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:
We warned the Govt it’s approach to industrial relations would see more strike action and now bus drivers, port workers, train drivers, nurses, midwives and even the printers responsible for printing the budget are talking strikes #PoorEconomicMgmt
— Amy Adams (@amyadamsMP) May 15, 2018
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.