Where’s my share?

Written By: - Date published: 11:00 am, February 14th, 2018 - 35 comments
Categories: business, class war, Economy, employment, poverty, Unions, wages, workers' rights - Tags:

Had anyone with a job (other than the top 2 tiers of management) had a wage increase higher than inflation recently?

Why is it that wages don’t increase when our headline unemployment rate is so low at 4.6% and falling?

Too often on the left we are used to seeing wage competitiveness falling over time due to the weakening collective bargaining power of unions.

What really matters in wage weakness is concentration of power. Simple as that.

New Zealand is a nation rife with duopolies and oligopolies. They control our economy far more than the government does. Let me list them:

– Fonterra Dairy products
– Fletcher Building, Carter Holt Building supplies
– BP, Shell, Mobil and Z Energy Petroleum
– Progressive Enterprises, Foodstuffs Groceries
– Air New Zealand and Virgin Airlines Local air routes
– Lantern Insurance
– Vector, Genesis, Contact, Meridian, Trustpower Electricity
– Talleys, Moana Pacific, Sealord Seafood
– Auckland Airport International air travel
– Ports of Auckland and Port of Tauranga sea ports
– Talleys and Watties Vegetables
– Westpac, Commonwealth, ANZ Banking
– Constellation, Heineken, Kirin, Pernod R Alcoholic drinks
– Silver Fern, ANZCO, AFFCO, Alliance Meat

OK maybe I’m a little harsh on wine producers there. But I’ve just described most of our private sector economy. Downstream they control even more of it. Some are regulated, somewhat. But that regulation makes no difference to the wages that we get: primarily they regulate price to consumers.

Those industries above exposed to the public sector operate very, very closely with a tiny and concentrated public sector – a public sector who are overall weak regulators and overall naïve clients.

And you could put a cape on E Tu, give it a running start, a pole, and a favourable wind, it wouldn’t leap the tall buildings of concentrated capital enough to gain big wage lifts.

So the core reason that wages are not lifting is: there is no competitive pressure for those companies to do so. They have a market position and no one challenges it, so you get paid what you get paid, or you can leave and there is no one else to go to. And that won’t be solved either with altering legislation to make collective bargaining slightly easier, or by toning down the pay of public sector chief executives.

Wages will lift when there is real competition for workers.

Funny thing about genuine intense competitive pressure: it tends to squeeze profits. Now look across our sharemarket: filled with low-risk near-monopolies or oligopolies who roll out reliable dividends every year. Profits are rolling in nicely cheers.Sure, they bitch and moan and complain about having to deal with a new government. But this government is not lifting a finger against them. Profits are fine (granted Fletchers are fucking up).

So rather than responding to intense competitive pressure, it looks more like our key employers are resisting real wage rises to further lift profits, pay bigger dividends, and earn their senior executives bigger bonuses. They are squeezing down pay rises because they can.

So here we get to the limit of what this government currently is: it is great at redistributing tax. It is great at effectively subsidising the wage increases that companies should be delivering, through Working For Families and other fat handouts.

It has no plan for the economy. Write some tiny R&D credits here, throw meaningless grants out the window to the regions there, hand out fried bacon, build a fake horse racing track. Sweet F.A.

This government needs to be held to account to smack the heads of the highly concentrated capital and their entrenched positions. Unless they do, our wages are going to stay exactly where they are.

At 4.6% headline unemployment, and a sustained boom in most sectors, there will be no better economic conditions for them to do so. We deserve a pay rise.

When times are this good, and a Labour government is in power, we must get our share.

35 comments on “Where’s my share?”

  1. JohnSelway 1

    Yes but only just slightly above inflation.

  2. Andre 2

    Transpower deserves a mention too. Sure it’s an SOE, but it too is a monopoly in its sector (to its customers and to its specialist employees), bloated executive pay and so on. Transmission and distribution charges are also the largest component of most electricity bills.

    https://www.meridianenergy.co.nz/your-home/pricing-and-rates/more-about-electricity-pricing

    I can live with the idea of an electricity SOE paying an excessive dividend to the government by viewing it as a tax on energy wastrels. But it still contributes to New Zealand’s high cost of living, high cost of doing business, and low productivity.

    • Ad 2.1

      Agree.

      After Solid Energy’s forays into lignite and Pike River, and MRP’s unusual investment decisions into exploration, it’s really hard to see much risk coming out of the SOE generators.

  3. Ad 3

    A curiously oblique set of measures from Robertson today.
    Most of it is through a risk framework, rather than a reward framework.

    http://www.scoop.co.nz/stories/PA1802/S00108/robertson-the-future-of-work.htm

    It’s about time Robertson started joining some of his actual pieces up into a real framework, instead of a set of anodyne straplines about wellbeing.

    It’s like we’ve got a full-on Fabian government trying to understand a full-on oligopolistic country.

    Why the fuck does this government not call out Fletcher Building when it is over 6% of the entire sharemarket?

  4. Keepcalmcarryon 4

    And the “right” to import cheap low skilled labour to keep wages down

  5. james 5

    I would be interested how many on here own businesses and have paid staff a wage increase higher than inflation recently?

    • Puckish Rogue 5.1

      I’ve long thought that a large number on the left seem to think that private business is quite similar to the government in that private business is there to provide jobs for workers or housing for everyone

      So if a business goes under well it doesn’t matter because a new business will just spring up to take its place and everything will go on as usual

      • I’ve long thought that a large number on the left seem to think that private business is quite similar to the government in that private business is there to provide jobs for workers or housing for everyone

        The Left, unlike the RWNJs, isn’t a hive-mind.

        IMO, private business is there to screw over as many people as possible as it’s the only way to get rich.

        So if a business goes under well it doesn’t matter because a new business will just spring up to take its place and everything will go on as usual

        That’s pretty much the entire idea behind the free-market hypothesis.

    • Irrelevant. If there’s a genuine shortage of workers, pay goes up – you know, that supply and demand thing that business people supposedly know something about. Pay not increasing? No genuine shortage. It’s fairly basic stuff.

      The interesting bit is in the “why” part. Why is there no genuine shortage, when employers are wailing that they can’t get workers? Surely the two are incompatible?

      • Keepcalmcarryon 5.2.1

        The answer is importing from someone else’s cheap labor market and exploit them, suppress NZ wages win win, it’s a working a treat

  6. Ad 6

    Won’t get that from me.

    It’s work.

  7. cleangreen 7

    Is this the $11.7 billion dollar hole Joyce was talking about?????

    Giving back our share of the NZ commonwealth to the wage earners????????

    Joyce was to much of a tightwad to give anything back to his most hated sectors of the economy;

    Those were;

    Our people
    Our kiwi-rail.

    They both got nothing but cuts and hurt from Steven Joyce.

  8. Leonhart Hunt 8

    Missing fairfax media, huge media monopoly.

  9. When times are this good, and a Labour government is in power, we must get our share.

    Labour is a capitalist party and will support the capitalists continuing to screw us over.

    • Enough is Enough 9.1

      Labour’s actions in their first 100 days certainly supports your conclusion.

      How on earth they are signing the TPP (or whatever name the corporates have given it now) is beyond my comprehension.

  10. Sanctuary 10

    I hate to admit it, but I got a good pay rise.

  11. Bill 11

    This government needs to be held to account to smack the heads of the highly concentrated capital and their entrenched positions. Unless they do, our wages are going to stay exactly where they are.

    NZ Labour aren’t going to much of anything.

    They’ve left economic settings in place because, although Ardern conceded that “the experiment” had failed, economic settings have apparently got nothing to do with determining where power will tend to concentrate.

    Neo-liberalism is (paraphrasing Ardern) “What happens to people.”

    Meanwhile, NZ has a Green Party leader who, when challenged, stated that it was the intention to slate any carbon price home to consumers on a “user pays” basis.

    Way I’m reading it boils down to some (unprepared for) government ministers, with bugger all political imagination or courage, all making soothing sounds with their mouths

    • Keepcalmcarryon 11.1

      Jacinda runs the risk of being an Obama, full of soothing words but short on delivery. That way lies a backlash, ask the Americans.
      Its still early days though and there is time for meaningful change in NZ

    • Meanwhile, NZ has a Green Party leader who, when challenged, stated that it was the intention to slate any carbon price home to consumers on a “user pays” basis.

      While we have a market system to limit use of scarce resources and to limit damage to the environment and society then that is what needs to be done.

      The pricing mechanism is there to actually there to stop excessive use and the only way that can happen is by charging the users.

      And you keep saying that we need to take climate change seriously and then whinging when a political party actually does.

      • Bill 11.2.1

        For the sake of argument, I’m going to put aside the fact that price signals won’t work and assume that they do/will.

        New Zealand governments signed up to accord after accord that committed the NZ Government to take action on global warming incorporating notions of equity. User pays is highly inequitable.

        What’s more, the poor people hit hardest by user pays have contributed the least to global warming, and grounds exist for their carbon footprint going up in the short term (retro-fitting their homes and houses for example) while that of richer people comes down that much quicker to compensate.

        • Draco T Bastard 11.2.1.1

          User pays is highly inequitable.

          We can probably refine that by saying that user pays is massively inequitable when a few own everything and don’t have to work to get by.

          What’s more, the poor people hit hardest by user pays have contributed the least to global warming

          That true. Only the rich can afford to waste so much.

          But that it self raises another question: Is our income far too high?

          As I’ve pointed out before: Nobody should be able to afford to drive a car.

          That would, of course, require everyone to have a similar level of income.

          A market system can only work when everyone has the same level of wealth.

  12. weka 12

    So here we get to the limit of what this government currently is: it is great at redistributing tax. It is great at effectively subsidising the wage increases that companies should be delivering, through Working For Families and other fat handouts.

    Labour aren’t good at this. They do it enough to stop extra people living in poverty. They don’t redistribute tax to help out the people that are really struggling. And we’ve yet to see if they’re going to do much about the knee hobbling policies that stop people accessing the things that are available.

    • greywarshark 12.1

      Why don’t they start taking small steps, small easing here and there to get the idea of how things can be done. Aim for something every 2 months – 6 changes a year.

      It might be printing out all the options open to people to get from social welfare and sending everyone a copy. Jenny Shipley sent everyone a copy of a pamphlet about taking responsibility for yourself so you didn’t need welfare, about replying to a questionnaire about understanding what a citizen could expect and what they should be doing, I think not having children when not married was one of the things.

      So do something in reverse Labour coalition.

      • weka 12.1.1

        I think the problems is the underlying values. Labour appear to believe that welfare is a necessary evil, and that some people need motivating to get off a benefit even into shitty job. This affects what they are willing to do. They’re more carrot than stick relative to National, but they still consider the stick a core tool even if it’s a softer stick.

        Instead, if one looks at humans as inherently valuable and able to contribute to society, create the conditions for those people to thrive on their own terms. And if you can’t do that, in an era of permanent unemployment, let the people who don’t want to work or can’t, be on a benefit with enough to live on.

        • greywarshark 12.1.1.1

          Good one weka at 6.10pm
          +100

          Further; this is a long-form thought piece for many people, speculative and a hypothesis, not a simple jibe at some actor on the political or business stage, or some proposed infrastructure, so see if you can read it to the end as a mind exercise! (It is dangerous to an active enquiring mind to avoid all thought that is annoyingly long and not immediately relevant by putting tl;dr.)

          Let people be on a benefit – particularly after the government itself has altered
          the terms of trade so much that N Z businesses that ran profitably and employed NZs have been put out of business by companies from overseas invited to sell us their stuff by government and the importing sector. There is no likelihood of getting a thriving working society as in the 1960-70’s again that did have with economic problems that required firm handling and understanding by wider society. They could have been fixed with a lot of wrangling perhaps over a decade, but the opportunity to do this has been lost. We now have economic problems still and no thriving, working society.

          We are obsessed with the wonders of the economic age and are teaching children to embrace it and to do everything with their brain and their friend that will be everything to them, the tech answer. They are not being encouraged to write, not think anything through simply pencil to paper abut only through a machine and a huge thinking and adminstrating system, go on line for the answer to life and everything. This tends to make the modern citizen more conducive to giving up their personal will, their knowledge and physical skills, and depend on technology, and leads the way to being controlled by tech, artificial intelligence and robotisation. Soon those of us with pre-tech experience, before the 1980s, will die out and the way we are going we’ll end up similar to the people in Brave New World by Aldous Huxley.

          Also NZs have been put out of jobs by the government encouraging outsourcing of jobs to the overseas poor. Against those and other limitations on employment opportunities, also the deliberate limiting of wages by going hard on unions, and putting low inflation ahead of other economic levers, the ability to to self-manage of the people reduced and turned large numbers into welfare recipients, at all levels from desperate for housing or because of lack of money for food, to become food bank beggars.

          Yet the government then turns round and punishes those citizens suffering the results of what the Labour government and their Gang of Four or more. deliberately brought about and National have gleefully advanced and expanded. Both major Parties have worked in conjunction with Treasury, which seems made up of narrow-minded, po-faced snobs good at mathematics with capitalism and wealth carved into their hearts and embedded in their souls with an affect like an infected, poisoned dart.

          We have already given up devising some NZ focussed policies and imported them from the most powerful English-speaking land, the USA, such as in education. We have imported their economic policies, through the OECD, the Chicago school bringing us neo-lib economic framework, Harvard training the thinking of decision makers, for instance.

          And we do have a dangerous system of exploiting to the point of extinction or decline to uneconomic levels, every possible avenue to wealth available in this country, with no responsibility taken for bad affects, and a diminishing standard of human living conditions, with a stamping-out-bushfires mentality from most of those managing each administrative entity.

  13. Kevin 13

    Interesting read on The Intercept
    https://theintercept.com/2018/02/09/tax-bill-democrats/

    “IN DECEMBER, REPUBLICANS achieved their long-held dream of lowering taxes for the wealthy and corporations and increasing taxes for pretty much everyone else.

    Democrats were universal in their hostility toward the project, but as the Trump administration has pulled off a PR coup — with companies announcing “Trump bonuses” and workers seeing bumps to their take-home pay — the party has not yet formulated its response nor have they suggested what they’ll do when and if they return to power.”

    So, in the home of unbridled capitalism, businesses were passing on some tax relief to their staff. Here in NZ, what are the chances of that happening?
    Fuck all, in my opinion.

  14. ropata 14

    Wage Growth vs. Profit Growith, 2017 chart (from Aussie) 🙁

    #qanda pic.twitter.com/dqZUjaWQr4— Just human (@Backoff11111) February 12, 2018

    • It’s been that way across the OECD for the last thirty years. Profits have sky-rocketed while wages have stagnated. At the lower end, wages have gone down in real terms.

  15. Ken 15

    Nothing for years.

  16. gsays 16

    Thanks ad for this post.
    As I am in hospitality as a chef, I find it hard to understand the poor wages when, apparently, there is a shortage of skilled workers.
    I am not sure if my beloved trade (used to be a profession) conditions are being diminished because of greedy employers or sub standard workers.

  17. WC1 17

    Percentage wage increases are one of the reasons for the widening gap between the top and the bottom earners. 2% for someone on the minium wage is not a lot, but for a manager on $200,000 its pretty damn good. As a British trade union leader put it “5% of nowt is nowt”.

  18. patricia bremner 18

    Which is why this government wants to bring in benchmarks for alike work.

    I’m going to use the WORD. To make it FAIR.

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