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No traffic jam on the high road

Written By: - Date published: 3:50 pm, June 22nd, 2013 - 34 comments
Categories: Unions, workers' rights - Tags:

I am reading a very interesting book on the role of Collective Bargaining in the Global Economy (Edited by Susan Hayter).

It confirms for me the importance of getting political support to change the labour laws in New Zealand to support industry level/sector wide bargaining, and that labour codes which primarily only provide for enterprise negotiations (like our current law) are ineffective in the long term for both workers and employers. They encourage short-termist behaviour by both workers and employers, leaving the resulting market and human failures for society to pick up (externalities).

As the book points out, without regulation of the labour market, the high road business development that many right wing economists and Governments refer to in their “pie on the sky” narrative, is not a viable business model for any group, and in economies with low levels of collective bargaining – the traffic on the high road is very light (I stole this rather nice expression from the book)!

There is an interesting chapter on working hours. New Zealand has no regulation of working hours. There is no regulation for maximum hours, for overtime, for predictability or for security of hours. The only regulation of total hours per year is the four weeks statutory leave for holidays and even then, a week can now be sold. For casual workers even this does not apply. The only “fetter” on working hours, unless collective agreements regulate them, are some regulations around things like driving time for driving jobs and the law on health and safety, but with no real power, understanding or consideration by the regulator (MBIE) about the impact of unregulated hours, this provides little protection. Hours of work were a core element of industrial awards. When they were scrapped nothing was put in their place.

The external costs and impacts of long and irregular hours are huge and the community meets the costs of them. They include not only high accident and injury rates but also poor health generally and probably have a casual link to a range of poor mental and physical health outcomes (I think there is a link with obesity – exercising takes time and energy as does shopping, cooking and sitting down to eat – I would be interested to know if the link has been studied). They also include family stress, kids with insufficient care and attention and a range of other social ills that impact on the whole community including the absence of communal or even guaranteed leisure time.

The other impact of no regulation of hours is that employers rely on it for increased profit rather than improved labour productivity. Long hours also reduce pressure on wages as low wages are compensated by more and more work. This impacts on the economy as a whole with reduced employment, less demand etc etc. As my interesting book points out – without regulation, individual firm initiatives to cut down hours incur penalties – loss of market share (retail for example), and higher labour costs. Basically without regulation everyone has to take the low road to stay competitive

So as the book makes clear the regulation of hours needs to be done outside of the market as the market provides incentives to do just the opposite even if it is in the best interests of everyone collectively. The “external” impacts have a lag time and the nature of them means they cannot be internalised. Regulating hours of work can be done at four different levels – by statute – some countries have law for a 40 hour week, legislated days of work, overtime etc etc. It can be done by collective bargaining – but this needs to be done at an industry/sector level to be effective and ensure no unfair advantage from long hours is obtained by firms outside the bargaining. It can be done at enterprise level by collective bargaining but the disadvantages of competition arise, or, and as it is with most NZ workers – it can be done unilaterally by employers at the individual level – effectively no regulation at all. Obviously a combination of some or all of these is possible if they are co-ordinated. Without strong industry bargaining – legislation is the only way it can be done and has to do the whole job often resulting in the lowest common denominator becoming the benchmark.

The Forestry industry is a classic case and point. Forestry workers all have individual employment agreements which appear to have few restrictions on hours and some require work any hours any days etc. The pay rate does not vary regardless of the total hours worked (no weekend, night, or overtime rates). Any contractor tendering for work wanting to reduce hours must incur the costs of that (more travel time per tree, more workers, more training etc etc). Forest owners operate a model on the lowest common denominator so they are unlikely to favour a contractor with higher costs. Wages are relatively low ($18 -$22 per hour with no pay for driving time or bad weather), so workers are incentivised to work long hours too and may not take work with employers individually wishing to reduce working time. And the outcome – well you have heard it before.

Forestry either needs legislative regulated hours, or an industry collective agreement that extends across the whole industry which includes the parameters for safe and fair working hours. Such and agreement would be negotiated, with employers and employees discussing what the standards should be across the board. This would require compromises from both sides but the process of bargaining allows issues such as safety and training to be incorporated along with the economic demands of the industry. Better still it should take place in an overall regulatory framework that sets minimum standards for all workers, including creating incentives to limit maximum working hours through things like overtime penalties. This may all sound radical – but actually it is the norm in many successful economies.

The labour share of income in Forestry has decreased from 74% in the 1980’s to 30% in 2004 and is falling. Is the country better off? Has the wealth trickled down because of this amazing change? New Zealand has the fastest growing rate of inequality in the OECD, and you can chuck into that – one of the most dangerous lowest paid forestry sectors. You and me are meeting the social and health costs that this model – dangerous by design – has created. In my view it is a model where profit projections (consciously or not) are dependent on this accident rate. We need legislation to support industry level bargaining to get this change.

The Government is making dramatic further cuts to deregulate the labour market – these are vigourously supported and lobbied for by NZ business organisations and their members. We on the other hand a lobbying for labour law changes that genuinely provide for collective bargaining and freedom of association for workers that want it. There will be screams and hysteria from business about this. They will say we can’t keep swinging the industrial relations pendulum one way then the other. But the pendulum is not swinging, it is stuck near the top on the deregulation side and they are now ratcheting it up to above the mechanism hoping it will break up there. For forestry workers – the Employment Relations Act is irrelevant – it can’t deliver to them fair working conditions, and forestry is not the only industry like this. For forestry workers the industrial relations system is a disaster creating dangerous and poorly paid work.

Business can provide no evidence that the changes they are promoting are in the countries interests. It is a grab of workers rights for short term business gain alone. It won’t benefit the small forest contractors, but it will benefit the forest owners in the short term, enabling other parts of the supply chain to become low wage enterprises (ports, wood processing etc). A better regulated and protected labour market is the only thing that will save business from itself but it will also save the rest of us too and let us all drive on the high road.

34 comments on “No traffic jam on the high road ”

  1. ghostrider888 1

    Yep.The stress placed on human systems is sky-rocketing under these extremes of neo-lib, growth, productivity agendas
    Somethings Must Break Now , just like Sister Ray said.
    Excellent reading and / an writing Helen.

  2. sid 2

    But isn’t the real question for unions, whether they are just fidgeting to “improve” the system for the workers and are contempt with just that, or are they questioning the very system on which all the injustice and inequality is based? One union/workers may well be able to achieve a good contract in one country, but will it not be based on the demise of other unions/workers in another nation?
    Do unions today have an anti-capitalist agenda, yes or no? Do unions want to become an integral part of the system and therefore the growth industry, yes or no? Or do unions once again want to be the leading edge force of the working class that created them?
    It is about time unions show colour once again, and stop playing with the scrapings of the capitalist system’s table. Otherwise the zeitgeist and the working class will leave the unions behind.

    • Bill 2.1

      Yes, that should be the question. And the answer lies in the response to the other questions you posed – which are…
      No – that doesn’t follow.
      No.
      Yes.
      No.

    • karol 2.2

      sid: One union/workers may well be able to achieve a good contract in one country, but will it not be based on the demise of other unions/workers in another nation?

      In some industries, it’s an international labour force, as for instance with VFX workers.

      Scott Squires survey shows how exploited they are. VFX workers are unique in the movie industry in not being unionised, as they work for VFX companies, they are contracted by the movie companies. Subsidies in one country, result in work being taken from workers in another country. And they work long hours, doing insecure work, with little health insurance or vacations.

  3. Bill 3

    If there is somewhere in the region of 3.5 million people of working age in NZ, and if all of those people have jobs, then no matter the working conditions those people are employed under, the cold hard scientific fact is that they will contribute directly to conditions that throw questions of our future viablity as a civilisation (best case)/ species (worst case) up in the air.

    Isn’t it time for the union movement to take the future into account and help empower and enable people to get out of the capitalist job market instead of seeking levels of comfort within it?

    • Colonial Viper 3.1

      Yep.

      But what would a union be left doing if it was no longer a negotiator, facilitator of collective bargaining and intermediary between the worker providing labour, and the capitalist employer?

      The lack of political economic vision beyond that point is one place it sticks, IMO.

      • Bill 3.1.1

        Educating, encouraging and empowering people in jobs to form democratic worker collectives that produced and distributed goods in lines with the democratic wishes and needs of society rather than in reaction to so-called market demands. And that would mean a lot of free time for people to pursue useful and diverse interests on both a collective and individual level.

        Said it before. Will say it again. In negotiations, unions should be looking to form the position medium term, whereby they can make demands deliberately intended to bankrupt the company in order for it to be reconfigured along democratic lines. Unlike others, I don’t see that as a precursor to danging bosses from lamp-posts. They too could opt to enjoy a life enriched by the presence of democracy.

        • Daveo 3.1.1.1

          I think Bill’s ambitions are noble but I can’t see that getting shop floor support, nor is it realistic for unions in their current state to be able to transform social views on that scale by themselves. The recipe you’re promoting would lead to the unions sinking into irrelevance. I can assure you union officials are not sitting around trying to hold the workers back so they can maintain their jobs. More often than not they’re trying to drive consciousness among workers against the overwhelming weight of capitalist realism.

          • Bill 3.1.1.1.1

            What can I say Daveo, except point out that in one unionised workplace I was involved with, we came within a hairsbreath of collectivising it. The support was there from an apolitical workforce when they’d had the possibilities explained. The manager was on side too. So were two of the three bosses.

            And while I agree that some union officials are really good at what they do, I’m also fully aware that many are ‘time servers’. And instances of workers aspirations/demands being stymied by those ‘higher up’ who ‘know better’…well, we’ve all seen that happen, aye? And it’s not as if it’s always a ‘better call’ ….a tactical play based on ‘superior knowledge’.

            Finally, strange that you claim union officials are ‘more often than not’ driving conciousness among workers when that’s precisely what I advocated unions should do in my comment…a comment you judged as one containing ‘noble’ but ‘unrealistic’ expectations/aspirations.

            Anyway…

          • Bill 3.1.1.1.2

            And then there’s the likes of this that unions could help facillitate…”A Cumbrian town shows how co-operatively owned businesses can keep remote areas alive and thriving” http://www.independent.co.uk/news/uk/home-news/special-report-how-community-spirit-pays-a-dividend-8669751.html

  4. Tamati 4

    As with all regulation, it’s not about having more regulation or less regulation, it’s about having the right regulation.

    Does anyone know how IR regulations differ between Germany and France?

    My (very limited) understanding is that both have a reasonably highly regulated labour markets. The difference being that in Germany theirs is a much more collaborative approach between business and labour, whislt in France they are far more confrontational.

    The point being we’d be better to go down the German approach, rather than the French one. Especially taking into account the two countries recent economic performance.

  5. Yes 5

    Why under labour for 9 years they did nothing! Union participation dropped dramatically. Helen with everything in your favor it never happen to put in those measures you discuss. Why? Why why?

    • Draco T Bastard 5.1

      Why ask Helen?

      But the answer is that Labour has drunk the Kool-Aid and believes as much in capitalism and the free-market as National and Act.

    • Daveo 5.2

      As Helen pointed out, Labour’s employment reforms did bugger all. Nothing in the ERA put in place the sort of mechanisms Helen is promoting.

      • Yes 5.2.1

        Helen not promising anything…it’s a book review at best. Where’s the policy

        • One Anonymous Knucklehead 5.2.1.1

          I read the article as more of an invitation to discussion, rather than dictating a policy position. Perhaps if you look at it that way you might be capable of positive contribution.

    • asd 5.3

      Helen Clarke was threatened with what some journalists described as “capital strike” when she was presenting the Employment Relations Act 2000 to business leaders at various conferences and meetings. It was allegedly ‘watered down’ on account of the aggression, bullying and the threats made to her incoming government by business leaders and their cohorts.I hope Darien Fenton’s Industry Standard Agreements Bill does not suffer the same fate.

  6. Will@Welly 6

    Since the Employment Contracts Act came in, most ‘unionised’ labour have seen their real wages decline massively. At the same time, most workers have upped their own game, by doing more with less. What has been consistently missing through most of this though, is the employers investment in plant and technology to improve their businesses. Many have simply ‘shut up shop’ and out-sourced to foreign suppliers without thinking long-term – those suppliers will eventually set up shop here and undermine the New Zealand business. While the ECA has gone, this Government is bringing it back, and more, by stealth.
    What is certain, the average wage and salary earner have subsidized many employers by working for pitiful wages.
    With regards to the forestry industry, it was never envisaged that New Zealand would be a supplier of bulk logs to the world – our forests were planted on the understanding that the trees would be processed here, and the goods then sent overseas. My how the foolish have flourished, and the people of New Zealand have been deceived.

  7. xtasy 7

    “There is an interesting chapter on working hours. New Zealand has no regulation of working hours. There is no regulation for maximum hours, for overtime, for predictability or for security of hours. The only regulation of total hours per year is the four weeks statutory leave for holidays and even then, a week can now be sold. For casual workers even this does not apply.”

    I watched Jami Lee Ross defend his new private members bill on The Nation yesterday morning.

    Unbelievable that man and his attempted spin. Repeatedly he went on about workers needing to be given a “free choice” to work, while there is a strike on. It was repeatedly his argument of “choice”, of “freedom” and “fairness”.

    His appearance betrays he must be enjoying corporate sponsorship of some kind, wearing the finest attire, clean cut hair, expensive watch and probably shoes that cost a thousand dollars a pair.

    Yes, indeed, New Zealand is a business operator’s paradise, compared to most of Europe, as I know from experience. If a business operator and owner cannot make it with the liberal labour laws that exist it here, and the comparatively low wages, with the ability to push workers to work more hours than in most places within the OECD, with almost non existent unions, with people so desperate for work, some stand at street intersections washing windscreens for a few coins in the hand, then business people in New Zealand must be the most incompetent and useless there are.

    But of course some can never get enough power and privilege, cannot get it easy enough to get their business run, they will push it to the extreme. The only other places they would be happy may be somewhere in South East Asia or the likes.

    Yes, indeed, some business people from here, and some will likely be the no-hopers that cannot make it here, have gone there to get people work in sweat shops.

    But I am not talking about all, as I admit there are also fair business people, giving their workers a reasonable deal. For them – like most ordinary folks – a Jami Lee Ross would be as redundant as an accident insurance salesperson in New Zealand, where ACC is supposed to look after that.

  8. RedLogix 8

    All I can say is that if I took my income in 1983 and applied the official CPI to that number since then, I would have hoped that I’d be earning at least the same for a role (same professional skill set only with 30yrs more experience) which I regard as far more onerous and responsible.

    But I’m not. There’s at least a NZ$50,000 pa shortfall.

    Oddly enough I got an unsolicited call from an Aussie based head-hunter two weeks ago, making an offer which closes that gap and more. Hell he was even apologetic that being a smallish company they couldn’t really offer more.

    Now I’ve resisted the call of higher wages over the Tasman for many years now. Family, business and the fact that the tramping over there is crap, have kept me firmly based here. But the cold hard truth is that no matter how loyal I am, no matter how hard I work, no matter how much I achieve for my employer … the pay here will remain the same. And I’ll still be routinely working 50 hr plus weeks.

    I’m NOT whinging. Hell I’m vividly aware how I’m actually one of the lucky ones here. Really. And the move is not without costs or drawbacks. But I’m thinking the scales have finally tipped.

    Thirty years of the neo-liberal experiment and the results are in. The executive and financial classes who’ve consistently championed the experiment, insisted that there was no alternative, have done very well thank you, while the rest of us have gone backwards. The experiment has been a massive success for them, and a massive failure for us.

    I’m not imagining for one instant that it’s any kind of nirvana over the ditch. But frankly I think the New Zealand I grew up in has been killed off. It’s gone and never coming back.

    • Yes 8.1

      1984 labour Government is a good starting point

    • xtasy 8.2

      RedLogix –

      While I suspect you work in a rather specialist area in a probably higher skilled professional capacity, your observation and realisation is one that many have had and still have, New Zealand born or migrants who settled here.

      There is only so much you can pump out of an economy, that is still depending on well over 60 per cent of primary production exports, to further, smaller percentages on catering for tourists, on teaching and training overseas students, and only still marginally on other production and service delivery. Too many other economies do the same, like even lower wage Chile and others.

      Local activity is restricted to producing essential services to feed, house, motorise, educate, support and equip locals with basic, essential goods and services. Training has been neglected for years, if not decades, many jobs are just low paid, low to medium skilled jobs, and while average or medium incomes have grown over decades, yes, living costs have grown even more.

      I came here in the 1980s, was as a new migrant also used and exploited by the odd employer, paying me pittance, with endless promises I would get a pay-rise eventually, I would have “opportunities” and getter promoted and more. No matter how hard I worked, no matter how much extra efforts I put in, it never happened. Pay increases were minimal, inflation swiftly ate them away, rental costs took away a huge chunk of income, it was for most the time just pure, basic survival.

      And looking around, nothing much has changed. Well, there are a few more products on supermarket shelves, of course we have more modern consumer products available (like everywhere), and some things improved here and there, but living costs are so much higher here than in most “developed” countries, there is a housing crisis in Auckland and Christchurch, rents are also extremely high in those places (where jobs may be found), and it is the same ones creaming it, those owning businesses, owning real estate, collecting high rent, pushing their workers to the edge, paying in comparison amongst the lowest taxes in the OECD, and they do ok, but so many others not.

      I totally understand your sentiment, and looking back myself, I often regret having put hope and expectations into coming “home” to this country, just to barely survive week to week, with no prospect to get anywhere while only so much time may be left in my life to ever have another chance.

      Go for it Red Logix, while you have the chance. Loyalties for what, while there is so much betrayal and division here, this place may never change in its core system, at least not for another generation? But such a change, in economic, fiscal and social direction, is needed, to really make a difference. It requires people to do it, but they are all too locked into dependencies AND self interest, and too scared and gutless to do it here.

      • RedLogix 8.2.1

        It requires people to do it, but they are all too locked into dependencies AND self interest, and too scared and gutless to do it here.

        The sorry truth indeed. Thanks for your thoughts.

    • Colonial Viper 8.3

      RL, head over and work there for 2 or 3 years, come back with a bit of spare capital, there are political projects to be done over here when you return.

      • xtasy 8.3.1

        And after that “donate” a little bit for the “good cause” and “progressive policies”, perhaps, by supporting the “progressive forces” that could bring about a change here. Is that not what the rightist supporters do?

        Is of course all up to RL to decide, but it may just be a thought to help overcome any “guilt” feelings by leaving NZ for AUS (for a while).

      • rosy 8.3.2

        +1

    • ghostrider888 8.4

      Yes. it has gone too far now. Head wind from now on.

  9. Rosetinted 9

    The working hours and conditions we have do not allow some people to have time to live and be a person. It has become so bad with so little respect for an individual’s humanity that NZs in many cases are being treated like serfs. Minimum standards must be in place in lieu of less union strength. It is unreasonable for government leaders to try to diminish unions and not replace their efforts with basic standards of treatment that show respect for their needs. Government has allowed bad treatment to the major population of low to middle income people to become brutalising in an ongoing way. It must be stopped.

    Having four weeks holiday isn’t everything though presumably one parent families could take their holidays to match their children’s school one, so that would be a practical advantage for them.

    The aristocrat desire to grind down the poor and villify them has reasserted itself – (Aren’t the peasants revolting! Can’t afford bread or potatoes? Let them eat grass.) Despite our forebears coming all this way from whatever country with the idea of making a new and better country where everyone would have a place and a chance for a happy and meaningful life we’ve got This.
    And a screwable democracy.

    There was an interview on Fiji’s turn away from democracy this morning Radionz. Quite revealing. We shouldn’t be too smug if we can’t imagine it here – there are parallells to see.

  10. locus 10

    New Zealand has no regulation of working hours. There is no regulation for maximum hours, for overtime, for predictability or for security of hours. The only regulation of total hours per year is the four weeks statutory leave for holidays and even then, a week can now be sold. For casual workers even this does not apply

    I work in Austria. The productivity ranking is 16/144 compared to NZ’s ranking of 23/144. Labour productivity in Austria ranked 7th in OECD compared to NZ’s 23rd place. http://www.jpc-net.jp/eng/research/2012_02.html

    Labour regulations are strongly enforced in Austria. The main rules to protect employees are as follows:
    – 40 hour working week
    – 8 hours work per 24 hour period (additional hours must be paid overtime 50% uplift or receive 1.5x time off in lieu)
    – After 6 hours working time there must be a rest period of at least half an hour
    – 5 weeks annual leave
    – shift work must not be more than a 12 hour period in any 24 hours. Employees can only be asked to do overtime if this does not conflict with important personal interests (e.g. child care, urgent doctor’s appointment).
    – workers must have a minimum of 11 hours uninterruped rest between end of one work day and the next

    And THIS:
    All employees are entitled to an uninterrupted resting period of 36 hours, starting on Saturday 1 p.m. and including Sunday (weekend rest). With the only exception that an employee working during the weekend rest is entitled to an uninterrupted weekly rest of 36 hours beyond the weekend.

    Most workplaces, through collective agreements also have the following in place
    – working week of 38 hours
    – Only 6 hours at work required on a Friday if total hours add up to 38
    – You can take Friday off if you have already worked 38 hours Monday to Thursday
    – 10 hour working day maximum
    – maximum of 50 hours work per 5 day working week

    Employers are prosecuted for contravening collective agreements!

    Workplaces in Austria have compulsory elected Worker Councils (not unions, although 90% of people voluntarily belong to unions) that negotiate with the employers (who have to provide offices and normal pay to the Workers Council representatives while they are doing this work) to ensure a productive and protective working environment: health, safety, workplace physical conditions, pay negotiations, subsidised lunches, refunds on commuting costs etc.

    Part-time workers in Austria are protected by law in the same way. Part-time employees must not be disadvantaged in comparison to full-time employees. Pay for extra work above the agreed part-time hours must be uplifted by 25%, unless the extra hours are balanced within an agreed time-frame of three months.

    Austria’s productivity is still higher than NZ’s.

    Ensuring good worker conditions is not what’s holding NZ back.

    • xtasy 10.1

      Yep – conditions, at least similar to that, could be the rule here, had some firm action by NZ unions been taken in 1991/92.

      Such conditions would even “motivate” workers to put in an effort.

      But hey, that is too “academic” a regime, so we get what we get, from a business friendly government, that wants to make it yet easier, for those applying the rules of pressure, intimidation, fear, neglect, withdrawal of pay and harassment.

      Once unity is broken, it all goes to shit!

      Economic and social experiment NZ-Aotearoa 1984 to 2013, or definitely 1991 to 2013.

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