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On the minimum wage referendum

Written By: - Date published: 11:50 am, February 10th, 2009 - 46 comments
Categories: national/act government, workers' rights - Tags: , ,

The Unite Union has reacted to the Government’s miserly adjustment to the minimum wage by initiating a referendum on tying the minimum wage to two-thirds of the average wage.

The principle behind the referendum is a good one. Indexing the minimum wage to 66% would be a huge step towards making sure our lowest paid workers are able to earn a living wage and would also reduce the need for the state to subsidise low wages through government transfers. It also has the backing of the Council of Trade Unions and is the level recommended by both the International Labour Organisation and the 1973 Royal Commission into Social Security.

But as sound as the principle might be, the decision by Unite to go off on its own and call a referendum strikes me as poorly thought out grandstanding that risks doing the cause more harm than good.

Because the reality is gathering the hundreds of thousands of signatures needed to hold a referendum isn’t an easy task, as the pro-smacking lobby will attest. To have any chance of success a referendum like this would need the full backing of the CTU and its 360,000 affiliated members, and even then it would be a major organising effort stretching over a period of years.

Coming from a small and severely underresourced union which has (at generous estimates) no more than a couple of thousand fee-paying members this is little more than irresponsible flag-waving that risks tarnishing the entire movement by its failure. And, as well-intentioned as Unite might be, that’s the last thing the wider movement needs right now.

I’m all for referenda – let’s just make sure we do them properly.

46 comments on “On the minimum wage referendum ”

  1. Pat 1

    Am I missing something in all these minimum wage discussions? Surely Labour had the chance to implement either a 2/3rd of average wage policy, or a $15 by 3 years policy, and chose not to. It is not enough to say they would have implemented in coalition talks, because it is pure supposition, and history shows that all bets are off in coalition negotiations with the likes of Winston.

    If Labour had the gonads to implement such a minimum wage policy when they had the chance, then even if they still lost the election, they would have left National in the position of having to carry it through, or scrapping it and facing the consequences at the next election.

    Instead, National are just carrying on Labours record of increasing it with inflation. And despite the lame efforts of Goff, Key still ends up looking like the good guy.

  2. toad 2

    Tane, I suspect (or at least hope) that Unite would not have launched this campaign if they hadn’t already discussed it within the NZCTU and been assured of organising support for it from other unions.

    I’m no great fan of referenda, because it is too easy to distort the outcome through biased wording of the question and big proxy advertising by vested interests (witness the section 59 one (where the wording can be taken to mean anything you want to to mean) and the MMP one (where big business nearly bought themselves the retention of FPP) respectively.

    So nice to see one where the wording is clear and unbiased, but I can already anticipate the untold thousands of dollars rolling in from big business for the “No” campaign if Unite do get the signatures.

  3. Tane 3

    Toad – I can assure you Unite didn’t consult the CTU before rushing off their press release. That’s what’s stupid about the whole thing, they’re grandstanding for a short-term PR hit with no thought as to how they’ll follow through and what effect this might have on the credibility of the wider union movement.

    Pat – Labour and their allies increased the minimum wage well above inflation. See the graph here. It went up more than 70% over their time in government, rising from $7 to $12 and on track to reach $15 by 2011. As with 2005, their policy in 2008 was to lock in $15 in coalition agreements with the Greens, the Maori Party and/or NZ First. By doing that they hoped to be able to make tactical ‘concessions’ on policies they agreed with anyway.

    I agree they should have followed the Greens and the CTU and pushed for indexing to two-thirds, but they didn’t. Labour’s greatest weakness was how timid they were in the face of business opposition. Hopefully they’ve learnt the lesson of their election defeat.

  4. Tane: I dunno – it’s only a problem surely if the CTU doesn’t get on board and support it? And if they don’t, then I think the union movement has worse problems than Unite’s enthusiasm.

  5. Mike 5

    Yea, save the failure and irresponsible flag-waving for the CTU’s participation in the upcoming “jobs summit”/talk fest.

  6. Pat. Labour was on the path to 2/3rds. When they came to power, the mw was just $8.50 in today’s dollars down from $8.70 when National came to power in 1990.

    Under National, the mw had fallen both in after-inflation terms and relative to the average wage. There was a lot of catching up to do.

    And you can’t do it all at once. If Labour had instantly increased the mw to 2/3rds of the average wage, it would have cost jobs.

    Labour increased the mw well above inflation. In fact, they increased it 40% above inflation over 9 years to help close the gap with the average wage, which makes this “National are just carrying on Labours record of increasing it with inflation” a conscious lie or simply naivity.

    Could Labour have gone faster and further? yeah, I reckon. But there’s no doubting they were on the right track and they made a real difference to minimum wage workers as a result.

  7. Tane 7

    I/S – the issue here is priorities. The union movement has limited resources so it has to choose which campaigns to resource and which to leave for another day. You can’t just rock up as a union with a few thousand members and dictate the CTU’s policy by media release.

    I agree the CTU has its issues – it’s too slow, it’s too decentralised and it’s too bureaucratic, and some of the more conservative unions constrain its actions. But it’s all we’ve got, and if you want to harness the power of the wider union movement then you need to go through the proper democratic processes.

    Mike – that’s a false dichotomy. I’m all for flag-waving and activism, but if we’re going to do it then let’s do it properly rather than setting ourselves up for failure in order to score a cheap PR stunt.

  8. Wouldn’t indexing the minimum wage to the average wage cause the average wage to increase every year?

    Which would in turn cause the minimum wage to rise?

    In fact, does the ‘average’ wage mean anything when the minimum wage is indexed to it? Should we perhaps use the median?

  9. toad 9

    Tane said: Toad – I can assure you Unite didn’t consult the CTU before rushing off their press release

    Okay, if that’s true then I agree with you that it was just plain silly and likely to alienate some of the larger unions, some of whom have very few low-wage workers among their membership, from the campaign.

  10. toad 10

    Chris S said: Wouldn’t indexing the minimum wage to the average wage cause the average wage to increase every year?

    That depends on what happens with wage movements at the upper end of the scale Chris. The Green Party proposal is not simple indexing, but setting 66% of the average wage as a floor for the minimum wage once it gets to that level. It does not preclude the minimum wage from increasing to a greater percentage if Government considers economic circumstances permit at some time in the futher.

  11. As Pat said, Labour had the chance to raise the minimum wage to $15 and didn’t. Its political opportunism that they’re calling for it now. If I didnt know any better I would say that this is a symbol of unions breaking traditional ties with Labour who’ve just become ‘National Lite’ (anyone else see it like that?).

    Good on the union for having the balls to take on this task. It doesnt matter that the task is hard at least they’re trying, they’re doing more for wages than their elected representatives in the beehive are doing. How about a bit of support for them.

  12. The effect of a minimum wage increase on the average wage is trival. Consider:

    100,000 fulltime minimum wage workers get a 50 cent an hour increase. Increase in total annual wage bill = $100 million.

    total annual wage bill = $68 billion

    % increase from 50 cent an hour mw increase on total annual wage bill = 0.1%

    compare that to the trend annual wage increase of around 3.5%.

  13. Tane: You can’t just rock up as a union with a few thousand members and dictate the CTU’s policy by media release.

    I think Unite just did. Unless of course the CTU wants to publicly take a position against increasing and indexing the minimum wage…?

  14. Tane 14

    lro – no issue with any union having balls to lift wages, but balls alone don’t get results and I have little time for mouth-militants. All I’m saying is let’s do these things, but let’s do them properly.

    In reference to one of your other comments, I don’t think Unite’s actions are symbolic of a political shift among unions. Unite has never been affiliated or at all close to the Labour Party, and from memory during the election they were supporting the Greens and the Maori Party. At an organisational level they also have quite a few links to the hard left – the Workers’ Party, RAM etc.

  15. I/S. It’s not quite as simple as that. By not securing buy-in from the CTU and major unions first and creating a movement-wide campaign, Unite is risking them not putting any effort into getting signatures. It’s not as if getting that number of signautres is a small operation, even for the large unions working together. It would mean using limited resources, taking them from other priorities. And if the CTU and major unions feel they have to put their weight behind the effort to avoid it failing they’re still going to be pissed at Unite for trying to direct the wider union movement by fait accompli, which plays hell with the others’ strategies and budgets. There’s politics here too: major union leaders don’t like being dragged around by a minor player.

    That said, I don’t think the union movement can allow the petition to fail because this is an issue that matters and which the CTU has already expressed support for, but they’ll have to have one of those union sit downs to some ruffled feathers and get a common strategy in place and it may not happen.

  16. Tane 16

    I think Unite just did. Unless of course the CTU wants to publicly take a position against increasing and indexing the minimum wage ?

    Perhaps I should have been more precise – I meant you can’t just rock up and dictate the CTU’s campaign priorities and budget by press release. The CTU already supports indexing the minimum wage at 66% as official policy, the question is whether they (by which I mean their 39 affiliates, the CTU itself has little organisational capacity) throw resources into a campaign on this issue.

    I read your post over at NRT and I can understand the sentiment, but are you seriously suggesting the CTU should just abandon all its other plans, carefully planned and developed through the proper democratic processes with its 39 affiliates, just to indulge Unite’s latest stunt? Are you proposing the CTU should do this every time a union decides to go off with some bright idea of its own, or just for Unite?

    Of course, it’s possible the assorted general secretaries will look at the Unite proposal and decide it’s worth getting in behind at the expense of other priorities, and it may well be a good thing if they do, but it’s important to understand that they’re under absolutely no obligation, and indeed are incredibly unlikely, to do so. The question then is how Unite expects to get the 360,000 or so signatures – without broad union support I don’t think they can.

  17. lprent 18

    I/S et al – I think Tane has covered my point….

    The big problem with referendums as far as I’m concerned isn’t about getting signatures on something like this proposition. It is shifting the damn paper around so people have an opportunity to sign it. It is a logistics nightmare.

    That is a lot of people and a lot of time. It may result in a lot of other things that might get deferred (I’m thinking here about the effort from Family Fist – if they’d spent that on locating and reforming the lousy parents…). Unless you recruit a whole new activist group to do it, it seems like a lot of effort from people with better things to do (like running this blog or getting ready for the next election)…

    In the end what you get is an expression of popular will that the government is not obligated to follow.

  18. Tui 19

    I read your post over at NRT and I can understand the sentiment, but are you seriously suggesting the CTU should just abandon all its other plans, carefully planned and developed through the proper democratic processes with its 39 affiliates, just to indulge Unite’s latest stunt?

    You mentioned that for many of the larger unions, very few members are low-waged. It may consequently be assumed that the minimum wage is not a strong priority for many of the larger unions. Why should Unite hang around waiting for the CTU to decide to spend money & (wo)man power on an issue that they have no special reason to care about? They might be waiting a hell of a long time, something that people in low-waged work frankly can’t afford to do.

  19. gingercrush 20

    Would you even want to risk it. Sure if there was such a petition and it went to the polls. I’d vote in favour. But depending how arguments were made, I could well see such a referendum be voted no. Not because most New Zealanders believe there shouldn’t be a minimum wage. But it wouldn’t take much for it to tip to 50%+ voting no. For instance arguments could be made that such a proposal simply goes too far.

    And hooray first question time of 2009.

  20. Tane: Perhaps I should have been more precise – I meant you can’t just rock up and dictate the CTU’s campaign priorities and budget by press release.

    I repeat: I think Unite just did.

    (and to address Steve and lprent): I appreciate this will cause hurt feelings among people who think they lead the union movement (or believe there should be leaders – whatever, don’t care). But the CTU has just been rather decisively outmaneuvered. Deal with it and move on.

    Finally:

    lprent: In the end what you get is an expression of popular will that the government is not obligated to follow.

    But which forces them to pay a political price if they don’t. Which in an MMP environment, could be decisive.

    But the real target isn’t National – it’s Labour. This is really about creating a constiuency for them to tap in 2011, and thereby forcing them to adopt better minimum wage policy.

  21. Tane 22

    Tui, it wasn’t me that mentioned it, but yeah, for some of the larger unions (eg PSA, PPTA, EPMU, NZEI) their members aren’t typically on or close to minimum wage, but they still give support to campaigns to lift the minimum wage – that’s what unions do. On the other hand some large unions like the NDU and the SFWU have quite a few members on or close to minimum wage.

    Overall I’d have to say the CTU has a pretty strong record on supporting low wage workers and minimum wage issues, and certainly spends a far higher proportion of its resources on this sector of the workforce than are represented in its affiliates’ membership.

  22. And hooray first question time of 2009

    If only the audio and video feeds were up.

  23. Tane 24

    I repeat: I think Unite just did.

    Well, we’ll see. They may have caused a wee media splash and they’ve done a good job with that. My concerns are around whether they win CTU support. If they do, then good on them, but I don’t hold out much hope. If they don’t win over the other CTU unions then they’ll almost certainly fail and damage the whole cause in the process.

    Or, quite likely, Unite will lose enthusiasm and move onto the next project, the whole thing will go down the memory hole and this is the last we’ll hear of it.

  24. Me: But the real target isn’t National – it’s Labour. This is really about creating a constiuency for them to tap in 2011, and thereby forcing them to adopt better minimum wage policy.

    Which, I should add, they have been good on. Their record speaks for itself in this area, and it was pretty clear there was bugger all space between them and the Greens on it last election. But this challenges them to go that little bit further with indexing, and it puts the issue in the public sphere for them to campaign on.

  25. lprent 26

    I/S: (and to address Steve and lprent): I appreciate this will cause hurt feelings among people who think they lead the union movement (or believe there should be leaders – whatever, don’t care).

    FYI: Never been part of a union and never been close to minimum wage. My background is in management, science and computers.

    To me this does look a bit like a great technique to win a battle but lose a war. Great if it gets mobilization of new people in being activists. Bloody disaster if it distracts too many existing activists from doing what needs to be done to win in 2011. In particular, to me, it looks like a distraction from the things that have to be done inside Labour (which is what I’m concerned with) in the next 5 months.

    Because of the nature of campaigning these days with MMP you win or lose an election based on how well you organize in first year after an election. That is the really important year. The reason for this is that you have to organize and campaign nationally at grassroots. That means you have to start everything earlier and run for longer than under FPP to make sure that the effort, messages and organisation is reasonably even across the whole campaign.

    Now I’d guess that Unite are going to want to have this finished by the end of this year so that it can join the Family Fist botchup question referendum in 2010. This would be  a great activity for 2010 – but 2009 ??

    Personally I’d tell any Labour activist that they have more effective things to do in the first part of this year. Maybe the Greens have more room?

  26. Tane 27

    From a union point of view I’m not particularly fussed about potential distraction from Labour’s 2011 campaign, they can look after that themselves. It’s the distraction from other upcoming union campaigns (like the fire at will legislation and the upcoming ERA reforms) that concerns me.

  27. Felix 28

    I/S: “If only the audio and video feeds were up.

    I’m getting audio from the quicktime video stream but no video. Better than nothing, but I can’t get anything from the others.

  28. Now I’d guess that Unite are going to want to have this finished by the end of this year so that it can join the Family Fist botchup question referendum in 2010. This would be a great activity for 2010 – but 2009 ??

    Family Fist’s referendum is to be held in July-August this year.

    More importantly, the timing all but rules out a referendum before 2011. Some mucking around and a month for submissions probably takes us to the end of March. Up to three months to decide the final form of the question could take us to June. A year to collect signatures takes us to April – June 2010. 2 months to check them puts us in June – August (if they just fall short, there’s a 2 month extension and another 2 month check, so October – December). Then one month to decide a date, which must be within 12 months of it being presented to the House, unless a 75% majority votes for a delay (and they can’t do that without Labour). It will take at least 6 months to organise a postal ballot (which the EC prefers). it won’t make the election (and the EC hates running referenda at the same time, since they’re not properly resourced for it) – but it will be an election year issue. And that strikes me as being quite good for the left.

  29. Felix: They’re working on the problem.

  30. Parliament webcast is up. Sadly I missed Keith Locke’s question on the SIS.

  31. Tane 32

    but it will be an election year issue. And that strikes me as being quite good for the left.

    I guess, but again, assuming they get the signatures. Without wanting to repeat myself, if they fail, or even worse fail spectacularly, in getting the signatures it’ll seriously undermine the cause they’re fighting for. I care deeply about that cause, hence my concern.

  32. Lew 33

    Chris S: Should we perhaps use the median?

    Any meaningful indexing of anything to a nominal average wage (rate of NZ Super; poverty benchmark, etc) must necessarily use the median, not the mean, for the exact reason you describe.

    L

    [yeah, I’m a big fan of using medians when you’re wanting a ratio or comparison relative to the ‘typical’ New Zealander but all the benchmarks use average at present. SP]

  33. Morgan 34

    Unite are all talk. Remember the 100,000 strong union McCarten was boasting he’d have by the end of last year? Remember all the media interviews where he talked about Unite being the future of unionism? Last I heard all they had was 600 members and a column in the Herald on Sunday.

    My advice to the CTU would be to steer well clear of McCarten’s hair-brained schemes. There are better ways to ruin morale and piss away union funds.

  34. Pat 35

    Hey Tane/Irish/SP/lprent/Sprout

    Any chance of putting up a thread entitled “Question Time Debate” or something like that, so people can discuss parliament goings-ons today?

  35. lukas 36

    Pat, you read me mind. I am finding the difference in the speakers amazing, there really is no comparison. The Speaker is actually trying to get answers out of the Ministers. Might mean question time is actually valuable time from now on.

  36. Tane 37

    Done – http://www.thestandard.org.nz/question-time-open-thread/

    Don’t say I’m not good to youse jokers.

  37. lukas 38

    thanks Tane

  38. lprent 39

    Up to three months to decide the final form of the question could take us to June. A year to collect signatures takes us to April – June 2010.

    That makes the timing better. I’m less concerned about the second half of 2009. It might interfere with local body elections in 2010 if there is the usual lack of early effort and there has to be a final rush for signatures.

    As Tane says, the real issue is that if Unite want to do this then they have to be prepared to put some organizing effort into it. As an policy it is too important to let ‘fail’ in the public perception.

  39. Matt McCarten 40

    Unite gets a lot of flack from sectarians that we have deliberately ignored over the years. But given some of the silliness on this blog we should provide some information that might help activists understand our thinking.
    The referendum idea come from our members at McDonalds who have battled their employer for over a year. Unite did consult and advise the CTU and other unions. There wasn’t a lot of buy-in for a minimum wage referendum although there was support for a CIR on something else.
    But 75% of our members are on the minimum wage or have their CEA’s linked to the minimum wage and it’s our core focus.
    Some may remember four years ago that Unite concieved the “supersizemypay” campaign for $12 an hour and end youth wages . Other unions and many on the left thought this was impossible. Sadly the attacks on this blog are similar to the ones we recieved then.
    That campaign succeeded after Unite was able to mobilse thousands (yes thousands!) of young workers and students. Interestingly we recieved almost no support until it was obvious that we were winning. Now it seems everyone takes credit for the $12 and ending youth rates.
    Unite has always had to run public campaigns to pressure our bosses rather than just relying on workplace strikes – although there wouldn’t be a week goes past without a strike somewhere.
    Unlike traditional unions our membership workplace turnover is 53% a year and in fastfoods and cinemas over 80%. We have to use our campaigns to continuely recruit and involve workers.
    My comments regarding a 100,000 member strong union was around the SFWU, NDU and Unite merge. That meant having to double the then present numbers in a couple of years. Is that unreasonable?
    Do people think the private sector unions staying at 9% of the workforce is acceptable? Does the fact that union density is now smaller than it was when Labour came to power in 1999 worry anyone? I assume the confidence exhibited by some of the bloggers here suggests there is some cunning plan that I’m not aware of?
    We have recruited over 20,000 members in 5 years but due to turnover we currently have 7500 finanical members. Even I couldn’t pay the wages of 14 organisers and 4 support staff on 2000 members. Give us some credit that for doing the hard yards that other unions have shyed away from. In the areas we are organising unionisation has for years been less than 1-3%.
    If you really want us to be a big wealthy union we could recruit in sectors other unions claim? Frankly if we did, we’d clean up. But we choose to do the areas no one else will do. (The only exemption was SkyCity where we have 1000 members and the SFWU have 300. You don’t want to hear why this happened.)
    Unite intends to force the plight of the low paid into the public conciousness. The referendum is a good way to advance it. When we get 300,000 names – which we will, does that mean that some slaggers might give us some credit or will there be another hurdle set up for Unite to jump over?
    Regards, Matt McCarten

  40. Morgan 41

    Matt – you know full well that supersize my pay was driven by one organiser with an astounding talent for campaigning. You also know that organiser bailed after bad blood created by exactly the sectarian bullshit you claim to be above. You also know that you don’t employ 14 organisers. At least not on a living wage and not without a web of . Some of us know how it works, in fact some of us have been there.

    Your (or rather Treen’s) consultation with the CTU was token to say the least and I have it on good advice that the CTU was keen to pick the referendum up and run it as a CTU initiative.

    Campaign-wise the CTU aren’t exactly fighting fit but neither is Unite. The difference is the CTU don’t constantly overplay their abilities. 300,000 valid signatures in a year is a huge organising effort. You need to ask yourself why you decided to announce your referendum when you know it will be three months until you can go ahead with it. At that time the media will be all like “what, you mean this is just starting? Weren’t you doing something three months ago?”

    That said, if you get 300,000 signatures I’ll be very pleased and I’ll happily apologize for doubting you. But as it stands I do doubt you will manage it.

  41. Matt McCarten 42

    Jeezus Morgan…chill out! Did I borrow your lawnmower and not return it?

    For background purposes, when I talked to the CTU privately the position was that the CIR was a good idea, but they’d rather support a referendum on potential changes to the Holidays Act rather than the minimum wage.

    The followup report I got from a number of secretaries at the CTU meeting you identify was that only the president was openly keen on a referendum when Mike Treen formally advised them of our intention. Why is it that somehow an idea our union comes up with to help build public consciousness around our members’ main issue is somehow attacked because some individuals from other trade unions think that they have the right of veto? Other unions come up with campaigns all the time and we don’t presume to have any right to tell them what to do.

    Anyway it made sense to initiate a referendum when the minimum wage review was announced on Monday. Our application is unlikely to get formal approval before April so we assume it’ll start in May. Impossible to get 300,000 names? It’s 1000 names a day over 12 months.

    Simon O was a (the) central organiser for the first supersizemypay campaign and deserves great credit. I think the workers who struck, the students who demonstrated and the other crew who worked long hours may have had something to do with it’s success too?

    It’s true we have a principle of not paying anyone over $40K. Call me old school, but paying union officals salaries far in excess of their members incomes seems somehow, well … unsocialist. Surely the remuneration of a union leader should be comparable with their members – not with professionals from other unions. Apparently, there used to be a time when unions were being built, no officials got paid. Imagine that!

    I’ll take my own advice now that I give to other Unite crew (I tell them not to waste their time on blogs) and go and do some work. But if anyone does want to help the campaign, drop me a line.

    Matt

    PS I promise not to write again.

  42. vto 43

    Mr McCarten, wasting time on blogs has a use. It is an easy access point to those with whom you would never normally come across (of opposing views) to test and thrash and abuse and etc. Political thrashing can take its toll on those nearest and dearest etc, so this allows that venting (and enjoyment) without upsetting those important to you. Write again you silly noodle.

  43. IrishBill 44

    Matt, you’re welcome back anytime, god knows half of the union movement and the business community have posted here at one time or another. I’m personally a big fan of unite for unionising the people that need it most and are hardest to organise but like Tane I’ve seen a few things happen that simply should not have been allowed to. But I’ve seen things in every union, political party and political group I’ve been involved with that shouldn’t happen, simply because no organisation is perfect all of the time. That said I wish you luck with the petition and will be pulling whatever strings I can in the union movement and the broader political arena to promote it. Perhaps you would like to write a piece on the standard to promote it come May?

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