Written By:
all_your_base - Date published:
2:55 pm, May 15th, 2008 - 70 comments
Categories: tv, wages, workers' rights, youtube -
Tags: contractors, fair go, junk mail, nz first, pay, reachmedia
The last couple of episodes of Fair Go have rightly taken aim at a distribution company – Reachmedia – that rips off young kids by paying them peanuts.
Reachmedia (half owned by NZ Post) has been paying young kids sweatshop wages to distribute pamphlets for the likes of the Warehouse, Farmers, Michael Hill Jeweller, and Progressive Enterprises (the company that owns Woolworths and Countdown). And to add insult to injury, over the past few years Reachmedia has been cutting wages.
13-year-old Cassie Cocurullo used to get a around $2 for folding and delivering 100 pamphlets to 100 homes. She now gets a pathetic 50 cents. Cassie is hired as a contractor, rather than as an employee of Reachmedia. This means she’s not entitled to a minimum wage – instead she reckons her wage is about 25 cents an hour. Fair Go suggests that five and a half thousand Reachmedia workers are in the same boat.
So what’s Reachmedia’s excuse? Their CEO Paul Forno told Fair Go:
We think our pay structures are appropriate for the work that’s undertaken… we believe the contract model works successfully for Reachmedia.
Let’s be clear about this: It works well for Reachmedia because they’re getting slave labour out of it. And slave labour sure helps drive up profits. As Cassie said, “it’s like a third world country or something”.
I suppose one could hope that some of Reachmedia’s clients might be prepared to stand up for the contractors. Nope. When approached by Fair Go they all passed the buck too. Fortunately there’s some legislative light at the end of the tunnel for workers in Cassie’s position.
There’s a private member’s bill coming up that aims to ensure contractors are paid at least the minimum wage. Norightturn has a good short description of it. Labour, the Greens and the Maori Party are all in favour. But National, and astonishingly NZ First, aren’t. Perhaps we shouldn’t be surprised the Nats are supporting a large corporate over a 13 year old kid, but come on NZ First, we know your heart’s in the right place – do the right thing!
Fair Go say they’re going to continue looking into cases, so if you have any info that could help, make sure you contact them. As Kevin Milne put it, these workers “don’t ask for much, but surely they deserve more than Victorian chimney sweep rates.”
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You know, we get criticised by people because we don’t care enough about whether some ex-civil servant faked her CV to bother covering it and you know why? Because it’s a distraction, a trivality. We can only produce a few posts a day and the real issues must come first – like thousands of kids being exploited.
Politics should be first and foremost about the big issues that affect everyone, and the biggest among those is wages.
Good on Fair Go.
I understand the principle you are arguing but I worry about the practical reality.
One of my children has a paper run doing the weekly community paper. He gets about $10 a week doing it. Now he does it very slowly and chats to the neighbours (and they enjoy that), pats dogs and dreams dreams as he goes. If he was paid by the hour it would be uneconomic for the paper company to pay him because he is slow. If they had to pay minimum wage I doubt he would have a job and they likely would not deliver at all or they would have an adult do it by car like the morning paper.
Would that be a good outcome? He loses a job that teaches him about reliability, responsibility and community, and gives him exercise, as well as the independence of his own pocket money. The loss of the money is no issue, but for some families who aren’t as lucky as ours, that could be a real loss for a child.
That is disgusting. Reachmedia [deleted] sound like scumbags. I’m not surprised Progressive Enterprises is one of their clients. They treat their child workers the same as their adult workers – extremely poorly.
I have to say it wouldn’t matter whether they’re contractors or employees. The private member’s bill won’t do anything for these kids. There is no minimum wage for people 15 and under.
Government had the opportunity to fix this when the Minimum Wage (New Entrants) Amendment Bill came through but they didn’t. They didn’t even eliminate youth rates for good, in spite of a good campaign from Radical Youth, Unite etc.
The Greens are about the only political party who are on to it when it comes to young workers.
This is very similar to a case that is going on in the Manakau District court, involving a guy called Taito Philip Field. Did nt he, while a member of parliament do the same thing – pay slave labour rates to vulnerable contractors.
The delivery of flyers only reflects badly on the stores advertising those products, hopefully soon we will be rid of this pest!
This is less than I used to make ‘100 years ago’ delivering papers in Auckland on my bike.
And regarding the civil servant in question – it speaks more to the lax standards around reference checking in the public service at the time and person in question generating an environment where the correct procedures and actions could be usurped.
And Steve while I agree the real issues should come first the booze up at the pub an the Batman post while entertaining pretty much fall under the heading of trivial.
[lprent: Trivial might be the case (although I enjoyed the batman one). But the posters make posts on what they feel like. I’m the only one who can impose a limit. But that is related to my name being the only visible one on the site.
No-one can tell them what to write about. This isn’t directed at you HS – your comment about lax standards is my view as well. There is some bozo called big bruv demanding to run the site in my mailbox, where the moderated live until released, or as he is banned – destroyed.]
Mind you it would be quite interesting to test whether these workers are in fact contractors. I mean, how likely is it that she is truly running her own business? Who pays the taxes? Is she GST registered? Does she provide her own tools for the job?
Don’t know much about it but someone could take a case to the Employment Court to see if these kids are contractors or not – if they’re not holiday pay, sick leave etc. all applies plus it would be an excellent way to highlight the issue and embarrass Reachmedia.
Insider, there’s an easy solution – benchmark pay against quantity of pamphlets delivered.
Say, 100 pamphlets to 100 houses (given junk mail I’d expect 600 to 100 houses but that aside…) would take an adult twenty minutes or so. At fifty cents, they’re being paid an equivalent of $1.50 an hour (based upon the rate an adult could do it).
Base it upon a vaguely respectable rate, $6 an hour, and you’ve got something that might be a touch more realistic. This would be $2 for 100 houses’ delivery. If the kid wants to take three hours, their hourly pay will be quite low, but at least there’d be something to justify it!
Disclaimer: I haven’t seen the clip, I can’t access youtube at present.
rjs131. Yeah Taito’s alleged behaviour is scummy too. You won’t find anyone who exploits vulnerable workers being defended here.
“You won’t find anyone who exploits vulnerable workers being defeated here.”
It is probably immature of me to point of the mistake here but it really gave me a giggle.
Whilst I think these kind of companies are scumbags this is not slave labour. No one is forcing anyone to do these jobs. We are always hearing about how tight the labour market is with record low unemployment so why don’t these kids go and get themselves a job that pays more?
Captcha: Expecting Wood – Good news for Mrs Joker
insider – I take your point but however I look at it I can’t help but see these kinds of pay rates as anything but exploitative. It’s made worse by the mealy-mouth BS from the CEO about ‘admiring our stakeholders’ and ‘appreciating the efforts of our team members’ or whatever. Surely we could find a solution that remunerated these workers more fairly.
you wanna see the right wing nutters going off on this one on trademe opinions…they think its wonderful to make a profit out of kids
what insider said…
Matthew: I think you may be under estimating the time taken to deliver ‘junk mail’.
Really Andy? If I underestimated it that means that the companies are even worse. I’m not sure what your point is there to tell the truth.
However, having said that, I’ve delivered pamphlets (three guesses who for, the winner gets an emoticon of their choice) and I’d average three houses a minute, so I stick with the estimate (it’s a rough one, to be sure, but not that rough).
Running a system based upon houses and not time at least gives some fairness to the system – then the kid can choose their own pace. And if that’s what reachmedia are doing, then they’re basically paying $1.50 an hour.
Also got to remember the folding time, which can be arduous, so less than $1.50 an hour I’d say. On the positive side I see the “Property Brick” is about to be discontinued as a delivery in some areas. Thank god for that!
Matthew, you were fast!
But still what insider said…..
Nice to see Fair Go covering this story. Six months ago, a Catholic agency — Caritas Aotearoa New Zealand — blew the lid on the industry with a study.
See a news report here: http://www.nzcatholic.org.nz/viewDocument.aspx?DocumentID=1329
And Caritas’s press release: http://www.caritas.org.nz/?sid=1078
And the full report: http://www.caritas.org.nz/dox/Domestic%20Advocacy/Delivering%20the%20Goods.pdf
Oh, and in case you were wondering, no, I don’t work for Caritas 😉
[Apologies for the links. Maybe an admin person can linkify them.]
My son gets paid by weight of papers.
One of the points not addressed is that children can’t do these jobs without parental permission. They are not full time jobs on which we depend to live – they are pocketmoney. So can they really be slave labour given I have weighed up all the other benefits and my sone has managed to buy himself his heart’s desire?
Children have been doing paper runs for generations, and I;m pretty sure I have seen this story more than once in my life. I wonder if the longevity of paper runs indicates the financial/social balance is pretty good.
Oh and BTW, how many of you pay minimum wage for babysitters?
Businesses owned by the Labour government seem to be making a habit of flouting responsible labour practices:
“Air New Zealand’s Shanghai-based flight attendants are paid a quarter the salary of their NZ colleagues – less than the legal minimum wage here.”
http://www.google.com/search?source=ig&hl=en&rlz=&q=chinese+air+new+zealand+steward&btnG=Google+Search
insider: what is the minimum wage ? Our babysitter charges $10 hour however she doesn’t pay tax, acc or gst so I think she is doing ok.
Mawg, funny you try to tie shoddy labour practices into government ownership, when in fact it’s actually just capitalism at work. The government exerts no control over Air NZ, nor does it control Reachmedia. From what I’ve seen where the government does exert some influence the employment practices tend to improve.
The question you should be asking is why are these kids taking those jobs? Nobody is forcing them to do it, so they must be happy to collect the money.
It hurts the lefties but it’s undoubtly true: demand and supply rule in the capitalist marketplace (and the world). Tough!
Yes erikter, we live in a market economy and in that economy the market is the mechanism by which people’s pay is determined. That doesn’t mean we have to accept it.
As an aside, I notice some of the reader feedback suggested the workers go on strike – unfortunately that would be illegal under Labour’s ERA, which forbids strike action outside of the renewal of a collective agreement, and in some cases health and safety.
I agree with Insider. What are the parents doing?
is that a rhetorical question…what are they doing?
Tane: “Finance Minister Michael Cullen as holder of the Crown’s 82 percent shareholding in Air New Zealand;” http://www.beehive.govt.nz
So the Michael Cullen holds 82% of Air New Zealands shares and yet has no control over it ?
“Reachmedia (half owned by NZ Post)”, ditto the shareholding Minister for NZ Post.
” # We paid our sole shareholder, the New Zealand Government, a dividend of $30.8 million.
# Since New Zealand Post was incorporated in 1987 we have paid more than $1 billion in dividends and taxes to the Government.”
http://www.nzpost.co.nz/Cultures/en-NZ/AboutUs/NewZealandPostToday/FastFacts/
So am I right in concluding that it is looking like a socialist Labour government is using loop holes in the employment law to underpay children and Chinese workers ?
Nice try, randall. You used “rhetorical” in a sentence (although possibly not correctly). You also displayed again your blossoming affection for the ellipsis. But you forgot to start your sentence with a capital letter.
Nice robinsod impersonation Billy, but you began a sentence with a conjunction.
I used to help these kids out by delivering for them in the course of daily exercise – the challenge was to post without stopping the bike, almost as therapeutic as dumping reams of the crap whenever passing a public bin. The organisers claimed that they checked up on deliveries but I knew the tight-arses would never spring for that – never any repercussions, besides who’s going to complain about not getting this garbage? Nowadays I just boycott as many chains as I possibly can.
Mag. It’s not the government, it’s a company part owned by an SOE. And as you know, SOE’s operate as independent companies, the Government has barely more power over them than a shareholder does over a company… so this is two steps removed from any shadow of ministerial control…
…but that’s not good enough, the government should use it’s weight and moral force, even if it lacks directive power in this case, to force Reachmedia to sort out its act.
captcha: ‘mature visit’. yeah, tell that to the girlfriend. chance would be a fine thing.
Just a point- while we live in a market economy, we also accept that there are boundary conditions that it is unacceptable for the market to breach- like the minimum wage laws. We also usually allow strike action and the possibility of collective negotiation in order to make sure the market isn’t just a race to the bottom. I’d definitely view it as a loophole that said laws don’t apply to contractors.
As for parents- where should they come into it, exactly? It’s primarily the company’s responsibility to pay a fair wage. The parents CAN teach their children about negotiating with employers, but kids who deliver circulars don’t have a very strong bargaining position in the first place. At least public opinion is helping out here…
As for them being kids- don’t we have adequate provisions for training wages and trial periods?
It’s also pretty sick to blame the government for this happening just because NZ Post is an SOE and has a stake in the business responsible.
Actually Steve, if you are a shareholder in a company and have 82% of the shares you can make the company do whatever you want. In fact the company can’t do anything without your consent.
What you need to find out in this case is whether the government does own 50% – 51% of Reachmedia through NZ POST. If they own 49% or less then they can possibly claim their hands are tied but if they own 50% or more then they are definitely able to change the pay rate.
I personally think Mathews suggestion is a good one, either get paid by weight of brochures or amount of brochures delivered. And make that amount reasonable so there is an incentive to deliver as many as you can as quickly as you can.
I also think that even though these brochures are being delivered by kids the amount they are currently getting paid is a joke. And Fair Go is right to raise it as an issue.
My young daughter worked for these people very briefly a few years back. After waking in the rain for two hours to make about $3.00, I told her to quit.
The problem she now has is employers who refuse to pay her the minimum wage. They’re paying $11.50 / hour. She doesn’t want to make an issue of it because it’s her first job and she wants to get a good reference from them when she leaves to go to Uni. There is no union. he wont let me say anything to her employers.
If anyone is wondering why wages suck in New Zealand….You’ve got it right there.
Two questions – how long has the current legislation been in place that allows this to occur, and second, why is it taking a private members bill to address it ?
This should be right up the Governments alley….so tough ask to tar NZ First/Nats with this one, when surely the “simple” means of redress has been at the disposal of the encumbents…
Why doesn’t Cassie just mow her neighbors lawns or take their dogs for a walk or do babysitting? she can earn a lot more that way.
You might find this helpful:
http://www.legislation.govt.nz/act/public/1969/0041/latest/whole.html#DLM392378
If it’s too long, check out the Minors’ Contracts Act 1969.
Pinetree- Because as usual, Labour is too busily involved with its race to the centre with National to look out for youth wages?
Ari, that’s not entirely fair – the Labour led government abolished youth rates as of April 1st 2008.
I do agree that they moved far too slowly to do this.
It’d be nice to see something now providing minimum wage protections for workers under 16.
Brett said
Great solution Brett, now someone else can do Cassie’s old job.
Brilliant.
If you think the job you are working pays too low, you leave it, I mean there are far better jobs for 13 year olds than that.
But hey I bet if she wanted to work at McDonalds for 12 bucks a hour, those on the left would stop her
I agree with Ari.
The Labour Government didn’t abolish youth rates. It created a “new entrant” rate for the first 200 hours or 3 months of employment. It’s certainly an improvement (and way better than National who basically oppose any pro-worker law), but in my opinion it didn’t go far enough.
It wasn’t really a Labour inititive either, it came from Radical Youth, Unite, NDU and the Greens. If you ask me the best thing Labour has done to employment law is the Holidays Act 2003, but they’re found wanting in other areas.
There is still no minimum wage for children 15 and under.
I’m the author of the bill that goes to second reading next week. It doesn’t deal with children under 16, because it amends the current minimum wage act, but it does deal with the thousands and thousands of vulnerable contractors over 16 who not only work in leaflet delivery, but in truck driving, courier delivery, cleaning, fastfood delivery, security, music and movies, caregiving, forestry, telemarketing and so on. Exploitation isn’t just happening for kids. It’s a model for how minimum remuneration can be calculated in the world of independent and dependent contracting. It’s a highly complex area, because rights for contractors only exist in commercial law, and they are few when it comes to their employment. Ari, there are new entrant rate for 16 and 17 olds in my bill. And I wasn’t influenced in the slightest to vote for the removal of youth minimum rates by Unite, Radical Youth or anyone else – I voted for it because I believe youth rates are wrong and always have done.
Darien Fenton
Sorry, there are no new entrant rates in my bill
Darien – thanks for that, very good to hear from you on this blog.
Are such bills in progress available to the public on the web?
Seriously, its awesome how the right preach about “incentives” and “hard work”, yet some of their biggest fans are caught paying kids peanuts – or would that be a peanut?
Captcha: “servant raignment” – indeed.
Maw:
So the Michael Cullen holds 82% of Air New Zealands shares and yet has no control over it ?
Yes, that’s how it works – despite owning more than 80% of Air NZ the public has no democratic control over its operations. Yet another reason why we should fully nationalise it.
r0b: check http://www.parliament.nz – you can get a list of bills before Parliament. You can also search all bills before Parliament, and narrow fields to look exclusively at Private Members Bills etc.
VE – thanks for that. There’s a bewildering array of information – hard to sort through!
Here’s an overview of bills. A summary of the current state of
Darien’s bill. The bill itself (pdf link).
No matter how often I see it, the slow pace of the parliamentary process continues to amaze…
Yeah, the select committee process itself often takes months. Still, I’d much rather have a slow process than a quick one. As far as public input goes we’ve got one of the most open systems in the world. For example, in working on the Real Estate Agents Bill the Justice and Electoral committee had ~1400 submissions, with around 900 of those submitters also wanting to submit in person to the committee – not a small undertaking!
It’s a very involved process and normally it does a great job in vetting bad legislation. There will always be exceptions, but such is politics.
When did they make “nice” a conjunction?
?
I think it’s about time The Standard also recognised the burgeoning literary & grammatical movement that thrives, hidden within.
[lprent: I don’t write literacy posts. Perhaps you could ask one of the posters.
Actually believe it or not, it appears that the ‘sod has written the only literature post (as a Guest). He reviewed Wisharts book.]
So Tane, if Cullen exerts no control over AIr NZ, why did he carpet the Chair and order no more flights to IRaq? Or did he actually not do that and Air NZ just spontaneously come to the same non political conclusion he did?
If you think the latter, I have a very nice train set I am willing to let you nationalise for a wee bit under $1billion.
I used to make $13 an hour pumping gas on Sundays to pay my way through university… in 1981 !! Remember penal rates? Took me two hours to earn my week’s rent. The ECA has a lot to answer for, what joy it will be for workers if the nats were to get back in charge and screw them down again. These days it still takes me two hours to pay the rent, but I make $200 an hour! Progress?
“But” Billy. (But everyone does it, but billies, which butt. Aussies use it differently but.)
nd: I’d say that what you class as rent has either gone up massively.
Sounds to me like you’re comparing a room in a hovel in auckland (or a brick and tile in hamilton) in 1981 with a habitable 2 bedroom house in auckland in 2007.
There was quite a lot of inflation since 1981. Why don’t you compare it to something more tangible. I’d suggest counting it in terms of litres of milk – evil grin.
AG: Indeed, I do live a somewhat more stylishly than my student days. I agree there has been a lot of inflation since 1981. My point is that gas pumpers are still making that same $13 an hour after those 27 years of inflation….
Urggh – you’re probably correct. Gas pumpers has to be a minimum wage area these days – which is kind of interesting bearing in mind how much technology they’re expected to run.
In 1981 there would have been at least double time to pump on sunday. Now it’d just be the usual rates.
Usual rates indeed. I pumped gas around the turn of the millennium, and it was minimum wage work. Profit margins at the retailers are tight (to the tune of 2-4 cents/litre sold) so I very much doubt that gas station attendants will ever earn more than minimum wage. Profit margins would be why we’re seeing the expansion of BP into coffee/cafe style foods I would imagine.
Of course, I was expected to actually serve people on the court, which is something of a rarity these days.
Lynn – sorry if that stood out at you, should have said something about the ‘about’ page and not The Standard itself… It seems a wonderful (to me) combination of grammar and politics permeate the comments threads.
[lprent: 🙂 Possibly. But I figure that anything addressed to “The Standard” is addressed to me personally, since I run the machine. Usually it is a prelude to an series of attacks on the site on a “less personal basis” about editorial content. There isn’t an editorial policy apart from what is in the about. So I defend on a personal basis. Besides it allows me to burn off frustration with sarcasm.]
There are ways of calculating piecework rates to compare to minimum wages.
When I was a berrypicker aged 12-17 the rates had to be set so that the number of kilos picked added up to a base rate, with an good worker working it. Most of the pickers were kids, but good adult pickers could make minimum wage plus a little.
As I recall the hourly rates set in the Award (remember those day – I barely can!) were $4.54 for 17-year-olds and $5.45 for 18 year olds. When I eventually got taken on on an hourly rate at 17, I thought it unfair that the girl a year older than me got paid more without doing any more work.
rOb – glad you were pointed to the parliamentary website. The select committee report gives you some information about how the bill will change during the committee stages because there will be amendments to make the bill clearer. The select committee was tied on supporting the bill, so amendments have to be put forward as SOPs in the committee stages. I agree that it can be frustratingly slow. It’s often not the select committee that slows things down, but the parliamentary process. Members’ bills like mine can only come up every second Wednesday when the House is sitting. Local bills come before members bills and there’s been a raft of those, so members bills drop down the order paper. When numbers are tight, like they are on my bill, further postponement may occur because the numbers are in the House to vote. For example, if the Maori Party doesn’t have three out of their four MPs in the House, they can only exercise three votes which leaves a bill relying on Labour /Progressive, Greens, Taito and Maori Party one vote short. My bill has already been postponed for that reason once, and that put the bill back nearly six months. That’s why it would be better if NZ First supported it so there is a buffer if the Maori Party’s votes are not there on the day. I just want to get this issue sorted for those workers who are not entitled to minimum wage and hopefully, there won’t have to be a postponement again.
Vanilla Eis: We have to be careful in looking at “costs” from multi-nationals. They tend to inflate the price to NZ in order to bring the revenue back to the home country for lower tax there. Their branches here in NZ are supposed to make as little profit as possible. Global IT company charged the NZ branch a 40% “royalty” on imported hardware and software – supposedly to fund R&D in the US. But what it really did was take the profit back to the US for taxing at lower rates and leave local NZ Branch with micro-profits or minor losses year on year. The real profits had been exported. But the apparent “lack” of profit here could be used to claim poverty…
[lprent: fixed]
Hmm…OK….used the wrong sort of brackets and the words disappeared. The missing words are “global IT company” and “local NZ Branch” and should appear after “as possible” and “and leave” respectively.
[lprent: What tags were you trying?. Make sure you get the slash on the closing bracket.
eg <b>global IT company</b> goes to global IT company
Like that]
Darien – thanks for that. Very interesting to have the perspective of an insider to the process.
For example, if the Maori Party doesn’t have three out of their four MPs in the House, they can only exercise three votes which leaves a bill relying on Labour /Progressive, Greens, Taito and Maori Party one vote short. My bill has already been postponed for that reason once
What about proxy votes, or the old system of pairing? Surely such conventions can be used – at least for private member’s bills (as these can come from any party) – and it speeds the process for everyone.
I just want to get this issue sorted for those workers who are not entitled to minimum wage and hopefully, there won’t have to be a postponement again.
Go for it!
Teaching their kids basic economics. Unfortunately, from what I can make out, most people don’t have a basic understanding of economics and so can’t teach their kids.
If I was a parent I would be telling the kids to put a value on their time equal to or greater than the minimum wage (or, preferably, a value on what they want to achieve and when they want to achieve it by which would then determine the value of their time). Then help them go over the figures to see if it measured up. If it doesn’t then they don’t do the job.
BTW, I want to see junk mail banned anyway.
Draco
If I was a parent I would be telling the kids to put a value on their time equal to or greater than the minimum wage (or, preferably, a value on what they want to achieve and when they want to achieve it by which would then determine the value of their time). Then help them go over the figures to see if it measured up. If it doesn’t then they don’t do the job.
If you were a parent you would be delighted that your kids were out working like most of us. Working out a fair wage is down the track after they become accustomed to getting of their arse in the first place
My son just started a round. It sounded good on paper. And lots of extra spending money.
But he did his first night, and took his brother to help him. It took them 3 hours together, and they were knackered. How long its going to take him if he does it by himself, I don’t know. I think if it interferes with his school work and takes more than 3 hours after school by himself, its not going to work. There must be something he can do to earn money that isn’t exploiting him, or causing an issue at home.
The rate quoted is $11 per 1000 pieces of mail, but I would think often its several pieces of junk going to each house. But it took all evening one evening to fold the mail, and then 3 hours to deliver. What sort of rate will that work out per child?
What do you suggest?