Key on wages

Written By: Tane - Date published: 8:09 pm, March 18th, 2009 - 93 comments
Categories: john key, national/act government, wages, workers' rights - Tags: council of trade unions, david farrar, minimum wage, nzpa, productivity

Key’s speech to the CTU today showed an interesting inight into how he thinks you lift wages. NZPA reports:

He said it was not good enough for New Zealand to be in the bottom third of the OECD for per-capita incomes, but was cautious about tackling the issue by lifting minimum wage rates.

“In reality, lifting the minimum wage will only take workers so far,” he said. “In the end, it’s productivity that drives wages.”

As I pointed out when David Farrar made the same fallacy the other day, the minimum wage isn’t there to make us all rich, it’s there to ensure that people on low incomes are able to live their lives with some basic dignity and security. It’s actually quite concerning that Key has such cartoonish view of what the Left stands for.

The other part of his argument – the bit about productivity – is only half right. Yes, in the long run you need to increase the amount of wealth produced per worker if you’re going to increase wages.

But in a capitalist system any benefit from productivity increases goes directly into the pockets of business owners. You need a mechanism to translate that into wages. And that mechanism is decent employment protections and a unionised workforce that has the strength to bargain decent wage increases.

The alternative, hoping that wealth will somehow ‘trickle down’ to ordinary people, has been a recipe for stagnating and in many cases declining wages. We saw a lot of that here in the 1990s under the anti-union Employment Contracts Act, when real wages fell even as productivity increased.

The American experience has been even more stark – since the mid 1970s productivity has increased by 70 percent but wages have remained static. Between 2001 and 2004, when productivity rose 11.7 percent, median household income grew by a mere 1.6 percent.

That’s what happens when you remove employment protections and make it harder for workers to organise through their unions – wages stagnate and the benefits of economic growth go exclusively to those at the top.

So while Key talks about lifting wages through productivity, his attacks on employment rights are kicking away the very mechanism that makes this happen. As it stands, all he’s offering New Zealand workers is the same trickle down theory that’s failed them for the last 20 years.

UPDATE: Good article from CNN here. “U.S. worker productivity still rose 18% in the 2000s… But inflation-adjusted income for the American middle-class family actually fell during the same period.”

93 comments on “Key on wages ”

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Inventory2 1

18 March 2009 at 8:26 pm

FFS Tane – Key has told the CTU he wants to work with them to lift wages – but you guys can’t get past the bullshit and myths you were perpetuating last year. You lose more credibility by the day.
- Tane 1.1
  
  18 March 2009 at 8:33 pm
  
  Um, he said that before the election too. So did Reagan, and no doubt Bush as well. The thing is, there’s a difference between saying you want to do something and actually having policies to achieve it.
  
  Do you think trickle down is a viable plan to increase wages?
  - ben 1.1.1
    
    23 March 2009 at 9:22 am
    
    Do you think trickle down is a viable plan to increase wages?
    
    Show me any NZ politican whose policy is, or even believes in, trickle down. Last time anybody in government mentioned that concept in all seriousness was about 1984.
    
    Get out of the time warp.
    - Pascal's bookie 1.1.1.1
      
      23 March 2009 at 9:30 am
      
      A lot of ACT policy is pretty much bog standard supply side stuff which, inasmuch as it is supposed to benefit the poor as much as the wealthy, = trickle down.
- Kevin Welsh 1.2
  
  18 March 2009 at 9:22 pm
  
  Yeah, right IV2, by backing his bullshit 9 day fortnight by any chance?
  
  I still have fond memories of the last time a National government promised higher wages.
  
  Care to remember Ruth Richardson’s “doubling of wages this decade” speech?
higherstandard 2

18 March 2009 at 8:30 pm

What IV2 said.
keith 3

18 March 2009 at 8:33 pm

Who actually thinks John Key gives a fuck about how the bottom half lives?
- Tane 3.1
  
  18 March 2009 at 8:36 pm
  
  But… but… he took a Maori girl to Waitangi.
  - Dean 3.1.1
    
    18 March 2009 at 9:01 pm
    
    I do believe that’s more than Helen did. In fact she had a bit of a hard time with Waitangi in general didn’t she? I seem to remember a spot of bother over haters and wreckers, who were possibly in the last cab off the rank. She may or may not have had a cry at one point too.
    
    Tane, I’m not sure you’ve gotten over the left losing the last election properly. I know you’re not a vehement Labour supporter but really, it is quite concerning when you have such a cartoonish view of what the government stands for.
    
    IrishBill: you dick.
    - Tane 3.1.1.1
      
      18 March 2009 at 9:10 pm
      
      Dean, my comment was a joke. I was making light of Key’s PR stunts designed to make him appear more centrist than he is. If it looks cartoonish, that’s because it is.
      
      I’m not too worried about what Helen did or didn’t do at Waitangi. It’s her results I judge her on, for better or worse. I’ve gotta say though, one thing I did find endearing about her was that by the end her PR was so dire that what you saw with Clark was pretty much what you got.
    - Dean 3.1.1.2
      
      18 March 2009 at 9:25 pm
      
      “IrishBill: you dick.”
      
      Up to your usual standard, I see.
  - Inventory2 3.1.2
    
    18 March 2009 at 9:05 pm
    
    WTF has that got to do with anything? You should ban yourself for posting off-topic!
    - IrishBill 3.1.2.1
      
      18 March 2009 at 9:11 pm
      
      So IV2, care to explain how wages will automatically rise with productivity? Or are you just here to troll in your increasingly shrill way?
    - Tane 3.1.2.2
      
      18 March 2009 at 9:11 pm
      
      Bro, it was an ironic comment on Key’s PR on how much he cares for “how the bottom half lives”, as Keith put it.
      
      Feel free to answer my question though.
      - Dean 3.1.2.2.1
        
        18 March 2009 at 9:28 pm
        
        Thats a fair point Tane. I’d be more worried about the new Labour party president and how he thinks he can retain any kind of objectivity with his other job taken into consideration though.
      - Inventory2 3.1.2.2.2
        
        18 March 2009 at 9:44 pm
        
        I’d love to answer your question Tane, but I have neither the expertise, nor the resources of a trade union or political party. I’m just a small business owner who’s trying hard not get dragged down by all the recession talk. Our business is actually going well, we’ve increased our staff by 15% this year, and given our staff a pay increase.
        
        PS – captcha = old unpaid – describes me to a T
        
        [Tane: All I do is read widely, comrade. It’s all online. But I’ll take that as an admission you’ve been running around the ‘sphere bagging me over something you admit to having no clue about. I’m glad your business is doing well though, right now there are far too many out there that aren’t.]
      - Felix 3.1.2.2.3
        
        18 March 2009 at 10:33 pm
        
        “…and given our staff a pay increase.”
        
        To 12.50 an hour. Good for you.
Pascal's bookie 4

18 March 2009 at 8:38 pm

Great post Tane.

This:

The American experience has been even more stark – since the mid 1970s productivity has increased by 70 percent but wages have remained static. Between 2001 and 2004, when productivity rose 11.7 percent, median household income grew by a mere 1.6 percent.

is something I’ve not seen the usual suspects even try to explain. Why is it that 40 odd years ago, a family could buy a house and raise kids on a single full time average wage? Where has all the productivity growth gone? Why?

It’s funny that these questions are seen as ‘class warfare’, but the facts the questions are talking to, are not.

In related news, I note in passing the knots folks are tying themselves in about the AIG bonus moolapalooza. It seems that it would be difficult you see, because there are contracts and such, and it would be ever so wrong for the government, the government I say, to break those contracts. Even though the government is also the owner of the funking company, and that the banksters who broke the company would be out of a job if not for that fact. The thing is though, I also remember that when the auto industry was up for a much smaller bail out, the auto workers contracts were fair game for the government to screw up and throw in the corner. Strange stuff.
- Tane 4.1
  
  18 March 2009 at 9:04 pm
  
  Yep, this article‘s worth a look. In brief:
  
  “U.S. worker productivity still rose 18% in the 2000s But inflation-adjusted income for the American middle-class family actually fell during the same period.’
  
  “It’s a compelling example of a large disconnect,” said Bernstein. “Americans aren’t being rewarded for their productivity.”
  
  90% of the growth in U.S. workers’ income from 1989 to 2007 went to the top 10% highest earners, EPI said. Income for the top 1% grew 204% since 1989, and the top 0.1% saw their income grow 425% in that span.
  
  Trickle down in action.
- Phil 4.2
  
  19 March 2009 at 3:33 am
  
  since the mid 1970s productivity has increased by 70 percent but wages have remained static.
  
  Real wages have remained static, meaning that in nominal terms they’re actually up roughly 300-400% (depending on which average inflation rate you use, and where ‘mid 1970’s starts). Once you start getting into that kind of percentage growth, comparisons to a productivity measure – which I’m guessing are nominal – are totally spurious.
  
  Between 2001 and 2004, when productivity rose 11.7 percent, median household income grew by a mere 1.6 percent.
  
  This is the left-wing equivalent of “global temperatures are falling, compared to 1998” and deserves exactly the same derision as a useless statistic.
  
  Why is it that 40 odd years ago, a family could buy a house and raise kids on a single full time average wage?
  Families had to work their arses off, and save like my generation cannot believe, to meet an excessively high deposit, and other criteria before getting a loan. I believe the average age of first home ownership would be very high – much higher than has been the case up until recently. A progressive decline in credit standards, as well as NZ’s bizzare aggregate ignorance of the stock market, will naturally lead to house prices rising, o average, faster than incomes.
  - Pascal's bookie 4.2.1
    
    19 March 2009 at 8:02 am
    
    So are you saying that in real terms we aren’t much more productive than 40 years ago? Sounds wrong.
  - George Darroch 4.2.2
    
    19 March 2009 at 11:26 am
    
    You’re right that there was more of a culture of saving. I’m disappointed by many people’s attitudes to money. But that doesn’t change the other reality…
    
    A few decades ago, the average house price was three to four times an average worker’s wage. It remained that way for most of the 20th Century.
    
    An average house now costs around ten times the average wage. Difference much?
Tom Mathews 5

18 March 2009 at 9:14 pm

“You need a mechanism to translate that into wages”

What about competition in the labour market? It’s all very well to mock Key for having a cartoonish view of the Left, but this statement does seem to reflect a slightly cartoonish view of how prices are set in a market.
If unions were the only way to make wages reflect productivity, non-unionised workers would be working for free.

Here’s a paper which trivially concludes that productivity broadly leads to higher wages.
http://ideas.repec.org/p/ssb/dispap/208.html

Sorry, I can’t seem to find a free online version.
- Tane 5.1
  
  18 March 2009 at 9:24 pm
  
  Hoping that competition in the labour market will provide an equitable distribution of productivity gains is trickle down. And the empirical record from the last 30 years is that it doesn’t work.
  
  There are things other than strong unions that can help – keeping unemployment low is important, as are things like the minimum wage at the margins of the labour market, although a lot of the political pressure for policies like these come from the union movement.
  
  I’ve got no doubt that some, usually highly skilled, individuals will have sufficient bargaining power to have their productivity gains reflected in their pay, but for most workers this isn’t the case. That’s why they work collectively to improve their bargaining power.
  
  The rest of your arguments are strawmen or suggest you’ve misread my post.
  - Tom Mathews 5.1.1
    
    18 March 2009 at 9:42 pm
    
    Well I think we’re in more agreement than you think, although most economists would probably agree that moderate levels of inflation are at least as important as the other factors you recognise. What I was saying is not that unions can’t wage workers’ wages, but there are many other factors that also do so.
    
    Business profits affect demand for labour in a similar way that income affects demand for goods. More money, more demand. More demand, higher wage. It might not be nearly as strong a correlation as you might like, but it seems to me you are saying it doesn’t happen at all, which I think is wrong.
    
    If this is based on a misreading of your post then I withdraw and apologise.
    - Tane 5.1.1.1
      
      18 March 2009 at 9:45 pm
      
      I’m not suggesting there are no other factors involved, a blog post by necessity has to simplify. I just don’t think those factors – that is, other than employment protections and unionisation – are sufficient to provide an equitable distribution of the gains of productivity.
Steve Withers 6

18 March 2009 at 10:04 pm

Glad you mentioned the productivity scam.

It’s got a lot in common with the scam of the 60s that claimed more automation would improve quality of life and give everyone more free time. Instead, it just saw people kicked out of jobs in traditional industries and left to either rot or sort themselves out via re-training if they weren’t too old and had some money to aid in supporting themselves.

If productivity rises, the benefits do go straight to the company bottom line. Workers don’t get any of it unless there is a labour shortage and they are in demand. On the contrary, they may well find themselves outsourced as the Boss looks for the NEXT productivity hit…..because there is never enough of anything.
Inventory2 7

18 March 2009 at 10:50 pm

Tane said “[Tane: All I do is read widely, comrade. It’s all online. But I’ll take that as an admission you’ve been running around the ‘sphere bagging me over something you admit to having no clue about. I’m glad your business is doing well though, right now there are far too many out there that aren’t.]

Not quite Tane – I’m bagging you because you pushed a line last year that is demonstrably untrue – that John Key wanted to cut wages. His words to the CTU today make a lie of that:

“I absolutely share your vision for a more-productive, higher-wage, higher-skilled economy, producing goods and services valued throughout the world.

And I look forward to working with you to make that vision a reality.”

And Dean said “” and given our staff a pay increase.’

To 12.50 an hour. Good for you.”

Most of our staff earn well in excess of $20/hr – the only ones working on the minimum wage (if you pro-rata’d our hours) would be my wife and I!
- r0b 7.1
  
  18 March 2009 at 11:02 pm
  
  His words to the CTU today make a lie of that:
  
  Words are words, actions are actions. Let me know when Key’s actions are shown to be delivering on his fine words. I won’t be holding my breath.
- Con 7.2
  
  18 March 2009 at 11:21 pm
  
  Gasp! John Key is a Friend of the Worker; it must be true because none other than John Key himself says so! I’m convinced!
- lprent 7.3
  
  19 March 2009 at 8:27 am
  
  I2: Don’e be stupid. John Key and National will state something in public and do something quite different in practice.
  
  For instance read your OIA’s JK was adamant that there would be no sinking lid. Turns out that he was lying. His government is seeking a 10% sinking lid in expenditure across the whole of public sector. Tell me – how is that going to help increase the average wage?
  
  For the record. I’m expecting that JK will keep doing his jonkey about wages. At present there isn’t the data to say what the average wage levels actually are. But to date there has been nothing put in place or proposed that would help with JK’s “vision”. I think that it is all bullshit, because that is all that this dipshit says in speeches. It is what people do that is important.
  
  BTW: I believe that you were active in the debates around the time that JK was saying that there was no sinking lid. You going to apologise for your statements at the time? That would be consistent with your preposition on apologies. However I suspect that you have one standard for everyone else, and seperate one for yourself – just like this fuckwit that you admire.
gingercrush 8

18 March 2009 at 11:18 pm

Of course we need to raise productivity. But we also need to raise the minimum wage which at just $12.50 simply isn’t good enough. But we can’t raise that minimum wage to such an extent where it hurts businesses and employers. The fact is some jobs do not justify large increases in their wages. I know that sounds mean but its the truth. But right now earnings are rather low and some rise in that minimum wage is necessary. I was comfortable with the 50 cent increase because we are in tough economic conditions and the truth is regardless of the next government. The likelihood is that under Labour we would have seen a 66 cent increase. So the differences between National and Labour weren’t that great.

The Greens and the Maori Party support an eventual increase to 15 dollars. I actually think that is sound if done so over a period of time. Indeed I think we could actually go higher. $16.00 or more importantly $17.00 is achievable over the next three years. Rather than annual increases, six monthly increases would work better. But we also need other earners incomes to increase with the minimum wage. Otherwise we will end up in a situation where incomes on a whole deflate. The minimum wage will be higher but more people will be stuck on either the minimum wage or just above it. That in itself would set a dangerous precedent.

Dramatic changes in the minimum wage will cause pain to many businesses. And if pushed too far a too high minimum wage will see greater number of people unemployed. That is why businesses themselves must be supported by lower compliance costs but more importantly lower taxes. If we could design the business tax percentage to lower when we increase minimum wages. That would I think improve things and make larger increases in the minimum wage work. Indeed, while National has pushed for better tax cuts on personal incomes. Their tax policy for businesses isn’t much better than other parties and indeed is no different from Labour. A business tax cut down to 25% or even 20% overtime will in effect enable increases in the minimum wage to work. It would also allow those incomes higher than the current minimum wage to increase as well. Indeed, one could also further cut personal taxes. Which would therefore open up more money for everyone. And while initially would see cuts to government revenue. Overtime, revenue would improve.

Such changes I think will also help with inflation. As if we just raised the minimum wage and not cut business tax. Businesses would either have to lose staff or they will increase prices which will ultimately lead to inflation. Such moves would see some inflation increases but if people and businesses have more money, it would allow such people to save. Thus lessening impacts on inflation.

—-

Overall, I think Key’s speech was excellent.
- Steve Withers 8.1
  
  19 March 2009 at 12:39 am
  
  gingercrush: I’m wondering who will be working in restaurants and cafes soon. The few I know of don’t stay for long. Just a few months to get a small amount of cash together….and they go back to uni or overseas.
  
  The cafe near me can’t keep staff on for more than a few weeks….and they say they can’t afford to pay more. Judging by the state of their staffing, they can’t afford NOT to. So they struggle on and one or other of them will become ill and that will be the end of the business.
  
  This is the wonderful new New Zealand? No wonder so many are leaving.
Redbaiter 9

18 March 2009 at 11:46 pm

“the minimum wage isn’t there to make us all rich, it’s there to ensure that people on low incomes are able to live their lives with some basic dignity and security.”

Well maybe, but it seems to me that the more government regulates and taxes and grows, the more my dignity and security are diminished.

” But in a capitalist system any benefit from productivity increases goes directly into the pockets of business owners.”

At first. Then those business owners spend it, in ways much more helpful to community prosperity than government does.

“The American experience has been even more stark – since the mid 1970s productivity has increased by 70 percent but wages have remained static”.

Yet America still has an overall standard of living higher than your Scandinavian socialist models.
- Steve Withers 9.1
  
  19 March 2009 at 1:03 am
  
  Red: “Then those business owners spend it, in ways much more helpful to community prosperity than government does”
  
  Elaborate.
  
  “Yet America still has an overall standard of living higher than your Scandinavian socialist models.”
  
  “standard of living” isn’t a term much used these days. In terms of quality of life,
  
  In 2005, The Economist rated all the Scandinavian countries well above the US.
  http://www.economist.com/media/pdf/QUALITY_OF_LIFE.PDF
  
  In terms of cities, the first US city on thie scale comes in at 27 (Honolulu) after the Scandinavians, the Canadians, Wellington and Auckland, most of Australia.
  
  http://www.mercer.com/referencecontent.htm?idContent=1307990
  
  The US wins on GDP…..but GDP says nothing meaningful about anyone’s “standard of living”. It just says you make a lot of stuff. Not that you enjoy it, are rewarded for it or are particularly happy about it.
gingercrush 10

18 March 2009 at 11:56 pm

Yet America still has an overall standard of living higher than your Scandinavian socialist models.

Yes the majority of Americans live very well. Greater than most. But those on the bottom face extraordinary discomfort and difficult times without the socialist safety nets other countries provide.
- Steve Withers 10.1
  
  19 March 2009 at 1:06 am
  
  gingercrush: Don’t say yes. Every measure I can find says the opposite.
  
  I know from personal experience the US is full of contradiction. I remember in Mt. Vernon, Illinois a huge proportion of people drove Cadillacs. Well off, eh!!! Yet they paid next to nothing in rates and the roads were full of pot holes you could lose a large dog in. Real 3rd-world stuff….though I have to confess with potholes in that number and size, there would be no boy racers there.
r0b 11

19 March 2009 at 12:27 am

Well maybe, but it seems to me that the more government regulates and taxes and grows, the more my dignity and security are diminished.

Those that resent contributing to the common good will always feel that way redbaiter.

Yet America still has an overall standard of living higher than your Scandinavian socialist models.

Sources for this claim please? Compare with this summary (Scientific American, 2006):

On average, the Nordic countries outperform the Anglo-Saxon ones on most measures of economic performance. Poverty rates are much lower there, and national income per working-age population is on average higher. Unemployment rates are roughly the same in both groups, just slightly higher in the Nordic countries. The budget situation is stronger in the Nordic group, with larger surpluses as a share of GDP.
…
The results for the households at the bottom of the income distribution are astoundingly good, especially in contrast to the mean-spirited neglect that now passes for American social policy. The U.S. spends less than almost all rich countries on social services for the poor and disabled, and it gets what it pays for: the highest poverty rate among the rich countries and an exploding prison population. Actually, by shunning public spending on health, the U.S. gets much less than it pays for, because its dependence on private health care has led to a ramshackle system that yields mediocre results at very high costs.
…
In strong and vibrant democracies, a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness.
Redbaiter 12

19 March 2009 at 12:47 am

“Sources for this claim please?”

All over the net loser. How about you agree to give $20 to a charity I nominate for every one I can find. Deal?
- r0b 12.1
  
  19 March 2009 at 1:29 am
  
  Hmmm, my reply seems to be in moderation, not sure why (someone please delete the duplicate). [lprent: done]
  
  Now that this comment is here, let’s see if I can edit in my reply:
  
  ===
  
  You can find various things “all over the net” redbaiter. I’d be interested in examples from sources as credible as Scientific American (as quoted above).
  
  Those claiming that America has a higher standard of living can make a case, by being selective with their stats. But they will all be ignoring the elephant in the room – an elephant which is making itself increasingly hard to ignore. America’s famed economy / standard of living is a mirage, a bubble, an illusion created by borrowed money and insane financial practices. The whole house of cards is tumbling down. Whatever is left of America when this is all over will be owned by China. None of the “evidence” that you can find to support your claim will take account of this rather important fact.
  - r0b 12.1.1
    
    19 March 2009 at 8:17 am
    
    Many thanks Lynn.
- r0b 12.2
  
  19 March 2009 at 1:34 am
  
  My reply is in moderation for some reason (someone please delete the duplicates) – so until tomorrow, goodnight…
Redbaiter 13

19 March 2009 at 1:13 am

Yeah that is right Withers. The US has such a low standard of living, people from other countries, including your Nordic paradises, would do anything to get there and get a US passport.

..and then you can take Cuba, one of your especially successful socialist nirvana’s, lauded by leftists all over the world and endlessly touted by Hollywood celebrities. It is such a desirable pace to live that Haitian refugees paddled their rubber tubes right past it in order to land in Florida.

Fuck you Progressives are fucking morons. A total waste of time energy space and oxygen. So obsessively doctrinal you’d deny the negative realities of Socialism even if your grandmother’s life depended upon it.
- ethical martini 13.1
  
  19 March 2009 at 8:03 pm
  
  and you redbaiter are so obsessively doctrinal you can’t even think beyond abuse.You [expletive deleted] moron
RedLogix 14

19 March 2009 at 1:44 am

The US has such a low standard of living, people from other countries, including your Nordic paradises, would do anything to get there and get a US passport.

Maybe, maybe not. About four years ago I was offered a good full-time role with a decent US based OEM manufacturer, I had been contracting to for some months, that paid about U$105k in the first year. I took a long hard look at it, the stress and long hours, the travel, the long weeks away from home, the MUCH higher living costs, the high taxes… the dislocation from family… and in the end concluded that I would only be a little better off than staying here in NZ.

What is usually overlooked in these discussions is that while the USA enjoys a very high average GDP/capita, it’s median household income is far less impressive.

This link demonstrates that NZ actually has a surprisingly high median household income when corrected for purchasing power parity.

This link has some pretty dramatic graphs that clearly show how US median household incomes have NOT kept pace with rising productivity over the last 4 decades.

Coincidentally I was working with a Finnish engineer installing a massive log-debarking machine on the same site and talked with him about it…. he vowed in the usual rather blunt Finnish style that only a madman would work for the fracken Yanks.

And that was that.

In the meantime Steve Withers made a polite case to suggest that the USA is not at all the workers paradise you seem to think it is, and offered reasonable references to back his argument. Any chance you’re in the mood to reciprocate?
Redbaiter 15

19 March 2009 at 2:25 am

“Any chance you’re in the mood to reciprocate?”

Can’t you read you tiresome plodding halfwit? I’ve already made the offer. The remarkable thing to my mind is your apparent disbelief that such information exists. All this demonstrates to me is that as usual, you leftists are locked into such a narrow spectrum of information you wouldn’t know your arse from your elbow.

As for your “polite” Mr. Withers, he is in my humble opinion, one of the most stinking disreputable lowlife frauds on the internet. He should consider himself lucky he is recognised at all, and if he’s expecting to be treated as a normal human being with morals and integrity he’s sadly deluded.

As for your Nordic paradises, the only people lining up to get in there are third world no hopers (the kind that Helen liked to bring to NZ because they vote for her) desiring to take advantage of the no work full pay welfare policies they pursue. As miserable as they may be, the Nordic cities are still a great improvement over grass huts, bare earth, failed crops, excreta fouled water, dysentery and a subsistence life style.

As for the “average” living standard in the Nordic countries, even when it gets close to the US, its artificially inflated by the anomaly of oil rich Norway. As you know. (But why would we ever expect the left to argue their case with integrity, openness and clarity when their whole social construct is based on propaganda and falsehood?)
- r0b 15.1
  
  19 March 2009 at 3:01 am
  
  I’ve already made the offer.
  
  My reply to “your offer” is caught in the spam trap for some reason. But one of the main points it made was this. All of the (recent historical) evidence relating to America’s status ignores the increasingly obvious fact that America’s famed economy / standard of living was all a mirage, an illusion created by borrowed money and insane financial practices. It wasn’t real, it wasn’t sustainable, and it is being swept away.
  - Redbaiter 15.1.1
    
    19 March 2009 at 9:54 am
    
    See. Even if I had provided such references it wouldn’t have mattered. You would just discredit them by means of rumour and innuendo.
    
    As for the Scientific American article, its subjective language shows it is clearly politically partisan. (example- “the mean-spirited neglect that now passes for American social policy”)
    
    This magazine has long ago slipped from any degree of repute, and is today recognised as just one more media outlet whose output is indelibly contaminated by the fact that it has been commandeered by those who are not so much journalists as political advocates for the left.
    
    The mystifying thing to me is your apparent ignorance of the fact that the mainstream media and the Scientific American in particular are regarded as unreliable by so many people because of their politically partisan stance. I mean, you do come into the real world now and again don’t you???
- Killinginthenameof 15.2
  
  19 March 2009 at 8:11 am
  
  All I see in this post is blah blah blah, distinct lack of evidence and I don’t care what you say to make up for it, either put up or shut up mr baiter.
Redbaiter 16

19 March 2009 at 2:56 am

Look- here’s what I consider idiotic about your requests for references. How can it be seen as rational behaviour, when all I need to do to provide such references is go to Google, type in “US higher living standards than Nordic countries” and then transfer those references that come up positive to this thread??

I just don’t see the necessity for it, especially when from my perspective, the claims I make are by no means lacking in credibility, and in the circles I move in, pretty much accepted as fact. The norm. The status quo. Nothing exceptional

There are two factors at play here. One is the apparent one dimensional approach to political information that typifies what leftists write here, and the second is some kind of dependency or indolence that appears to allow you to make demands upon others when you’re quite capable of performing the requested tasks yourself.

Furthermore, I work damn hard all day, and then when I choose to amuse myself by contributing to the blogosphere, I’m harried by slow witted dipshits like Redlogix, who apparently lacks the reading skills to see that I’ve already made the conditional offer to produce links, and still, after supposedly reading the thread, makes a fresh demand. I just cannot after a hard days work, suffer such idiocy politely. Sorry.
- r0b 16.1
  
  19 March 2009 at 3:04 am
  
  Redbaiter, comrade, you’re sounding a little overwrought. Go get some sleep. I have replies to your comments above that are caught in the spam traps, so they will keep until tomorrow. Go sleep.
- Stever 16.2
  
  19 March 2009 at 6:56 am
  
  Wow! This really is the whingeing of someone whose world view, formed from “the circles I move in” (and getting nowhere fast!), bangs up against reality.
- Killinginthenameof 16.3
  
  19 March 2009 at 8:13 am
  
  Your a professional parasite, your jobs been replaced by the internet. If you cannot back up what you are claiming, then don’t say it in the first place.
- Con 16.4
  
  19 March 2009 at 10:22 am
  
  Poor RedBaiter … it’s tough being a right-wing troll on a left-wing blog. Especially after a hard day’s work eh?
  
  Here’s my advice: SUCK IT UP!
  
  Seriously, if your idea of “contributing” to the blog is to “offer” to Google for some “links” to buttress your pre-conceived position then it’s no wonder you get nowhere.
  
  Look: I can Google for “the earth is flat” and find some “links”. Does that prove the earth is flat?
  
  You have singularly failed to show that US residents enjoy a standard of living as high as Nordic residents, because you have not engaged with the FACTS. Talk of “Googling for links” is bullshit.
  
  You can’t assume that because the USA is financially well off that Americans live well.
  
  Firstly, their currency is artificially strong – you need to consider their purchasing power.
  
  More generally, standard of living is not a purely financial issue. The FACTS are that more of the USA’s GDP is wasted on rubbish that doesn’t contribute to the standard of living of Americans. The spend much more on health because their health sector is poorly organised, but they get less for it. They spend far more on their military, and on cops, and they lock up way more people in prisons (more than 1% of the US population is in prison, and 3% are either in prison, on parole, or probation). Does that improve their standard of living? If all you’re doing is counting $ spent then sure, it’s all good!
  - Redbaiter 16.4.1
    
    19 March 2009 at 10:43 am
    
    You’re crazy. I know that because your post is a standout example of unbelievable hypocrisy yet you’re apparently completely unaware of that fact. All assertion. Not one iota of substantiation. While your criticism of Redbaiter is for doing just that. Sorry, I don’t have the time to deal with deranged loons.
    - Matthew Pilott 16.4.1.1
      
      19 March 2009 at 10:57 am
      
      All assertion. Not one iota of substantiation.
      
      If you don’t believe Con, you need to google the assertions and paste the links here yourself. Apparently that’s all you need to do to ‘prove’ something, that’s what you’re insisting everyone else does. Maybe you could pay Con $20 for each link…
      
      BTW I secretly admire your approach here. People say something, and provide good links to back their points of view up.
      
      You make opposing claims, and then insist people do their own research to back up your claims. Quite rightly, they haven’t accepted your proposal, nor are they willing to pay you to back your claims up – as is the norm, if you choose not to back up what you say, your claims are merely the worthless ramblings of an anonymous blog commentor.
      
      Only you could work an approach like this and expect to be taken seriously. Quite the sense of entitlement you have brewing there, Redbaiter.
      - Redbaiter 16.4.1.1.1
        
        19 March 2009 at 11:13 am
        
        Y’know, I try to be patient with you loons, but really, that you would assert something so ridiculous that the only links on the internet of any repute are those that support a left wing political perspective is taking your idiocy to a completely new level.
        
        I just don’t think there is any point in presenting links because no matter what I provide, you will assert it of no worth.
        
        That is why in my posts, I use empirical methods, such as the Haitians swimming past Cuba, and people lining up to enter the States as opposed to only losers wanting to go to Norway.
        
        These are points you of course ignore, preferring naturally to dredge up partisan rubbish from publications like Scientific American.
        
        Then you declare yourselves to have provided “proof”, and therefore to have “won” the debate.
        
        Pffft..
        
        Fucken hopeless.
        
        Like trying to wrestle with a column of smoke.
        
        [lprent: I’d hardly describe Scientific American as being partisan. I’d generally describe them as being stuffy in scientific terms. I think that you may have limited your reading list somewhat too far.]
      - Matthew Pilott 16.4.1.1.2
        
        19 March 2009 at 11:29 am
        
        Yes, Redbaiter, only an idiot would wrestle with a column of smoke. Interesting observation you have made there; very self-observant, almost zen. Someone rational would, I don’t know, chuck a bucket of water or take a piss on the fire. Keep up your wrestling.
        
        Your examples are crap. Are you going to use the US-Mexican border as an example of US’ superiority in the lifestyle stakes? Is ‘third-world no-hopers’ some kind of statement of fact I’m meant to believe, some reasible measure of the calibre of immigrants to Scandinavia vs. those aiming for North America, as opposed to the deranged ramblings (to use a certain someone’s quote) of Redbaiter?
        
        Pffft. Don’t know why you try either.
      - Con 16.4.1.1.3
        
        19 March 2009 at 12:12 pm
        
        I know I shouldn’t feed the trolls, but …
        
        I just don’t think there is any point in presenting links because no matter what I provide, you will assert it of no worth.
        
        Amazing! Madame Baiter predicts the future!
        
        Listen up Baiter, why the fuck don’t you stop “offering” to provide evidence to back up your received wisdom, and ACTUALLY DO IT? I am calling your bluff! Let’s see these “links” of yours!
        
        But no, I predict you won’t provide these links, because you are too tuckered out from a long day at work to participate in a debate, with FACTS and such like. It’s much easier to be a troll isn’t it?
        
        That is why in my posts, I use empirical methods, such as the Haitians swimming past Cuba, and people lining up to enter the States as opposed to only losers wanting to go to Norway.
        
        Seriously? Is that the best you can do? Let me see if I can “Google” for news about Haitians swimming to Norway … gosh there don’t seem to have been any! I take it all back; your anecdote has totally clinched it for me! Some Haitians rafted to Florida, bypassing Cuba (and the Dominican Republic and Jamaica I guess), so that provides that Scandinavians have a lower standard of living than Americans!
        
        Seriously, though, it’s a wonder you haven’t been banned here for your trolling … it’s not like you actually do contribute anything useful to the discussion. You’re only here to be disruptive aren’t you?
    - Con 16.4.1.2
      
      19 March 2009 at 11:59 am
      
      Sorry, I don’t have the time to deal with deranged loons.
      
      So you keep telling us.
    - ethical martini 16.4.1.3
      
      19 March 2009 at 8:05 pm
      
      But redbaiter, that’s all you do, all day all over the NZBlogosphere
phil sage (sagenz) 17

19 March 2009 at 8:12 am

Tane – you make the assumption that all the extra productivity has gone to Corporate bottom line. But if you look at Profit share of GDP it has remained reasonably static. The answer to that conundrum is that prices have come down so consumers can get more for their money.

I have always been suspicious about your real wages comparison to australia. It is just not consistent with other data I have seen direct from source. You will have to include the impact of exchange rates and show that you are comparing PPP. I am not saying you are wrong but it is not consistent with PPP GDP per capita graph comparisons over the same period.

Can you please provide the source data with links to stats/treasury so I can recreate.

John Key’s reported comments are perfectly accurate and reasonable whatever side of the political fence, you are simply creating your own straw man. Which is not terribly productive
- Tane 17.1
  
  19 March 2009 at 9:51 am
  
  You mean the figures in the transtasman wage gap post? They’re Treasury. Happy to send those to you if you like, I’ve sent them to Farrar on a previous occasion too. Flick us an email – http://www.thestandard.org.nz/contact-us/
keith 18

19 March 2009 at 8:17 am

phil says: Families had to work their arses off, and save like my generation cannot believe, to meet an excessively high deposit, and other criteria before getting a loan.

i says: fuck off phil, families have to work their arses off now, except now many have little chance of buying their own home. Currently the median house price in NZ is $330,000 and the median annual salary is ~38,000 (2008 stats) which means the median priced house costs over EIGHT times the median salary.
I compare this to my work mate who after his fitter/turner apprenticeship in the 80’s was earning over $10,000/yr and bought a house worth just over $30,000. Clearly housing was far more affordable then than now.
Sure they had to save for large deposits (which in my opinion is a good thing) but right now banks aren’t accepting deposits under 20% which at the median house price is $66,000!
Basically, phil, youre completely full of it.
Daveski 19

19 March 2009 at 9:39 am

Some interesting comments about unions in the original post that appear to have gone unchallenged.

I would argue that a unionised workforce is a sign of a low skill, low wage economy. The reach of unions is highly reduced in professional areas which tend to be higher paid.

I’d also see some conflict between unions duties to their members (protect jobs, increase wages) and the political aspirations of most union leaders who have much broader political objectives.

Your view of businesses snaring profits is simplistic also. This may be true where there is no pressure to employ skilled labour but in the majority of employment situations, the market works in favour of the workers by ensuring any employer who fails to reward staff will soon be short skilled.

It is sad that many hear see a return to cloth-cap unionism as progress when we should be focussing on upskilling and innovation.
- Tane 19.1
  
  19 March 2009 at 9:45 am
  
  I would argue that a unionised workforce is a sign of a low skill, low wage economy. The reach of unions is highly reduced in professional areas which tend to be higher paid.
  
  Some of the most highly unionised sectors in the economy are the doctors and the airline pilots. Some of the least unionised are among the minimum wage retail sector.
  
  Similarly, your comments about “cloth-cap unionism” against upskilling and innovation suggest that like most righties, you have little clue how modern unions actually work.
  
  I mean, what do you think was going on yesterday at that CTU productivity conference, if not a focus on upskilling and innovation?
Daveski 20

19 March 2009 at 10:31 am

Tane

I tried to pick my words carefully – I did say a return to “cloth cap unionisim”. I’m well aware of the changes to unionism in NZ particularly the EPMU which I think is more about collaboration and co-operation than conflict. My comment reflected the comments here, not the role of the unions.

I’m not sure whether your comments about a unionised workforce suggest compulsory unionisation which IMO would be a major step backwards. I’m not suggesting for a moment that unions don’t have a role to play but as you yourself note, there is a “third way” (for both unions and employers) that does not mean a return to how things were done in the past.
- Tane 20.1
  
  19 March 2009 at 10:50 am
  
  Daveski, comments like that show why it’s dangerous to put too much stock in the comments of armchair socialists like Trotter.
  
  And no, I’m not proposing compulsory unionism. I don’t know of anyone who does. I’m talking about labour laws that allow workers to organise without employer obstruction, including on an industry basis.
Redbaiter 21

19 March 2009 at 12:05 pm

“Is â€˜third-world no-hopers’ some kind of statement of fact I’m meant to believe, some reasonable measure of the calibre of immigrants to Scandinavia vs. those aiming for North America,”

Take just for one example- international circuit tennis players.

So many of them come from the socialist hell holes you want to make of NZ, and as soon as they become succesful, they take up residence in the States. Not your socialist Nirvanas. Why is that??
- Quoth the Raven 21.1
  
  19 March 2009 at 12:11 pm
  
  Where in the US do they take up residence. Michigan, no. Alabama, no. Harlem, no. Compton, no. There are rich areas and there are poors areas Red and there are a lot of poor areas in the US.
  - Matthew Pilott 21.1.1
    
    19 March 2009 at 12:51 pm
    
    What’s also pretty funny is that Swedish tennis players generally stay there instead of moving to the US. Norwegian rally drivers also base themselves in…Norway!
    
    Which goes to show that you can make assertions all you want, Redbaiter, but they are easily refuted by other assertions. That’s why your average punter would link to a respected article, or some form of corroborating source. You don’t think you need to, that’s fine. Just don’t expect anyone to take your wee anecdotes seriously.
    - Redbaiter 21.1.1.1
      
      19 March 2009 at 12:55 pm
      
      If you cannot see that you just committed the same transgression you accused me of, you really are nuts.
      
      Not that it even addresses the point. ie- Why do the successful tennis players from other countries choose the US over your favourite Nordic cesspits?
      
      Like I said.
      
      As productive as wrestling with a column of smoke.
      - Matthew Pilott 21.1.1.1.1
        
        19 March 2009 at 1:00 pm
        
        I’m not denying it you bithering idiot, I said the exact opposite.
        
        You tell an anecdote and think it is some form of empirical fact. I do much the same, and we’ll go round in circles. If you recall, my original point was that telling anecdotes is pointless.
- Relic 21.2
  
  19 March 2009 at 1:22 pm
  
  Master Baiter, you are obviously not from these here parts, please, please, return to your putrescent natrual lair.
- ethical martini 21.3
  
  19 March 2009 at 8:07 pm
  
  oh yeah, socialist hellholes like Czechoslovakia. I know you dribblejaws think that history stopped about 20 years ago, but not even Dr Fukayama believes that any more.
  Your rhetoric is almost as bad as your abuse, at least the abuse is up-to-date.
lampie 22

19 March 2009 at 12:50 pm

You can improve productivity by education, maintaining and enhancing skills in changing technology and knowledge.

So with increase in productivity, it is wise to “invest” in enhancing the inputs to generate more output.

You can increase productivity through reducing output as long as inputs are reducing at a greater rate though you don’t really want to go down that track
lampie 23

19 March 2009 at 1:06 pm

If you think an increase in minimum wage will decrease productivity this is not necessary true. You need to look at the multi-factor productivity rather than just labour productivity.
Redbaiter 24

19 March 2009 at 2:47 pm

“Master Baiter, you are obviously not from these here parts, please, please, return to your putrescent natrual lair.”

Yes, I can imagine the pain you totalitarians must feel at discovering there is still some vestige of political diversity abroad in this country.

lprent: I’d hardly describe Scientific American as being partisan. I’d generally describe them as being stuffy in scientific terms. I think that you may have limited your reading list somewhat too far.]

No I haven’t. In 30 seconds, I was able to find examples of people expressing concern with the left liberal bias of the Scientific American.

It is a continuing source of puzzlement to me that you guys don’t seem to know that this kind of criticism is out there.

Links below, so the usual incessant whiners can shut the fuck up for once.

http://www.amazon.com/Scientific-American/product-reviews/B00008DP07

http://www.epinions.com/review/mags-Scientific_American/content_132793339524

http://www.bloggernews.net/113982
- Quoth the Raven 24.1
  
  19 March 2009 at 6:37 pm
  
  Redbaiter – You call yourself Redbaiter then you have the gall to talk about political diversity. Your handle which you chose clearly to be intentionally offensive is one that is based on absolute intolerance of political dissent. What a fucking loser.
Redbaiter 25

19 March 2009 at 6:56 pm

“What a fucking loser.”

Actually, the thing that I found attractive about Redbaiter as a handle was the signature that I originally used with it-

“In the leftist’s lexicon, the lowest of the low.”

No room or time for that these days.
ethical martini 26

19 March 2009 at 8:10 pm

Tane, thanks most amusing if not very instructive.
your post is actually on the money. The labour theory of value and a slight whiff of Marxism.
Keep it up, you almost restored my faith in the Labour left.
Pity about redbaiter though. s/he does tend to lower the tone of the neighbourhood. Good for padding out a thread and not much else, not even funny.
- Tane 26.1
  
  19 March 2009 at 9:01 pm
  
  Cheers mate, but I’m labour with a small ‘l’. I’ve never voted for the party.
Simon-5 27

19 March 2009 at 8:24 pm

Tane wrote:..

A law-abiding Maori bloke was on his way to work one day..

Thanks folks, I’ll be here all week.

[lprent: still banned – another ip added to automoderation]
- ak 27.1
  
  19 March 2009 at 8:48 pm
  
  (see, ethical? we get the occasional moronic pusball even lower than ratbiter…..actually, give it time, after a while ole bait sorta grows on ya, like a raving old uncle, or a benign wart… a crazy, repetitive counterpoint in ever-decreasing loops, relentlessly highlighting the melodic sanity of the Standardistas)
  - Tane 27.1.1
    
    19 March 2009 at 9:00 pm
    
    Yeah, that’s pretty stunning stuff from Simon-5. He’s banned, but I’ll leave it up to show why that’s the case.
RedLogix 28

19 March 2009 at 9:21 pm

I was thinking that The Standard should consider dropping the agency that allocates trolls a polite note of thanks for the ‘baiter. There are certainly far less capable trolls around on the net, while baiter seems to not only have passed his troll quals with flying colours (albeit with a blood-rage misty hue), but has applied himself to his assigned troll role with remarkable diligence and an engaging homely style all his own work.

I sure hope that Troll Central remembers to give ‘baiter the lump of mouldy cheese they are contractually obliged to pay him this year. It would be a real shame if this messy AIG business meant that bonuses went totally out of fashion, just when baiter is so richly deserving of his.
- Felix 28.1
  
  19 March 2009 at 10:38 pm
  
  Well he is consistent I suppose. (Not internally of course).
  - RedLogix 28.1.1
    
    19 March 2009 at 10:55 pm
    
    Of course if they don’t pay out baiter’s bonus, we could have a quick whip around for the poor blighter. It would be all wrong if he didn’t get to feel some good old fashioned leftie solidarity in his hour of need.
    - Felix 28.1.1.1
      
      19 March 2009 at 11:11 pm
      
      I’m in. I need to clean some of the science out of the back of the fridge anyway.
Rosa 29

19 March 2009 at 10:14 pm

Tane: “It’s actually quite concerning that Key has such cartoonish view of what the Left stands for.”

I don`t think its cartoonish so much as ideological. For all his campaign rhetoric about growing up in a council house, he is the first accountant (by training) to be Prime Minister of New Zealand since Muldoon, and if I am not mistaken, with the same narrow view of his opponents and experience of life.

He may be repackaged, but it`s old wine in new bottles.
- ak 29.1
  
  19 March 2009 at 10:21 pm
  
  mmmm, Rosa, or vinegar in a Fanta can…. sour taste just starting to reach the buds…
rave 30

20 March 2009 at 12:28 am

Whiff of Marxism? I’m sniffing but I’m not getting anything.
ben 31

23 March 2009 at 9:15 am

But in a capitalist system any benefit from productivity increases goes directly into the pockets of business owners. You need a mechanism to translate that into wages. And that mechanism is decent employment protections and a unionised workforce that has the strength to bargain decent wage increases.

Nope. 100% wrong Tane. When you look at the data across countries, you find close to a 1 to 1 match between productivity and wages, and no or almost no relationship between wages and employment laws or unionisation. The reason capital owners must share gains in productivity is competition for labour.

New Zealand alone proves the point – employment protection laws do not force employers to share producitivity gains, and most of the workforce is not unionised, but somehow this non-unionised workforce pulls a decent wage. Indeed, since the decline of unionisation in the 1980s real wages have increased substantially. Unions, in other words, do not have much effect on wage levels.