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In praise of collective bargaining

Written By: - Date published: 7:13 am, August 29th, 2011 - 75 comments
Categories: capitalism, class war, jobs, Unions, wages - Tags: ,

One of the great myths of Right wing politics is the worship of the individual over the community / collective.  The “rugged individual”, the “loner”, the “maverick”, “Atlas Shrugged” type “wealth creators” and so on.  It’s ignorant at best, an active lie at worst, and always an appeal to vanity and ego. But there’s no denying that it’s also a very powerful and useful political meme.

One use of the loner meme has been as a tool in the attack on collective bargaining – on unions.  A previous Nat government gave us the widely hated Employment Contracts Act (ECA), which abolished collective bargaining.  One of the lies used to sell the ECA was that negotiating directly with the employer would “empower” the individual worker and allow them to get better wages and conditions.  Yeah right. The last Labour government replaced that with the ECA with the Employment Relations Act (ERA), which dealt with the worst aspects, but left the possibility of individual contracts for workers in place.

So how are those individual contracts working out?  Not so good:

Warning on wages

Workers close to entering management ranks are being warned to carefully consider their employment agreements – they risk earning less if they don’t compare collective and individual contract employment rates. …

Fred Adelhelm, of Adelhelm & Associates … have worked with 72 of New Zealand’s largest employers. They say increasing numbers of workers, and employers, are noticing a “pay-curve headache” – where talented staff moving off wages on to individual employment agreements (IEAs) can fall behind. Employers need to avoid these problems to stop disharmony in the workplace, they say.

Adelhelm says highly specialised staff who move into first-in-line relieving management positions can drop up to 5 per cent behind their colleagues in earnings if they move to individual contracts without careful consideration. As salaried staff they give up the allowances that a collective entitles them to and sometimes rises in base rates don’t compensate for that loss.

Here’s another part of the puzzle from Marty G’s great post at the start of the year on the difference in wage increases for unionised vs non-unionised workers:

It’s clear: most non-union workers got no pay adjustment and went backwards after inflation while 62.8% of union workers got an above inflation pay rise. The average was approximately 2.5% for union workers, 1.4% for non-union workers.

So never mind the loner rhetoric. Turns out that “No man is an Island”.  In general you’ll have better wages and conditions with a unionised workforce and a collective contract.  No wonder the Nats hate unions.

75 comments on “In praise of collective bargaining ”

  1. tc 1

    Oz has a highly unionized workplace in general…..another reason they do better.
    This along with asset sales and tax cuts benefitting the economy are three of their evergreen ideological mantras parroted in the face of overwhelming evidence to the contrary.

    • Aye.  When Key promised that we will catch up with Australia he should have copied Australian institutions.

      Unless he was fibbing … 

      • Jim Nald 1.1.1

        Closing the gap with Oz?
        Like to see your wages drop when you’re working in Oz?

        Diana Clement observes:

        … The job-search process can be different across the ditch. Herald reader Keith Reed, who emailed me from Brisbane following an earlier article, says the first port of call for anyone looking for work in the construction industry, for example, is the union, not a recruitment consultant. “Union members who work on union jobs enjoy far better wages and conditions than those who do not. The union can be very helpful in obtaining employment.”

        Source:
        Moving across the Ditch – without tears
        http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=10747626

  2. vto 2

    “One of the great myths of Right wing politics is the worship of the individual over the community / collective. ”

    Farmers are long time national party supporters and would see themselves as more right wing.

    Yet their favoured method of transacting business is as the collective. Fonterra is a collective. Do you think individual dairy farmers would rather take on the world alone?

    The words of the right do not line up with the actions of the right.

    • ianmac 2.1

      Good point vto! All dairy farmers belong to a giant union Fonterra! Maynot be called a union but as a collection of members seeking the best return that they can get, it is effectively a Union.

      • Jim Nald 2.1.1

        ‘Collectivism for me, but not for you’

        • Thomas 2.1.1.1

          The left loves Fonterra, right?

          • Colonial Viper 2.1.1.1.1

            I do. It provides an excellent example of how collectively owned socialist enterprise can be extremely successful in a modern economy.

            Just look at other rural examples such as the old Kiwi Fruit Board, Silver Fern Farms and PGG Wrightson to understand how collective/co-operative approaches have also been very powerful over time.

            The next step is to promote worker owned collectives and worker owned co-operatives.

            • Thomas 2.1.1.1.1.1

              CV: Great, we finally agree. But I add the proviso that these cooperatives must stand on their own two feet.

              • Colonial Viper

                Yes, the co-operatives must eventually stand on their own two feet, and require business models and plans which will allow them to do so inside of 5-10 years.

              • vto

                You mean stand on their own two feet like Fonterra? I seem to recall it required govt to help the widdle boys learn to stand and then hold their hands while they took their first steps.

                Now that Fonterra can walk and run like a strongly growing teenager it is using that to utmost effect and starting to bully the other lads in the playground.

                some perspective ………..

                • Colonial Viper

                  Yep. The fraking RWC is what should stand on its on two feet. Oh but booo-hoooo, if it did that without both ratepayer and taxpayer propping up it would be making a $400M plus loss this year!!!

                  I’ve heard local business people who are angry with the corporate BS associated with the RWC: you’re not allowed to use the words “World Cup” or “Tent Village” or anything resembling those things.

                  This is not NZ’s World Cup its the bloody Corporate Sponsors World Cup.

                  • vto

                    Yep, don’t get me started…

                    They have taken our game and culture and heritage that has grown around it and now try to sell it back to us at the maximum world-wide prices. Scum. I have no time for professionalism in rugby anymore. They can get f….d.

                    In fact the RWC is just like Fonterra in that they make us poor kiwis pay the maximum price that can be achieved anywhere in the world! If we can’t pay it then tough tittie. That co-op can go get f….d too. Making poorer New Zealanders go without the bounty in our land…. what freakin’ planet are they on?

                    There is a heavy and fundamental flaw in this approach, not yet fully realised. It is still in the ascendancy …

      • Jum 2.1.2

        Ianmac,

        Key belongs to the International Democratic Union and trust me it is one union that isn’t about looking after the workers.

    • marsman 2.2

      The NZ Business Round Table is a Union which uses collective bargaining for their own benefit but they don’t want their workers to have those benefits. One rule for them and another rule for the ‘punters’.

    • Blue 2.3

      Big difference – one is a business collective run by experienced intelligent hard working people for the benefit of not only themselves but the economy as a whole, which they built and continue to grow. The other is the opposite – A Union.

      • Marjorie Dawe 2.3.1

        Are you saying that Union members dont work hard. I would like to see your business owners creating the wealth without any help from the workers. Cant see that happening. Also a Union is as big as the sum of its parts and there are many members to make up that Union. It is not a single celled entity at all and cannot ever be construed as one.

      • Jeff O 2.3.2

        Oh dear Blue, really not a clue!

        Knee jerk view of what a modern union is that takes me back to the 1970s.

        I reckon that the groups of people who work for a living, who choose to join a union, could run rings around the self-interested so-called ” creators of wealth” we are told to look up to.

        • Blue 2.3.2.1

          “Reckoning” isn’t really a fact. There is a reason why some risk their own capital to start and grow a business and others don’t. One group lacks the spine or intellect to do so. If it was as easy as you “reckon” why don’t Unions buy out businesses and run them themselves, if they have the talent you claim. I mean you seem to think it is quite easy to run a business. Of course what you “reckon” is a matter of no importance unless you can back it with experience on both sides. My experience of Union involvement in contributing to the growth of a business and the business trying to grow, shows a negative correlation between the two. So please name one Union that has helped a business grow and maintain and grow significant numbers of staff, just one, in the last 25 years.

          • The Voice of Reason 2.3.2.1.1

            I’ll give you two, Blue. EPMU and the DWU. They have developed a High Performance enterprise partnership model which sets out to improve skill levels (and pay) and improve business bottom lines at a small number of participating companies. The idea being that sharper work practices and upskilling leads to better outcomes for both worker and boss.
             
            Any other ignorant bigotry you need demolishing?

            • Blue 2.3.2.1.1.1

              Gee name calling, no wonder you lot barely register with everyday New Zealand with your hysteria. Having a model and having it adopted successfully by business, assuming it works, are two quite distinct things. How many businesses adopted this model and what was the outcome in terms of increased employment and a more profitability for the business? If this were true, and I doubt it was adopted by anyone keen to stay in business, why don’t unions run on a business footing using this panacea to economic ills? Perhaps a feature of the model would be for unions to pay their tax obligations on behalf of their employees (Unite for example). Perhaps the “rich” are not the only tax cheats that exist? It “sets out” to improve business practice, as you say, but did it? As no-one barring the minority of the left are aware of it, it seems not.

              • The Voice of Reason

                Sore loser, eh? You asked the dumb question and I gave you the answer you weren’t expecting. So suck it up, Blue.
                 
                Unions are run on a business model and most are very tightly run at that, with an overview from an elected  board made up of shop floor workers who don’t like seeing any of their fees wasted. I’ve been critical of Unite precisely because their business model is poor. Recruiting a mobile, poorly paid membership is very hard to sustain and leads to issues like difficulties in paying the bills. Not paying tax as a result is poor form and just gives dumbarses like yourself a stick to beat the rest of the movement with. But it is not typical of unions at all. In fact, hundreds of thousands of Kiwis choosing to belong strongly suggests that they are well run.
                 

                • Blue

                  So you don’t know of any companies (checkable references please) that use this Union model for business. Ok thats that settled. “not paying tax is poor form”???? I can imagine the pants wetting that would occur from you if this was a private company that deliberately didn’t pay tax. No wonder the poster boy for people like you is Harawira. Morons begat morons and follow morons.

                  • The Voice of Reason

                    Eh? Does google not work in your world, blue? Apart from Unite, Harawira is nothing to do with any union as far as I know. And I was dissing Terry Serepisos’s failure to pay his bills on this site just yesterday, you wally. There is no difference between his failure to contribute his employee’s taxes as required by law than Unite’s failure. Both are unacceptable.
                     
                    Any more made up shit you want to share with us?

      • Colonial Viper 2.3.3

        Blue: most CEOs couldn’t double side copy, staple and email a document through their office photocopy machine without having their hand held by a real worker.

        Without real workers trash doesn’t get picked up, engines don’t get fixed, computer networks stay crashed and supermarket shelves empty.

        In contrast, if the CxO level in most large companies disappeared no one except a few stock brokers would notice, and replacements from the workforce would step in very quickly.

        • g_man 2.3.3.1

          Really. So why doesn’t that happen?

          I mean, if the shareholders who demand profit, could save themselves potentially millions of dollars in salaries at the CxO level, you would think they’d be all for it and dumping all the CxO’s … right?

          Truth is, the workers and the bosses need each other. As you quite rightly say, without workers trash doesn’t get picked up, engines don’t get fixed, computer networks stay crashed and supermarket shelves empty. It also works the other way. Without someone to create the business in the first place, network engineers don’t get hired because someone needs to create the business of selling a network in the first place, someone needs to make the decision to build a supermarket, stock it, set up the supply chain, etc.

          Neither can do without the other.

  3. Afewknowthetruth 3

    The fascist agenda of the corporations and bankers requires that society be kept misinformed and divided, and that individuals and communities be picked off and ‘consumed’ one at a time. If people become a threat to the system they are attacked.

    I have recently been looking at footage from G20 Toronto, where thousands of men and women in dark blue uniforms attacked peaceful protesters and bye-standers with truncheons, boots and ‘crowd control’ weapons in order to protect the ‘slave masters’ and their ill-gotten gains.

    This will all end very badly.

  4. Collective bargaining is good for some and unnecessary for others, that’s why it’s voluntary, as it should be.

    • vto 4.1

      Pete, who is collective bargaining not good for?

      • Pete George 4.1.1

        Me. And all those who choose not to utilise it.

        I’m aware of the argument that collective bargainaing also benefits workers not in unions, and to an extent that’s correct. But the fact that it’s voluntary benefits those that choose to be in a union – not just through more bargaining power, but because unions have to earn their membership.

        • bbfloyd 4.1.1.1

          that’s a slick piece of contradiction there pete… maybe it’s time you just stopped trying to argue with everything that’s written here… especially as you agree that collective bargaining is the better way to go….

          sometimes you can treat politics as being about real life, and realistic solutions to real issues rather than just a game, and no-one would disagree with you…

          it’s not that hard once you start…

        • felix 4.1.1.2

          Come again Pete?

          You reckon collective bargaining is good for people who bargain collectively, but not good for people who don’t?

          Did I get that right?

          • Pete George 4.1.1.2.1

            No but that’s not unusual.

            Collective bargaining is good for those who choose it.
            And individual bargaining is good for those that choose that.

            It’s about choice.

            • mickysavage 4.1.1.2.1.1

              There is some evil person out there who impersonates Pete George and comes out with all of these amazing irrational comments that make no sense but try to sound balanced.  A bit like that site “Shit my father says”.
               
              Because Pete you can’t be serious … can you?

            • felix 4.1.1.2.1.2

              So I did read you correctly, you support the right of anyone who chooses to do so to bargain collectively.

              No need to be so rude about it. Dick.

            • mik e 4.1.1.2.1.3

              Lawyers dentists doctors politicians business barrons are all in some sort of union but they don’t get attacked by the right wing its only the low waged worker.They have far less economic power so can’t command the same amount of power that the high income earners command! When the worker tries to get some equilibrium of power the right ruling elite are there to beat the already downtrodden with any stick they can find .Its amazing how many of those dipsticks come onto this site spieling half truths and just straight out lies!

              • vto

                Lawyers are required to belong to a collective.

                Doctors and medical people are required to belong to a collective (so they can keep the number of graduates at a level which maintains their pricing no less).

                Farmers belong to heaps of collectives and have the strongest history of collectives and co-ops in NZ.

                Foodstuffs, the supermarket rorting machine, is a collective.

                So what the fuck is the problem and why the double standards?

                • Colonial Viper

                  Professionals, farmers and business people know the power of collective organisations. From the Chamber of Commerce to the Farmers Union through to Peter Jackson beloinging to three unions himself.

                  The double standards don’t come from belonging to a union per se (as it is clear that farmers, the Business Roundtable, and Peter Jackson all see the benefits of their own unions), the double standards come from YOU the WORKER belonging to a union which doesn’t have THEIR best interests as CAPITALISTS in mind.

                  • neoleftie

                    the funnest contridiction is my farming relatives all own machinery a community based group, neighbours all pooling resources to buy machines, plant trees, irrigation schemes, stock, fences and now plant and fence off waterways…but they now drink latte when in town too so hope for the future maybe.

                • Jeff O

                  @ VTO: The difference is the gut-churning fear that the powerful feel whenever ordinary workers organise themselves. So “unions bad”, “employers associations/roundtables/co-ops/combines good”.

      • TightyRighty 4.1.2

        Me, I know I can do better without the hindrance of those on the below average side of the bell curve dragging my earning potential down

        • felix 4.1.2.1

          Then bargain on your own. Who’s stopping you?

          • TightyRighty 4.1.2.1.1

            I do. No one can stop me as it’s enshrined in law. not that you like that. and in referral to your comment below, i actually don’t believe that unions negotiate maximum conditions as that would be in breach of their duty to their members, unions if involved should be looking to maximise their workers benefits.

            Felix, you really are one of the most ignorant types of people in the world, a self-delusional know it all. you’re not even funny. Just sad really. Because someone doesn’t share your world view, you think you know what they think, as you think they are morons and incapable of original thought or deviation from your view of their ideology. you are so blinded by your self importance, you can’t see how much of an idiot you really are

        • mik e 4.1.2.2

          Tighty You must be in a low wage Job if you are worried about collective bargaining

          • TightyRighty 4.1.2.2.1

            mik e, want to have a pissing contest about who earns more? i got $100 that says i win.

            • Blue 4.1.2.2.1.1

              TR I’ll meet that bet and raise you a $1000, that I win. Mik e’s not even at the start line.

        • neoleftie 4.1.2.3

          TR has a point but easily rectified but both a collective bargaining base position and a bonus scheme based on proformance KPI etc.

  5. Individualism is more than a political ‘meme’ – even though the ‘me’ ‘me’ aspect is delightful.
    The individual as we know it was invented by capitalism as the ‘bourgeois subject’ – the buyer and seller of commodities. Its a given in Capitalist Society hence the power of being able to appeal to it to divide and rule us.
    In Marxist terms the ‘alienated bourgeois subject’ is abstracted from his/her concrete social being in nature by capitalist production of labour value which becomes ‘alienated’ from the producer as the value of commodities so the producer is now alienated from work, product, her/himself and others, as no more than the value of what s/he buys and sells.
    To eliminate the individual requires more than collective contracts which are by definition cover a collection of individuals, it requires the socialisation of the means of production and of the production of goods and services for need not profit.
    A collective contract is a better launching platform however than individual contracts.

    • Colonial Viper 5.1

      +1

      where “socialisation” of the means of production, means of EXCHANGE (e.g. markets and financial exchanges) and means of FINANCE (the banking system) might occur in many different ways and forms.

      Depending on the best fit, that socialisation might occur either a neighbourhood level, community level, city level, regional level or nationally.

      The resulting outcome should be highly democratic in nature, and usually somewhat decentralised. The resulting structure might be a collective, a mutual organisation, a co-op, a not-for-profit, or whatever.

      This appeals to my POV as a democratic socialist.

  6. Oligarkey 6

    So the conclusion should be that the Council of Trade Unions and the Labour Party, plus the other left parties, should be aiming for a return to a system of centralised collective bargaining i.e. like we had before the Employment Contracts Act 1991. Australia still has such a system, and it covers the vast majority of workers, who continue to benefit from it. The difference is that Autralian workers receive about 55% of the economic surplus, where as in NZ the figure is around 45%.

    I don’t think there’s any other way to right the balance.

    • Colonial Viper 6.1

      As mentioned above by Dave, collective bargaining is not bad, but really it is only a halfway solution.

      Worker co-ops, collectives and mutual organisations must be formed.

      Workers should own, manage and operate the enterprise for themselves, not just bargain with a distant business owner or CEO whose focus is to serve the Board.

      • neoleftie 6.1.1

        Another good idea CV but how to implement…once i suggested a staff partial shareholding in a company i worked for to the owner who required increased productivity…he thought about it for 2 days and then realised its was socialism by another name LOL, almost got buy in too. now the buggar would be on the rich list but hides his assets holdings

  7. thejackal 7

    I’ve often wondered why we as a country don’t use collective bargaining to push down the price of things we import?

    National used the collective bargaining argument when they got caught out with the BMW’s. “It’s OK that we’re buying all these flash as cars in a recession because we used collective bargaining and got a good price” they effectively said. Damn hypocrites!

    • Lanthanide 7.1

      That’s economies of scale, rather than ‘collective bargaining’.

      We do it with pharmac already. Long may it continue, although this US free trade deal looks to curtail it.

      • thejackal 7.1.1

        It would seem pretty silly to sign up to an agreement that makes things more expensive for New Zealander’s. Economics of scale/collective bargaining if properly applied could ensure that items are purchased for actual cost, instead of huge profits going to middlemen. Imagine the savings to be made if planning meant things didn’t sit around waiting for somebody to purchase them, or production was closely synced to consumption thus reducing waste. Today’s technology should make such administration easy enough to implement and undertake. I would assume that a more efficient system would save enough to ensure more inclusiveness and reduce inequality.

  8. I dont have a problem with collective bargining, I have aproblem with a group of people telling me that I HAVE TO collective bargin.

  9. randal 9

    I think pete geroge is choosing to be an idiot. go ahead pete. its your choice. Dressing up this argument as choice is dissembling and indicates the extent that national will go to to try and confuse people about where thir best interests lie.
    National are expert liars and disseminators of nonsenical information but in the end people do know that collective bargaining works. If it didnt then National wouldnt bother so much.

  10. burt 10

    These graphs would be meaningful if they were broken down into income bands. Clearly the increase in the minimum wage is likely to push the red band up but have minimal impact on the blue band. Likewise MPs not getting much increase in the last few years (after circa 9 percent every year under Clark) is a good representation of the issues with the blue band. If you torture the numbers enough you can get any graph you want….

  11. Darien Fenton 11

    Even IMF and the OECD now point to low rates of collective bargaining in countries, including New Zealand, as a contributor to the global financial meltdown. Put simply, if workers don’t get a fair share through joining together in unions and collective bargaining, they are unable to contribute to the economy and pay their way.

    • neoleftie 11.1

      to expand on that – with depressed wages, hence less tax rake, and more profits to the owner class who use the real stuff to leaverage and debt gear up the waazoo and workers cant save, contribute or invest due the competitive uncoupled labour ( slave ) market.
      Actaully its the workers fault for allowing this to happen in the first place, silly old dullards that we are.

  12. tc 12

    Pete g’s comments assume there is choice to bargain collectively, something the NACT are keen to eliminate if it involves a union. Just look at the recent treatment Darien rush security employees are receiving.

    • Marjorie Dawe 12.1

      Not to mention the past owner who used to be rich but isnt any more. A good example of a business owner who gives a toss about anyone if he sees an opportunity. Screw the workers and anyone else who gets in the way of his “success”. What goes round come round eh.

  13. Jum 13

    Together we are strong, divided we are weak; when are people going to get this? They certainly don’t in America – for such a huge country they’re extremely naive, bordering on stupid. Don’t let’s become like them.

    • neoleftie 13.1

      well IMO since the 80’s with the rise of materalism, consumerism and the break down of social cohesion into the one more focus upon the individual and not social actors such as church, family and other groups etc there has been this purposeful and meaningful designed shift toward faster and faster change – freedom of choice and opportunities is really a myth..the individual is more shackled than every dulled down by witless enterainment and blinded by material needs and wants…the cry of me me me first please sir is prevelent in our dumbed and blind society.
      Time for a visionary leader and party to unshackle the masses and provide some needed direction.
      A new Lange who understands macro policies maybe…

  14. Brett 14

    The collective can go suck my balls.

  15. Oligarkey 15

    Bett – you were born in to a collective, and you will live in one. Otherwise there would be no roads for you to triumphantly strut your ego extension around on. So have a little respect for the philosophy that has allowed you all the benefits of the collective (education, health care).

    Only collective bargaining will make sure workers get a socially just share of the economic surplus. Otherwise most people in your country are just serfs. That’s not a robust community or democracy – that’s a fractured, dysfunctional society, with an extremetly warted-down and elitist form of democracy. I don’t want that, and i’m sure most New Zealanders don’t either. We don’t like to think of ourselves as elitist snobs generally – it goes against our cultural values.

  16. Meany Beany 16

    This is what happens when unions lose their power:

    USA’s Biggest Corporation:

    1968
    Corporation: General Motors
    No. of Employees: c800,000
    Average Shop Floor Worker Wage: $ 40,000
    CEO Salary: $ 4,300,000
    CEO Tax Rate: 70%

    2008
    Corporation: Walmart
    No. of Employees: c800,000
    Average Shop Floor Worker Wage: $ 18,000
    CEO Salary: $ 23,000,000
    CEO Tax Rate: 35%

    All figures in 2008 dollars
    Excludes regulated telephone monopolies
    Source: Paul Krugman, “The Conscience of a Liberal”, pp139-140

    CEO Remuneration – Average Multiple of Workers Pay in USA

    1960’s: 40
    2000’s: 367

    Source: Paul Krugman, “The Conscience of a Liberal”, p142

    • Colonial Viper 16.1

      The US Right Wing have been out in force discrediting Krugman more and more in the last 12 months. However what Krugman has to say hardly matters in the real world; the White House economic team is staffed by Goldman Sachs alumni.

    • Blue 16.2

      So your comparison is one company from the 1960’s with a highly skilled workforce, building vehicles that were in demand in a buoyant period of economic growth, to…. wait for it…..the equivalent of the Warehouse in the US peddling bulk goods with low margins in the middle of a recessionary period of the worlds economy. Why not compare a Doctors salary now with a coal miners wages in the 1900’s? It has as much veracity.

  17. mik e 17

    Blue you have no economic credibility!Many other of the worlds top economists & business people like Buffet who’s worth more than this counties yearly economic output have agreed with this assertion .Your anal ogy doesn’t do any credit to your bullying argument.

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