Holiday clipshow – National bleats about wages, still has no solutions

Written By: - Date published: 6:33 am, December 27th, 2010 - 31 comments
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Back in 2008 it was clear what National wanted to do with wages and if Tane was still around he’d be able to say “I told you so” but instead we’ve resurrected one of his posts which does pretty much the same thing…

earnings 450 gap 450

The National Party are once again trying to make political capital over the Trans-Tasman wage gap, even though they created it in the first place and have no policy to fix it. Like I’ve pointed out a dozen times before:

1. Yes, we have a wage gap with Australia and it needs to close.

2. The wage gap we have now opened up by 50% under the last National government due to their neoliberal employment relations policies. When you take rights off workers their wages fall, and under National most Kiwis’ incomes did fall.

3. Under Labour’s Employment Relations Act the harsher edges of those policies have been removed and wages have started to rise again. The gap with Australia has remained static. More needs to be done, but those are the facts.

4. National has no policy to lift wages. The only policy it does have on wages is to take rights off workers, which as we saw in the 1990s will only see downward pressure on wages and a further widening of the wage gap with Australia.

5. Cutting taxes will not lift wages, it will only reduce the tax people pay on them. In any case, to close the gap with Australia, National would have to abolish income tax. And that’s not going to happen, even in their wildest dreams.

In short, yet another hollow, discredited attack from a party that has no credibility on wages.

31 comments on “Holiday clipshow – National bleats about wages, still has no solutions”

  1. tsmithfield 1

    One shouldn’t put the cart before the horse.

    In order for wages to rise in real terms, productivity, profitability, and cashflow needs to increase. As firms become more profitable and have more cash they tend to expand, thus needing more workers. As the general demand for workers increases, then wages also rise due to the law of supply and demand. This will result in not only higher wages, but also lower unemployment.

    Any other way of increasing wages (e.g. through legislation or excessive union pressure) might well result in higher wages. However, if firms end up with an overall wage bill they can’t afford, they will cut staff until the wage structure matches their ability to pay. Thus, enforced wage increases might result in higher wages, but this will be at the cost of jobs.

    • ZeeBop 1.1

      Surely the best way, in the current economy, to raise wages is to sack your employer. Much of private NZ is underwater. Employees have often been made contractors. Its simply one more step for workers to start up their own co-op company, it worked for Fonterra. When your boss is using cash flow to pay debt interest to foreigner then wage pressure will be introduced by your boss. Now stop whining, National would call it the free market. Historically when we hit depressionary type signals we see a massive sacking of managers in the economy. 😉

    • Morning TS

      In order for wages to rise in real terms, productivity, profitability, and cashflow needs to increase.

      Only if you accept that the current distribution of society’s resources is just. The major problem IMHO is that more and more of the world’s wealth has been given disproportionately to the few.

      What about a system involving a fairer distribution of wealth?

      Your comment presupposes that the current system is just and that the solution is the only one that the system will permit.

    • Eddie 1.3

      ts. wages can rise is capital’s share of the GDP falls.

      This has been well covered in previous posts. Many other countries – including Australia have much higher slices of GDP going to employee compensation.

      You actually end up boosting growth that way too, which means everyone’s richer. As the US has found, when all the wealth is too narrowly concentrated you can’t have the widespread demand to generate growth.

    • Draco T Bastard 1.4

      Increases in productivity decrease wages as demand for workers goes down
      Increases in profitability are probably due to the increases in productivity that have lowered wages
      Increases in cash flow is really stupid as it comes from an increase in consumerism which uses up valuable resources that will be needed in the future.

      Now, I’m not adverse to increases in productivity but it needs to be balanced with decreases in hours worked with the same, or higher, level of income. If it isn’t then we end up with more and more unemployed.

      We have to get away from the growth paradigm as it doesn’t work and into a stable state economy. Just because you can make more and more doesn’t mean that there’s a market for it especially considering that everywhere else can make the same stuff. Of course, in a stable state economy, there is no profit.

    • Jum 1.5

      Tsmithfield

      The illogical anathema employers/shareholders have towards workers being treated like equal human beings is so December 2008 to December 2010.

      Until workers are seen as assets rather than expenses wages will not increase.
      Until workers are seen as assets rather than expenses wages will not increase.
      Until workers are seen as assets rather than expenses wages will not increase.
      Until workers are seen as assets rather than expenses wages will not increase.
      Until workers are seen as assets rather than expenses wages will not increase.
      Until workers are seen as assets rather than expenses wages will not increase.
      Until workers are seen as assets rather than expenses wages will not increase.
      Until workers are seen as assets rather than expenses wages will not increase.
      Until workers are seen as assets rather than expenses wages will not increase.
      Until workers are seen as assets rather than expenses wages will not increase.

      • RedLogix 1.5.1

        Not all, but many business owners… like the NACT party who represents them… are still deep down wedded to the ‘slave-owner’ mentality. Not conciously, but when you strip away all the bs, that’s pretty much what it amounts to.

        • M 1.5.1.1

          Absolutely, Red.

          I have a friend who have gone in boots and all with a partner who is very wealthy and now seems to be very much taking on these kind of views, crossing over to the dark side.

          Funny how indulging the sybarite in one’s self and having all material comforts met can turn a person’s head and views.

          • Jum 1.5.1.1.1

            I have the material comforts that are important to me; the fact remains – do we want a world where we have gated communities to keep the poor, vengeful and desperate out or do we see all Kiwis as human beings and share the basics of life so that no one can say they are starving or don’t have a roof over their heads or a chance of a better future. In short they should live, not just survive. Not everyone wants to be rich; not everyone wants to dominate – everyone however deserves the best a country can give its people. NAct are useless at that. They are grasping and greedy and they want to make that New Zealand’s mantra; we can be better than that. New Zealanders are at a crossroads; next election will decide just what New Zealanders are.

            • M 1.5.1.1.1.1

              Jum, NACT I believe view people not as fortunate as them or greedy, corrupt and grasping to be a waste of space unless of course a ‘serf’ can clean their toilet or do some other unpleasant task.

              Gated communities may seem like a good idea but there is only one way in and one way out; a terrible trap should a mob go on the rampage. I think it was in the doco that the former head of social Welfare stated quite clearly that welfare never used to be a dirty word and that people who needed help were given sufficient income so that they could live like most NZers with the occasional, modest form of entertainment which to most people these days is a form of blasphemy.

              When married and in a better position than I am now (the ex and I had an inheritance which paid off the house and meant I didn’t need to work while the kids were pre-schoolers) but even then I always voted left because I was well aware of how damn lucky we were. On election day ’99 some friends called in and I told I was wearing red in hopes of a Labour victory so that people would get a fair deal especially with income related rents and they got very huffy. Fairness in society was not on their radar despite their special needs daughter receiving and invalids’ benefit for an accident of birth which meant she had virtually no strength in her arms. What if they had had to foot the bills for all her needs from their own pockets instead of getting some help from the public purse?

              Like most right wingers, it’s OK for them to draw from the public purse because you know, they’re deserving, unlike those bottom feeders called beneficiaries, and would never rip anyone off etc.

              ‘The Spirit Level’ put it very well when describing massive income and health inequalities, racism and lack of connectedness as a form of violence.

              The violence that’s been visited on NZ’s more vulnerable citizens by NACT can only be made right at next year’s election and I’m afraid people will only change their attitudes in a lot of cases when the calling card of unemployment presents itself.

            • Robert Atack 1.5.1.1.1.2

              The Maori found out what it was like in New Zealand when the food supply wasn’t enough to maintain the population or future generations, when they hit peak Moa. We are fast approaching that point again with peak oil. It will not matter how much $ you have in the bank or under your bed, when the shops are empty so will all our stomachs.
              Gated communities … big deal… starving people do not travel by car.
              My idiot mother is moving into an Aotea retirement home, she is saying it is not Cannons Creek it is Aotea, and it has ‘gates’ yet from google earth you can see that Cannons Creek is way closer to the units at the back of the complex, than the front gate is, and like I said starving people don’t travel by car.
              The next election will be as much a waste of time as any election, the pig ignorant masses will still be thinking along the same lines as most of you “We all ‘deserve’ our fare share” Wake the F up, 1 planet divided by 7 billion people minus fossil fuels = a lot less people OR A LOT LESS ‘FARE SHARE’ …. do the maths …. or to down scale for you – the Maori were struggling in their pre-fossil fuel world to feed the what? 50,000 of them? … we are over 4 million now, and the land has been striped of most of the important minerals etc ‘we’ need to grow our food, minus the fossil fuel created fertilizer – we will be looking at the same solution Maori had IE kill people and eat them. You will be demanding your fare share of cadavers … if you are lucky.
              You don’t have to take my word for it … just wait)
              The left/right/far right/fare left ALL ignored our advice … when it might have softened our landing … so now we are all surely going to all get our ‘fare share’ but not of happy happy joy joy days in the sun. Think along these lines “I will eat your child and you can eat mine” 1960s Chinese saying … and another one “Mummy please don’t eat me” … from the Chinese youth movement at the time. At least 30 million people discovered there was a fare share at least in their area, they also reported at the time that the dogs were eating cadavers, but it has since been proven that there were no dogs, the people had eaten them long ago.

              http://www.youtube.com/watch?v=xIraCchPDhk Fuck hope don’t vote….. Show the wankers you have a brain, show them they aren’t even worth a tick.
              Don’t be suckers.

  2. Colonial Viper 2

    Such a joke tsmithfield.

    Productivity has increased. Since 1980, productivity in many work places has shot up 3-4x.

    The work of 4 people being done by one. The number of times I’ve heard friends say – they are cutting people from the department and still expecting us to get the same job done. Guess what, when a 3 person team gets cut down to 2 people, did the remaining two people get a 50% pay increase? Or even any extra pay, for doing the third persons’ work?

    Everyone having access to computer technology now, spreadsheets, mail merge, laser barcode scanners (instead of having to tap in a series of numbers for every item). People get more done for businesses with way less work.

    And where has the resulting economic surplus of that added productivity gone? To the worker? NO FRAKING WAY.

    Its gone to the CAPITALIST OWNERS of big business.

    Don’t you wonder why Westpac screws its line staff in wage rounds, then is able to ship $6.2M in profits per week back to its Australian shareholders?

    There’s productivity and economic gain alright, and the workers don’t get more than the crumbs of it.

    • RedLogix 2.1

      CV,

      You touch on a matter that, as a technologist/geek type myself is very dear to my heart. You are correct that the fabluous advances in technology over the last 30 yrs have increased labour productivity by 3-4 times… yet the vast majority of the benefits of that increase have been captured by a very small minority of the world’s population..

      I’m old enough to still have a CK722 germanium transistor in a box somewhere… when I was a boy you could not build the functional equivalent of a cell-phone in a building smaller than a medium sized house…. 8Mhz was considered a fast clock speed… these days your wristwatch has more processing power than NASA possessed when it sent men to the moon. Genetic technologies that had not even been yet thought of, yet despite all that change, and most importantly the impact it has had on industry, infrastructure and capacity to solve problems transforming lives in ways our grandparents could barely dare imagine… despite this… the enormous wealth it has created has been captured by fewer than 1% of the people in the world.

      Primarily the financiers, bankers and uber-wealthy capitalists.

  3. Colonial Viper 3

    I should add that small businesses suffer a lot from the fact that the wages the NZ population gets paid are so low.

    Only a very small proportion of the population can afford to pay decent coin for decent services, due to wage suppression.

  4. tsmithfield 4

    MickySavage “Only if you accept that the current distribution of society’s resources is just. The major problem IMHO is that more and more of the world’s wealth has been given disproportionately to the few.

    What about a system involving a fairer distribution of wealth?”

    Quoted Micky here because it seems to be a recurring theme in posts above.

    Here are some “what if” questions:

    Lets assume that the wealth of the world is divided equitably, in fact, lets even assume it was divided equally amongst all earthlings.

    1. What would be the consequence in terms of resource consumption, greenhouse gases, pollution etc if money that had been locked up in banks etc was suddenly in people’s pockets?

    2. How long would the state of equality remain for anyway, especially considering those who are wealthy are fairly skilled at manipulating whatever governmental systems for their own benefits?

    • orange whip? 4.1

      those seem to me to be slightly disingenuous questions.

      on the first, what money are you talking about? banks already lend many, many times more money into circulation than they have “locked up”. there is no vast store of money sitting in bank vaults waiting to be unlocked.

      on the second (and implicit in the first) you are assuming that people are talking about literally divvying up the world’s resources equally and leaving all of the economic and social paradigms intact. you are correct that this would be fruitless and futile in the long term, however this is not the scenario anyone is contemplating apart from yourself. essentially a man of straw argument.

    • RedLogix 4.2

      Your second question ts is the interesting one:

      First of all I no-one imagines it would ever be possible or even desirable for all the wealth in the world to be equally, or even close to equally, divided. Much would hinge on the meaning of the word ‘equitable’. But surely the current scenario where fewer than 1% of the people control most of the wealth, is as far removed from ‘equitable’ as can be imagined. The social construct that we currently employ, predicated on greed, selfishness and ‘winner takes all’, otherwise called capitalism… has quite inevitably led to this outcome.

      Moving towards equity is dependent on the nature of the social constructs we agree to live by. This implies a social and economic system based on the notions of selflessness, the equal worth and dignity of all humans, and service to others. In other words a life lived as a contributing, valued part of a greater collective would inevitably reduce inequality, leading to happier more fulfilling lives for most people.

      In such a world, selfishness and greed would be socially ostracised.

  5. tsmithfield 5

    My thought experiment above wasn’t meant to be taken literally.

    So far as use of resources are concerned, it is an indisputable fact that as people become wealthier they use more resources. Consider how much in resources the US uses per head of population compared say to Africa. Look at how China is consuming increasingly more resources as their population becomes wealthy.

    This is an interesting conundrum for parties such as the greens who aim for both social and green objectives. When it boils down, poor is green. Therefore, the green’s social and green objectives would best be achieved by having the world equally poor rather than equally rich!!

    My second point in my thought experiment demonstrates that social justice is unlikely to be effective unless it is combined with training on financial management and attitududinal changes towards the use of money. Otherwise, the wealth just ends up back in the hands of those who are good at accumulating it.

    • Colonial Viper 5.1

      it is an indisputable fact that as people become wealthier they use more resources.

      You speak of this as if it were an immutable law of physics.

      It is not.

      It is human created behaviour and thus it is human alterable behaviour. Look at the top ten countries in the OECCD, GDP per capita. The energy use per capita varies incredibly between them, yet all live first world lifestyles. Austria, Denmark and Switzerland all consume half the oil that the US does per head.

      Median incomes in the US are not twice that of those countries.

      Otherwise, the wealth just ends up back in the hands of those who are good at accumulating it.

      You speak of individuals changing their behaviours to alter this pattern of wealth concentration by a few.

      That is insufficient.

      Because the wealthy has created societal and economic systems which tend to concentrate capital in just their hands.

      Trying to tackle this at the level of the individual is a weak, insufficient remedy.

      Societal and economic systems must be changed.

    • orange whip? 5.2

      tsmithfield you miss the point of the responses.

      “So far as use of resources are concerned, it is an indisputable fact that as people become wealthier they use more resources.”

      then you must accept that by distributing wealth more evenly the few who currently use the majority of the resources will no longer have the ability to do so. if your assertion is correct – that wealth dictates the level of resource consumption – then redistributing the existing wealth has no overall effect on consumption. a few will use a lot less so that many can use a little more.

      the second point also ignores the responses. no-one but yourself is suggesting that we will leave intact the financial systems and power structures which currently exist.

      this thought experiment of yours is a strawman – it is not based on anything that others are even suggesting.

      it also carries some assumptions which are suspiciously close to a particularly ugly brand of cultural superiority. i’m loathe to use the word “racist” but when you suggest that entire continents of people are somehow inferior by dint of the fact that they do the grunt work of the world for a subsistence living so you and i can be rich – and furthermore that it is desirable for this state of affairs to continue as long as possible – well there are certain conclusions people might be prone to draw about you and they aren’t pretty.

      i might be tempted to join them but i’m trying to give you the benefit of the doubt and assume that you are entirely ignorant of history and thus not to blame.

      • tsmithfield 5.2.1

        “then you must accept that by distributing wealth more evenly the few who currently use the majority of the resources will no longer have the ability to do so. if your assertion is correct – that wealth dictates the level of resource consumption – then redistributing the existing wealth has no overall effect on consumption. a few will use a lot less so that many can use a little more.”

        Na. Think this through a bit more. You are making assumptions that “the lot less” involves substantial reductions in resource consumption. It might not (e.g. less money being spent on internet downloads). Whereas, the little more spent by the poor might be very resource-loaded (e.g. increased car purchases as in China).

        “it also carries some assumptions which are suspiciously close to a particularly ugly brand of cultural superiority. i’m loathe to use the word “racist” but when you suggest that entire continents of people are somehow inferior by dint of the fact that they do the grunt work of the world for a subsistence living so you and i can be rich – and furthermore that it is desirable for this state of affairs to continue as long as possible – well there are certain conclusions people might be prone to draw about you and they aren’t pretty.”

        Exactly where did that come from? I have nowhere stated that I think the rich are superior to the poor, or that one race is superior to any other, or that the poor remaining in poverty is a desirable outcome. All I have tried to demonstrate is what I think is an unavoidable consequence of wealth redistribution, if taken to its logical extreme. I haven’t said that the poor should be consigned to their lot as a result, or that we shouldn’t do anything to improve their circumstances.

        • orange whip? 5.2.1.1

          “You are making assumptions that “the lot less” involves substantial reductions in resource consumption.”

          yes i am. i don’t think you’re yet grasping the magnitude of what is being discussed. it’s not business as usual for you and an extra loaf of bread for everyone else.

          “Exactly where did that come from?”

          here: “Otherwise, the wealth just ends up back in the hands of those who are good at accumulating it.”

          europe and north america, largely then.

          • tsmithfield 5.2.1.1.1

            That was a statement of fact. Those who are good at accumulating wealth tend to accumulate more. Those who are bad at financial management tend to lose it, wherein it finds its way to those who are good at accumulating it. However, I made no value judgement on races or the like. There are people who are good at financial management in all races and vice versa.

            I think you are letting your own prejudices warp your interpretation of what I am saying.

            • Colonial Viper 5.2.1.1.1.1

              Those who are good at accumulating wealth tend to accumulate more.

              There is a truth to this but you are personalising the effect too much and forgetting about who the system favours.

              And very clearly, the capitalist system favours who already has wealth to start with.

              This is the proverbial ‘the first million dollars is the hardest to make, and then every million dollars after that easy’.

              Once you have the resources to engage lawyers, accountants, shuffle funds around etc. you are on the up and up.

              In other words, I would not fall into the trap of generally considering the wealthy as being more talented with money than anyone else (although some of them are, of course). Usually they just have people working for them who are.

            • orange whip? 5.2.1.1.1.2

              tsmithfield the value judgement is in the phrases “bad at financial management” and “good at accumulating it”.

              you are saying – whether you realise it or not – that people in western societies are more talented in this regard than anyone else.

              • tsmithfield

                orange whip? “tsmithfield the value judgement is in the phrases “bad at financial management” and “good at accumulating it”.”

                The value judgement is in your own mind, not mine.

                • orange whip?

                  of course good and bad are value judgements. in fact i know of no clearer example available in the english language. do you?

            • tsmithfield 5.2.1.1.1.3

              orange whip? “yes i am. i don’t think you’re yet grasping the magnitude of what is being discussed. it’s not business as usual for you and an extra loaf of bread for everyone else.”

              Have you heard of “Maslov’s hierarchy of needs”? If rich people, lose income, they will probably cut more esoteric activities (e.g. Sky TV) but maintain more basic ones that tend to be resource intensive (e.g. heating oil/coal/electricity for the winter). If that money that was saved by the rich trimming their excess was sent to poor people then those people are likely to use the resource for meeting their more basic needs which tend to be more resource-intensive. So your original argument that evening out the playing field results in no net difference in resource consumption is clearly incorrect.

              • orange whip?

                your mistake is in assuming a society which looks and operates more or less as ours currently does but with a few more people participating. why do you assume we can afford to waste scarce resources on television sets? the goal is to lift millions out of poverty, not to prevent you from slipping a few notches down the social hierarchy. your concerns over luxury convenience consumer goods are relatively insignificant.

  6. tsmithfield 6

    CV “It is human created behaviour and thus it is human alterable behaviour. Look at the top ten countries in the OECCD, GDP per capita. The energy use per capita varies incredibly between them, yet all live first world lifestyles. Austria, Denmark and Switzerland all consume half the oil that the US does per head.”

    I think geography has a lot to do with this. Those european countries are much smaller geographically than the US. Therefore, it is not surprising the need less oil. China is geographically large, so I suspect they will end up using a lot of oil per head of population as well.

    CV “Societal and economic systems must be changed.”

    Nah. Individual behaviour must be changed IF societal and economic systems are to be changed. Otherwise the macro changes will have no effect.

    • Colonial Viper 6.1

      Geography might play a wee role. But so might public transport and government intervention.

      You also can’t tell me that the US car industry couldn’t use highly efficient 1.6L motors in cars like they do in Europe and the UK, instead of 1980’s design 4L truck motors. What excuse does the US motor industry have for producing medium sized cars today which just start to match the fuel efficiency of Japanese cars from 20 years ago?

      Individual behaviour must be changed IF societal and economic systems are to be changed. Otherwise the macro changes will have no effect.

      More realistically, I’d say that there is a complex interaction between individual behaviour and macro level systems. Both sides of the equation need to be worked on *at the same time*.

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