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Industrial action is one way to increase wages

Written By: - Date published: 8:30 am, May 17th, 2018 - 20 comments
Categories: Economy, employment, spin - Tags: , , , , , ,

Despite Simon Bridges’ confidence in discredited economic theories and their protestations to the contrary, the Nats seem intent on doing everything they can to fight ordinary workers getting a pay increase by creating a false narrative that Labour has somehow caused an unreasonable number of strikes with its policies. Let’s look at what their finance spokesperson is saying for a moment:

Firstly, for a party that is relentless at pushing tax cuts as a way to increase take-home pay, you’d think if there was any truth to that position, they would be supporting strong negotiation from workers and keeping the government out of the equation so they can negotiate fairly and increase their take-home pay without even having to touch taxes, as private sector industrial disputes going workers’ way means wages increase without the government having to bear any of the cost. But the concern, of course, was never with increasing pay for average people- that’s just an excuse to get their hands on taxes that affect the wealthy.

Secondly, this demonstrates a disturbing misunderstanding of the government’s role in industrial relations. The government is not responsible for preventing strikes, except insofar as it needs to budget enough money to reasonably allow government employers financial room to move on the negotiations. (something the government is already doing in any case, so can’t be the point of this criticism, even though it is the only thing that could be classed as “poor economic management” in this area) Anything else is putting their thumb on the scale on the side of the employers, and that may be what’s really behind this attack. It raises questions of whether she is missing the bygone days of setting employment law at such an intimidating place that workers were intimidated into simply worrying about keeping their jobs and didn’t feel empowered to negotiate on a level playing field. More strikes is not unhealthy. It is a sign that we are catching up a little bit to a balanced position on industrial relations.

In contrast, the government is taking an all-of-the-above approach to increasing wages- lifting the minimum wage cautiously but aggressively, transforming National’s tax cuts plan into better targetted spending on families, (a good place to start, although families aren’t the only people in need of additional support) and reversing as much of National’s employment law changes as they can get New Zealand First onside for. It is a good start, although as usual it needs to be acting much faster and much more radically if it wants to make a difference at the timescale New Zealanders need, but that may simply be the realities of government constraining them.

Looking at a longer term scale, given how productivity has massively exceeded wage rises, it would seem a very good argument that we haven’t had a truly balanced industrial relations environment for decades. It would be nice if Labour would act on that, but there is a real argument that the defensive strategy of the current Budget Responsibility Rules has painted them into a corner here given that there are indirect costs in public service wage rises to increasing employees’ bargaining power, and they need to seriously reconsider the less economically literate parts of those rules to be able to afford such things, like limiting spending to an arbitrary proportion of GDP, and utilize the out they gave themselves about deficit spending to address infrastructure run-down while still spending on other priorities.

Regardless of the government not urgently shaking things up and moving towards useful policies like a Universal Basic Income, or at least relaxing requirements on the Jobseeker benefit in the meantime to push conditions up at the lower end of the workforce*, it is at least managing a useful counterpoint to the Nats policies of not taking sides unfairly, acting ethically, and genuinely being on the side of workers. The Nats are in a catch-22: there is no way for them to reasonably criticise this without being called out for the dog-whistling they can reasonably be accused of doing against the average worker.

Adams will likely protest that she opposes empowering unions because she feels it stymies growth- firstly, that’s simply not true. Higher wages for workers earning below average generally increases growth by improving circulation, and the money often does end up moving back up the economic pyramid over time anyway regardless, but doing so with larger circulation usually means that the wealthy end up with a relatively smaller slice of the pie, but a larger slice than if they’d simply be concerned with what their share was. Secondly, even if it did stymie growth, it is reasonable under any just theory of the justification for economic inequality that workers demand that increased growth puts them in a better situation than they were in before the growth. This is the “minimax” (maximize the minimum utility) model that Trickle Down economics aimed to meet in the first place. If strikes are required to increase wages and conditions relative to cost of living for workers, then strikes are a reality we need to accept.

Finally, there is a fact about wage settings and industrial relations that National is simply not considering: If your growth requires shrinking real wages when inflation, cost of living, and accommodation cost growth is all considered or accepting pre-shrunk wages, or even increases wages at so slow a pace that people still can’t reasonably access everything they need to have a cheap but decent life with time and money for a little recreation, then you are effectively asking some employees to subsidize profits for business owners, shareholders, and those whose wages are keeping pace or exceeding those increased costs. Just like it shouldn’t be on employees to subsidize inefficient businesses with underpriced labour, it should also not be on employees to subsidize excessive profiteering for those already doing well with underpriced labour. Economics is a sword that can cut both ways, and subsidies for the wealthy are far harder to bear than subsidies for the poor.


* Requiring jobseekers to take any and every job they’re offered is absolutely a form of subsidizing bad employers and insecure employment, and a force in the ongoing casualization of the workforce. Beneficiaries should be able to turn down a job if WINZ cannot positively establish that they were capable of doing the job, that it would have provided secure employment, and would have treated them with dignity. (ie. people should be able to turn down jobs offered to them if there is evidence of a discriminatory or hostile work environment) This step might be less required if WINZ would also consider abolishing stand-down times, which are the real reason why insecure work is so deadly to beneficiaries, or accept jobseekers not applying for insecure work in the first place as still looking for employment in good faith.

20 comments on “Industrial action is one way to increase wages ”

  1. Bill 1

    Putting aside any “road to Damascus” moment by “top dogs”, any situation founded on exploitation can only be changed or challenged to any meaningful degree by those being exploited.

    In terms of the workplace, that means it’s down to workers to affect change.

    Governments have always sought to contain or constrain us through employment law that’s main purpose has always been to ensure that things keep ticking along.

    A piece of legislation to increase a minimum wage here, or offer an employer subsidy there, is very much in keeping with that main government concern of “economic management” that preserves the status quo.

    If wage increases, rather than being a short sighted end in themselves merely seeking to secure “bigger, better crumbs”, are to be a part and parcel of ending exploitation, then imaginative and far reaching industrial action is the only means at a workers disposal.

    Once was, most workers understood that. But horizons, over years and down through generations, have shrunk quite remarkably.

    • patricia bremner 1.1

      Bill, though I agree about shrunken horizons, I think workers are realising that they now have a voice in “work safety” and “working conditions” as well as “renumeration”.

      The right to form “collective bargaining” will change employment documents from “individual contracts” to “work place agreements”. This allows negotiation by a representative to management by a group , rather than solo efforts to change a personal contract.

      It was a subtle but overarching change, and it is beginning to bear fruit. Thank you Andrew Little for drafting that policy.

      I loved Ian LG’s response… “These employers are breaking the law!” Great to be as a group talking about employers shortcomings, in expecting unpaid meetings or work.

      However, frivolous strikes will alienate the public. It needs public sympathy.
      The Opposition didn’t think change would happen!

      They are finding their comfort being well and truly challenged. IMO.

      • Bill 1.1.1

        A strike is only one of a number of tools available to workers taking industrial action, and yes, I agree there have been many strikes that seemed to have embodied a stubborn reluctance to “box clever”.

        On advances in workplace agreements and workplace safety, welcome as they are, they do not and will not push the envelope beyond the confines of “current arrangements” – in many ways they normalise the basic foundation of work relations that workers and unions used to rail against.

    • One Anonymous Bloke 1.2

      They only strike for more pay,
      They say,
      “Seeya mate!”
      “Yeah, seeya mate”…

      Mark E. Smith, C’n’C Stop Mithering.

    • Matthew Whitehead 1.3

      I don’t disagree with the general thrust, ae.

  2. soddenleaf 2

    For many years companies that did not force unpaid hours on their employees competed with those that did not, many may have gone bust. Similarly some farmers grew nature belts, sprayed effluent back on the paddock and didn’t over stock thus paying for feed etc. So how Bridges can call himself an advocate for small business or farmers, or even energy workers who shift to the renewable sector is astonishing. It’s as if he’s the b team, designed selected to all the nonsense idiots tell themselves under some idiot belief thatvoters might vote for him.

  3. bwaghorn 3

    Reply to bill

    “Apiece of legislation to increase a minimum wage here, or offer an employer subsidy there, is very much in keeping with that main government concern of “economic management” that preserves the status quo”

    Yup until government works out how to lower the cost of living as opposed to handing out lollies nothing will change .
    It’s just an arms race with the haves (Mark Richardson s type) scooping up every gain the have nots get.

    • Draco T Bastard 3.1

      Yup until government works out how to lower the cost of living as opposed to handing out lollies nothing will change .

      We all need three square meals a day.
      We all need good clothes to wear.
      We all need a place to live.
      We all need a place for ongoing education and
      We all need our health needs seen to.

      That’s all non-negotiable.

      This is where productivity comes in of course. An increase in productivity reduces the number of people needed in each sector thus freeing up people to work in other sectors and even in new sectors.

      Increasing productivity is how to lower the cost of living as it decreases the number of people needed in each sector. The problem is that all the productivity increases have been stolen for profits so the majority of people don’t see life getting cheaper but getting more expensive.

  4. greywarshark 4

    Matthew’s post was put up at 8.30 am. It is long, so read it in bits, come back to it. Pick out one thing at a time to discuss, question. But don’t do the tl:dr thing. That is lazy. And this world doesn’t give much to lazy people. If you are a hard worker but lazy at getting informed, doing the thinking, then also you are likely to not get much either. We have all heard some twerp praising themselves for success at getting money or assets by saying that they did it through hard work. Possibly, but likely to be true if they also thought about what action, got informed so as to do the best.

    It should be that unions should conduct weekend workshops in practical economics from the point of view of explaining how economics works from a grassroots point of view, and the effects of inflation, counted in CPI, and total inflation as felt by the average person, which would include housing costs, and the flow of money and why consumerism is important.

    A discussion on what money is, why it is important, how it can be made to work for you, should be a regular part of union activity. Now that some religions are becoming businesses, they teach about finance at sunday school, (I’ve seen their booklets.) Unions need to teach this worldly stuff and not leave it to the God franchises.

    Discussions on household finance and how the conventional life ties you to hours of work and earnings and mortgage payments as if that is all that life is about would be the first time many have thought through the background to daliy life and politics.
    Thinking how a good life can be managed on a small sum, with an understanding of the opportunity costs involved would help to flesh out the work that unions do in going for more money. People could think about what sort of life they want. That decided they might surprise employers and go for better conditions but no wage rise this year, they might want to ensure minimum hours per day and a minimum and maximum working week, plus a goodwill clause where some workers will form a group that are able and prepared to be called on in emergencies to work longer hours than usual. Next time they may go for a wage rise, and a mid-year evening out for all, as a bonding exercise that gives equal pleasure to all attending.

    Money is just bits of something that have an agreed universal value where you are using them. Cigarettes have been currency in prisons for instance. The authorities and business leaders are even trying to change it from having a physical form in useful sized bits. This means that all your transactions will go through a snooping machine. I don’t like that and I don’t think all interactions between people involving exchange should be surveilled, it leads to everything being under scrutiny.

    The idea that other people should decide things for you as unions have done in the past, when to up the piece rate, go on strike etc, needs to be totally changed. I remember my union refusing to allow workers to make arrangements with our employer to suit our requirements because it would create a precedent at other workplaces. People have to understand their employer, and the two sides be able to parley, for the best outcomes considering short, medium and long-term.

    We need the strength and mass of unions. We also need to clear away some of the socialist wish-lists based on rosy ideas of a workers’ paradise. One had close to that in NZ when we had the Cooks and Stewards being well paid, with firm rosters, having free air travel I think or else cheap, so that they could live anywhere in NZ, long weeks off so that they could have a family business where the wise invested their earnings and worked in the off-times. It was so good they had a tied union so that few who were not family and friends could gain employment in this heaven. But still they went on strike and upset the lives of their fellow citizens, whom they professed to care about, so that other workers on holiday, their children travelling in school holidays, could be held to ransom.

    Unions must have participatory membership just as as citizens we need a participatory democracy. No other sort can be relied on to do what is needed to keep our systems going well and meeting needs in the polity. Lazy citizens stating what they want and expect to get, uninformed and without studying the field of possibilities and needs and the shape of a good and satisfactory society, are doomed to be sent to the virtual meat works. Read Animal Farm, and see NZs as we are, and that the leaders just think of us as animals to be exploited. In Animal Farm we see the story illustrate the saying: ‘Power tends to corrupt, and absolute power tends to corrupt absolutely’. If the option of being informed is not availed, then people are giving up their power. And every protest is trying to reverse that process, and fighting a losing battle. But the lazy find satisfaction in whingeing, being the victim, venting in outrage at minor things like some sexist comment made to our PM recently, which attracted 69 comments here. When there are more important economic matters to discuss the total people involved will be under five and the total comments under 15. We have all been lazy, the work must be done to get informed, and share that information; outrage at passing trivia is no substitution.

    • Matthew Whitehead 4.1

      This is actually me making an effort to be shorter, by the way. It’s about 50-60% my usual length on a complex subject. I am trying to keep to around 1k words now.

      Don’t disagree on your thoughts though.

      • greywarshark 4.1.1

        I appreciate your words, every one of them. With or without wild overt emotion.

    • KJT 4.2

      “But still they went on strike and upset the lives of their fellow citizens, whom they professed to care about, so that other workers on holiday, their children travelling in school holidays, could be held to ransom”.

      I never had much time for the Cooks and Stewards Union. However, that statement is just plain wrong.

      For almost all the rail ferry strikes, the crews agreed to take passengers and their cars without pay. It was the employers who dictated. “No rail, no sail”.

      The extra rent that the Managers, Bankers, National party cronies, and shareholders, Unions, now take from the economy, makes the Cooks and Stewards look like saints. At least their extra pay and conditions, and those small businesses they started, put money back into the community, instead of permanently removing it.

      Lawyers, Accountants, Doctors and Clerks, and many others, did not hesitate to use the example of the Cooks and Stewards, to lever their own pay rates, and conditions up. While at the same time getting all self righteous about “Militant Union strikes”.

      As for the tied Union where offspring, family and siblings inherited. Isn’t that what the wealthy have enjoyed all along? Often with far less justification.

  5. … ” Anything else is putting their thumb on the scale on the side of the employers, and that may be what’s really behind this attack ” …

    ———————————————–

    Oh lets not beat around the bush any longer – we all know the hollowing out of the unions happened decisively under Ruth Richardson’s 1991 Employment Contracts Act, – and was designed to destroy collective bargaining and implement individual contracts instead.

    And with the ultimate goal of drastically LOWERING wages.

    With the added benefit to the corporate’s and high end earners being the working people paying a disproportionate amount of tax (compared to those on the higher income brackets- particularity corporate’s ) .

    So without further ado lets read the words of Ken Douglas and what he had to say about it yet again :

    ——————————————————-

    Ken Douglas, then president of the New Zealand Council of Trade Unions, recalled in the 1996 documentary Revolution:

    … ” The Employment Contracts Act was deliberately intended to individualise the employment relationship. It was a natural outcome of the ideological propaganda of rugged individualism, of self-interest and greed and the appeal to individuals that you could find better for you by climbing over the tops of your colleagues, your mates, and so on. Ruth Richardson was very clear, very blunt, very honest about its purpose. It was to achieve a dramatic lowering of wages, very, very quickly ” …

    ———————————————————

    Ruthanasia – Wikipedia
    https://en.wikipedia.org/wiki/Ruthanasia

    And as wages in Australia went up by leaps and bounds , – wages in New Zealand declined !

    And after 3 decades of this rort this is why we have so many working poor in this country. Why do you think there was a diaspora during the 1980’s and 1990’s to Australia from NZ ??? Why do you think there are now around 650,000 New Zealanders living more or less permanently in Australia ?

    Because they all like Koala bears and Taipans ???

    And yeah sure , – there were incremental increases over the decades , – but that was only to keep a lid on the seething anger bubbling under with such appallingly low wages in comparison to the actual realistic costs of living and having any quality of life at all . Those neo liberals responsible for these conditions well knew they could only push it so far but that didn’t stop them pushing the envelope to its maximum tolerance – virtual subsistence wages that needed to be topped up by ‘ Working for Family’s’… AND who footed the tax bill for that as well ? ,- disproportionately – the bloody workers !!!

    And what did the John Key led National party spend its time doing for 9 years?

    Passing such anti worker laws as the ‘ Hobbit Laws’… in favour of FOREIGN BLOODY CORPORATE’S IE : WARNER BROS.

    Yeah bloody right.

    Wankers.

    So don’t try that crocodile tear bullshit on around here, National party.

    Your as guilty as Roger Douglas and Richard Prebble was in your agenda.

    Want proof ? Here:

    New Right Fight – Who are the New Right?
    http://www.newrightfight.co.nz/pageA.html

    • Matthew Whitehead 5.1

      If the law didn’t put me and/or the site in jeopardy for not beating around the bush, I would’ve preferred to be more direct, too. But I would prefer not to drag our trustees into court even more.

      And yeah, that’s a good overview of the history.

    • Bewildered 5.2

      None of above is proof simply opinion and really adopting the old age mistake of confusing correlation with causation , To suggest the answers is unions is very simplistic. Australia wages grew ahead of ours due to yoy growth in gdp and productivity for many years been ahead of ours and all ozzies enjoyed the benefit theire resource sector and China growth had on thier economy including benifits on wage growth . Likewise globalisation has also impacted wages; no point having high wages for local goods that can also be imported for lower costs: the workers will simply by the imported lower cost items unless you close your economy with down side that has on choice and cost of good for workers So are decline in Union the reason and the answer, not really Union really are an old world solution for old world problem That’s what visionary like Richardson, Prebble and Douglas realised Saying that if one wants to join a Union all power to them, but they should not be forced to nor should union have special privileges or power to the detriment of a modern economy and world

      • WILD KATIPO 5.2.1

        ^^^

        Complete ignorance and denial of history to provide a narrative to the point of arrogance.

        Australia’s mining contribution to their total economy was approximately 5%.And in Australia, – they saw what was happening in NZ and didnt want a bar of it.

        In fact a huge campaign was launched in Australia by their state owned broadcasting when John Howard attempted to introduce’ free choices’ regarding detoothing unions . With the result that after 6 months of continual massive public demonstrations Howards attempts at policy’s similar to NZ’s Roger Douglas destructive reforms caused him and his party to be voted out of office. It was a direct result of attempting those ( Mont Pelerin inspired ) measures that ended his long reign.

        Globalization was a direct result of neo liberalism, destruction of unions and the lowering of wages and living standards and also , in NZs case, the removal of trade tariffs for free trade with CHINA and the like meant our country was flooded with cheap garbage. Which also destroyed our manufacturing indusry’s, – small though they may have been . And that’s only the beginning. I could go on. For a long time .

        However its late , and I wont honour your stupidity with any more in bothering to go on. History and the facts speak for themselves. You show your complete ignorance / dishonesty with that diatribe. You also seem slightly illiterate or foreign yourself ,- and I suspect the latter.

        If so you dont have any legitimate right to comment on things you dont know anything about regarding the history of this country. Unless of course you are attempting to justify your current vested interests.

        Begone.

      • KJT 5.2.2

        We had the same increase in commodity prices and trade with China. A bigger increase per capita than Australia.

        The fact our wages have dropped behind Australia is due to our anti worker policy settings. The deliberate Neo-liberal policy settings pursued by our Governments. As all the evidence shows.

  6. patricia bremner 6

    Thanks Wild Katipo, good review and reminder of what we had and how we lost it.

  7. Figo 7

    lets cap politics wages to 100K for a start.

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