Mission accomplished

Written By: - Date published: 6:03 pm, May 28th, 2009 - 18 comments
Categories: budget 2009, john key, wages - Tags:

John Key famously said “we would love to see wages drop“. It sure didn’t take him long in government to see his ambition achieved.

Here are the wage hourly wages rates, adjusted for inflation, over the last decade and Treasury’s projections from today’s budget.


After peaking this year (wages lag unemployment), wages will drop then stall.

John Key didn’t create the conditions that are causing this. It’s the unemployment from the global recession.

He does have a responsibility to do something about it though. He should have had something in his budget that was going to tackle unemployment, set to get near 8% (or 10% in the downside projections) and falling wages. More than that, he has promised, and Bill English repeated the promise today, to close the wage gap with Australia. That can’t happen while our wages are falling.

He didn’t. Maybe it’s because he lacks the vision or lacks the ideas or doesn’t care or, as he once said, it’s because he “would love to see wages drop”.
-Marty G

18 comments on “Mission accomplished”

  1. tsmithfield 1

    Go back to the original article. The very next sentence he said “the way to increase wages…”. Clearly a slip of the tongue that you are trying to make a meal out of. What he obviously meant to say was that he wanted to see the gap differential between Australia and NZ drop. Go back and look at the original article before making yourself look silly.

    • bilbo 1.1

      No he clearly meant that wages must drop I heard him clearly say so in between the mouthfuls of baby he was taking.

      • tsmithfield 1.1.1

        Key clearly did make this statement. Read what I said. You seem to have a problem with reading and comprehension. As I clearly said, his following comment clarified what he meant. Did you actually go back and read the article the quote came from? Don’t make yourself look silly. Prove you can actually read and follow a link.

        • Pascal's bookie

          Christ not this again. Read what he said yourself smitty. He doesn’t want to see wages to rise unless that is driven by productivity. If there is inflation, (the context of the question he was answering) he does not want to see wages rise to compensate, as that forms part of a spiral. Fair enough. But what does that mean happens to real wages? They drop.

          That’s why he tied himself in knots trying to explain it all away, and ended up forcing the most bs ‘retraction’ I’ve ever seen out of the editor. The paper didn’t retract the quote, but rather the impression the quote may have given, without explaining what the correct impression one should take was supposed to be. In short, we are supposed to believe that we were reading it wrong, even though the words mean what they clearly say.

          Hammer away it all you like, it’s been done to death here. Fill your boots.

          • tsmithfield

            So, where do you think it will all end if wages keep rising without gains in productivity?

          • Pascal's bookie

            So just to be clear, you now accept that like Horton, Key meant what he said?

    • burt 1.2

      bilbo is right. He was scoffing down a few babies and he said it.

      Really he did – that is why the Marty G has linked to such a credible source of the quote.

      • The Baron 1.2.1

        Heh, Marty has already destroyed his credibility with his error prone postings.

        Why should this one be any different? Oh yes, all based off spinning something out of context. New Zealand didn’t care for the standard’s “analysis” of that situation then (probably because the Herald is evil, right?), so what makes you think that they will care now, Marty.

        Don’t let that get in the way of another biased, ideologically driven tirade about how you think wages jsut magically go up, so long as you tax enough.

  2. burt 2

    Marty G

    Over on this thread there is much discussion about how Treasury projections are crap. (see: http://www.thestandard.org.nz/the-debt-bogey-returns/ )

    Do you agree with the other people who have commented about the validity of Treasury projections? Do you think the Treasury projections are more accurate for wage levels over time but not for debt? Or did these numbers just fit better with your own opinions?

    • The Baron 2.1

      Uh-o, looks like Marty’s mental maths has been caught out yet again.


  3. mike 3

    Marty’s logic is shared by the EPMU members at my workplace. Vote for a % increase even though it will cost X amount of jobs.

    Turkeys that vote for Xmas… pass the gravy

    • The Baron 3.1

      Typical unionism – “more please” with no heed to the consequences for their fellow workers – only a selfish desire for more in their own back pocket.

      And then they have the cheek to blame it on the people that gave them the job in the first place, for not giving them both.

      • indiana 3.1.1

        Have the Unions considered reducing their fees to help out the people who’s wages are frozen because the economy can’t deliver productivity gains?

        • Daveo

          Not that I’m aware of. If anything the work of unions is becoming more intensive than ever because of the amount of restructuring and redundancy going on, not to mention the large number of employers trying to ram through zero wage offers.

          The fact is just like a govt needs taxes to run public services, unions need money to operate and serve their members properly. If you cut that money you cut the ability of the union to stand up for its members’ interests at the time they need it the most.

          Oh and I wouldn’t put too much stock in mike’s ravings. He sounds like a bitter middle management type who doesn’t like the idea of workers standing up for themselves and voting in a democratic fashion to decide their future.

  4. tsmithfield 4

    Pascal’s bookie

    “So just to be clear, you now accept that like Horton, Key meant what he said?”

    No. I still think it was a slip. Probably a freudian slip. But still a slip.

    I happen to agree with the sentiment, though. Wages should be governed by supply and demand like other products. If this were the case then there would be near to zero unemployment and people would be better off in real terms.

    • Pascal's bookie 4.1

      Oh yeah, it was a slip all right. But that’s not what I asked. I asked if you thought he meant it, and I guess from your freudian comment you at least accept the possibility. Which is progress from your initial spin 😉

      A gaffe: when a politician accidently tells a politically inconvenient truth.

      So he said it, he didn’t mean to say it, but it probably represents his thinking, (and you and many righties agree with him), so it’s fair game.

      Fair call?

      • tsmithfield 4.1.1

        I think its incorrect from the perspective that I don’t think Key or myself would actually like to see workers worse off, which is what seems to be the point you are trying to make.

        I, and I suspect Key, actually and sincerely believe that people generally will be better off if market forces rule wages as they do most other things. So, at heart, we probably are not dis-similar to you in our objectives. From that perspective, many on the right and left just differ in how we think we should achieve our goals, not in the goals themselves.

        If pure market forces ruled, then in the current environment, wages would drop because firms could not afford to pay as much. Because wages had dropped, firms would need to drop their prices to because workers would not have as much income due to their wages dropping. Thus, in real terms workers would probably not be any worse off. On the positive side, firms would not need to cut jobs, meaning people stayed employed earning much more than they would on the dole. Also, the firms could afford to drop their prices because their wage costs are not so high, thus, they are more likely to stay in business.

        As it stands now, because wages are relatively inflexible, firms have little option but to cut their labour costs by laying off workers. This has to be a bad thing in the long term from my perspective.

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