get the income data. Again, Stats has asked 17,000 households to record their incomes and calculated the median income (50% of incomes are higher, 50 % are lower than the median) for each year. In 1999, the median was $320, in 2007, it was $519. Now, I need to adjust for inflation. A dollar in 1999 bought more than a dollar in 2007 – $832 in 1999 bought the same as $1020 in 2007, so I divide $320 by 832 and times it by 1020 to turn 1999 dollars into 2007 dollars. That $320 in 1999 was able to buy as much as $392 in 2007. The median income in 2007 was $519, 32% higher than $392, the median income in 1999 expressed in 2007 dollars.

    Two other facts: benefits are inflation-adjusted so inflation can’t lower benefits in inflation-adjusted terms. The minimum wage has been increased faster than inflation under Labour. That means it has actually been lower income people who have seen the fastest % increase in incomes under Labour, having gone backwards while the rich got richer under National.

  28. links: income change by income decile 1988-2001, 2001-2007

    The right incentives?

    and minimum wage, inflation adjusted http://www.thestandard.org.nz/?p=906

  29. ropata 29

    Check out the “new capitalist pyramid” for a representation of the REAL workers in the modern world

  30. Phil 30

    Props to you for taking the time to spell that out Steve.

    One small error in this;
    “Stats asks 17,000 families to record everything they spend money on every quarter, from that Stats works out what % of income the typical family spends on every kind of good a service.”

    The relative weights of items priced as part of the CPI comes from the Household Economic Survey – which is run once every three years, and collects data from a larger number of households. The CPI is reweighted on the same cyclical process, so they don’t need to collect a great deal of expenditure data in between.

    The one you are thinking of in that respect might be SoFIE.

  31. Tane 31

    Cheers ropata, very cool.

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