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Why are wages flat?

Written By: - Date published: 7:02 am, August 9th, 2016 - 178 comments
Categories: business, capitalism, class war, Unions, wages - Tags: , , ,

Some employers would have you believe that they can’t afford wage increases:

Employers refuse to give pay rises because they ‘can’t afford them’

Employers are rejecting calls for higher wages, saying they can’t afford to pay them. But unions argue higher wages will not just be good for low paid workers but will also help boost struggling regions and the economy.

Wage increases slowed to 1.5 percent in the year to June, and have now been below 2 percent for the last four years.

FIRST Union general secretary Robert Reid said it shouldn’t be that way, particularly for the lower paid. He said meaningful pay rises benefit not just workers, but businesses too. He points to the extra $1.25 an hour Pak’n Save workers received in Whakatane last year. “That was an extra quarter of a million dollars going into the Whakatane economy, now that was good for our members, that has to be good for Whakatane,” Mr Reid said.

That doesn’t hold much water with employers. Northern Employers and Manufacturers Association chief executive Kim Campbell said firms were also being squeezed, and could not put up their prices.

Council of Trade Unions president Richard Wagstaff said after years of flat wages, patience had worn thin among workers, and more were now prepared to flex their muscle.

The Nats would have you believe that the economy is in good shape, in which case there is no excuse for the ongoing stagnation of wages.

Of course it’s not as simple as that. The economy is pretty stagnant, apart from some growth due to immigration (and the Christchurch rebuild). Some employers may be genuinely struggling with wage rises. Unfortunately it’s difficult to tell those cases from the ones that are just making excuses while gouging more profits out of workers.

178 comments on “Why are wages flat?”

  1. Paul 1

    One word.
    Neoliberalism.

    • Michelle 1.1

      one word ‘Greed’

      • Colonial Viper 1.1.1

        This post helps round out the idea that labour and wages have been continuously undermined and deprecated in favour of ownership and financial capital.

        Financial capital has the power in this economy. Financial assets are forced to inflate, while worker incomes are forced to deflate.

        It’s utterly deliberate.

  2. One Anonymous Bloke 2

    Lab5 increased the minimum wage every year for nine years at a rate higher than inflation, and unemployment fell.

    There is no evidence that paying good wages hurts businesses.

    • Enough is Enough 2.1

      The Nats have failed to lift the minimum wage each year they have been in power.

      • Chuck 2.1.1

        Really??

        2008 $12 hour, each year since it has been increased. With the current rate $15.25 hour.

        • Enough is Enough 2.1.1.1

          So no different to Labour then right?

          • Colonial Viper 2.1.1.1.1

            Barely any difference to Labour. If you look at small things like first home affordability, you’d have to increase the minimum wage by 3% a month just to keep up.

            Otherwise you’re just falling behind further and further every day.

          • Bob 2.1.1.1.2

            Massive difference, inflation rates

          • Richard McGrath 2.1.1.1.3

            Exactly: National = Labour-lite. National MPs are conservatives, and tend to leave in place what Labour enact; apart from a few token reforms, they are too scared to make major changes. Hence continuation of inflationary monetary policy, increases to the minimum wage, virtually no deregulation of anything significant.

    • The issue is persuading low-wage employers to lift wages above the minimum.

      I bet if you raised the minimum wage they wouldn’t be moaning about being unable to afford it.

    • Richard McGrath 2.3

      Unemployment statistics are open to government manipulation. If raising the minimum wage directly reduced unemployment, the Clark government would have raised it to $100/hr.

      A mandated minimum wage level discourages employment and will tend to create unemployment if increased – that is basic economics. Paying good wages can be beneficial, provided the productivity of labour rises as well. During recessions and financial contractions, wages should be allowed to drop in order to maintain profits and avoid layoffs.

      Quoting a gross profit of $362 million is irrelevant without saying what % return on capital investment this represents.

      • One Anonymous Bloke 2.3.1

        that is basic economics

        So what? It bears zero relation to what actually happens on Earth. If it did, the various minimum wages in the various US states would correlate to unemployment statistics, and they don’t.

        What would you know about basic economics in the first place? Cullen had to rub Treasury’s face in the facts before they withdrew the bullshit “advice” they were giving on minimum wage increases under Lab5.

  3. One Anonymous Bloke 3

    As for the question posed in the OP. why are wages flat, you only have to look at eg: Mr. Peter Talley’s attacks on the freedoms of expression and association, and consider that the National Party has rewarded him with more than a title.

  4. Tiger Mountain 4

    wages and productivity began to part company in the mid 80s and really went their own separate ways after the 1991 ECA (Employment Contracts Act), Nationals “union killer” that did not even mention the word “union” in its text, the fall out and lost generational memory of General Wage Orders and National Awards haunts the movement still (as does KG Douglas and key union leaderships capitulation, but that is another story)

    so employers, particularly SMEs have had it their own way for decades, and bought the bach, boat and Commodore HSV instead of investing in R&D or ‘their’ workers, now there are glimmers of union members fighting back for the basics they “don’t like it up ’em”

    wages are flat partly because the structural underpinnings of neo liberalism are still there 30 years after Roger and Ruth and partly because of low union density and the changed nature of work itself from largely full time to precarious, contract, service and agency, how much leverage do slave worker interns have by themselves?

    campaigns like the worthy “Living Wage” are really more a middle class organising technique to get around low union density, but Helen Kelly had the right idea with community organising as happened in Forestry, Talleys etc.

    organise, join your union, solidarity with others is how it is done, the fast food and supermarket retail workers are good examples, the Dairy Workers Union has 90% or higher coverage at most sites and has increased its membership in recent years and other unions have their success stories and quiet achievements also

    Bosses never handed anything over to workers without a fight, the digital generation and boomers alike need to relearn that and take on these bastards like Serco and Compass and others that export all their profits while feeding on the remains of public infrastructure–here endeth todays…

    • Garibaldi 4.1

      +1

    • Macro 4.2

      Wages are also flat because of opening our borders to every cheap product in the world. In 1984 NZ workers went into direct competition with slave labourers around the world notably in Asia with the subsequent loss of jobs in manufacturing, forestry, and clothing etc.
      NZ has exported along with wool, beef, milk powder, lamb, unsawn logs, and kiwi fruit, thousands of jobs to China, India and anywhere where labour is cheaper than here.
      If we are to get back the equality we once shared as a Nation we have to close our borders again to all the crap that sits in $2 shops, and elsewhere. and begin making our own clothing, fridges and freezers, assembling our cars, making our own wine bottles, and tyres, and trains and busses, and all the things we used to do as a Nation before Roger royally rogered us.

  5. Ad 5

    Wages and income, not housing, is where the great political debate should be.

    My colleagues and friends talk about the Unitary Plan like it is a great money-printing machine. Almost all New Zealand’s domestic productive capital is now tied up in housing, rather than owning businesses.

    Our economy has developed into something largely foreign-owned. So few dividends come here.

    Supermarkets will rid themselves of checkout and freight staff as quickly as they can. Those businesses are just bulk suppliers slicing little margins off producers. They add even less value than petrol companies.

    Wages are flat because we are a bulk commodity producer who is largely foreign owned and don’t spend capital on business ownership.

    • Graeme 5.1

      “Wages and income, not housing, is where the great political debate should be.

      My colleagues and friends talk about the Unitary Plan like it is a great money-printing machine. Almost all New Zealand’s domestic productive capital is now tied up in housing, rather than owning businesses.”

      Couldn’t agree more. It’s all about “growing assets” now, but the assets are not productive. We may as well be speculating on tulip bulbs. https://en.wikipedia.org/wiki/Tulip_mania

      We’re tourist retailers and pre 2008 the NZ market was half our market, now it’s almost insignificant. There’s very little spare cash floating around the economy right now. Mind you, NZ is not alone there, the Australians are pretty tight with their cash too.

      • Ad 5.1.1

        If I had a complaint about the framing of the post, it’s all about the need for greater redistribution, and a complaint that weak unions are growing weaker in their capacity to strike bargains that gain better redistribution.

        Housing is definitely our own tulip-mania.

        Even tourism has taken far too long to move its focus up the value chain from commodified souvenirs and backpackers and eternal flat white, to selling goods and services that extract really high dollars out of the people who fly so far to get here.

        To me the housing crisis is a large symptom of National’s failure to manage and grow the economy into higher and higher value and productivity.

        • Graeme 5.1.1.1

          “To me the housing crisis is a large symptom of National’s failure to manage and grow the economy into higher and higher value and productivity.”

          Despite their attestations to the contrary, National are the party of wealth re-distribution in New Zealand. They are all about moving wealth to ‘their people” not growing the whole economy. The economy growth role has generally been Labour’s. Part of it may be timing, National tends to be elected on economic downturn, and by the time the electorate is sick of them the economy is picking up, and vice versa.

          But a lot of it is cultural. Labour, and the general left, see’s the world as WE, from an inclusive point of view. People feel involved and positive, and the place goes forward for the bottom up. National tend to see it all about ME, and the world as a zero sum game, so it’s all about taking wealth from someone else. Hence the emphasis on property, and finding someone new (immigrants) to keep paying more. The last Labour govt fell into this trap too, to their cost.

        • Graeme 5.1.1.2

          “Even tourism has taken far too long to move its focus up the value chain from commodified souvenirs and backpackers and eternal flat white, to selling goods and services that extract really high dollars out of the people who fly so far to get here.”

          Our industry is the ultimate boom-bust industry because it trades on the peak of discretionary spending. And that’s global. Here in NZ we’re right at the top of that too because of our distance. So you get a dynamic of operators scrambling for whatever cashflow they can get in downturns, and going into all sorts of low yield “emerging” markets. Then when it picks up we’re able to attract better yielding markets. This puts us out of the emerging market’s price ability, and the lower yield markets are displaced by the better ones, which is happening now.

          Be careful about dismissing the whole backpacker market. Most of it has a very high financial return to New Zealand. Probably the best business for cash into the NZ economy in Wanaka is the tandem skydive operation, nearly all backpackers. Unfortunately it’s just been bought by an Australian listed company.

          • Ad 5.1.1.2.1

            Would be good to hear more from you on where you think tourism is going.

            I totally get your point about Wanaka.

            • Graeme 5.1.1.2.1.1

              “where you think tourism is going”

              That’s a big question, care to be more specific.

              • Ad

                Is it trending towards higher-value businesses and higher-value wages and salaries?

                Or is it largely stuck in a low-rent gear?

                • Graeme

                  There’s a couple of dynamics with this.

                  First there’s the cyclic thing where competitive pressures, not to mention the bank manager, mandate chasing further down the value chain when it’s quiet. So you’ll get hotels and tour operators offering 2 and 3 star products at the bottom of the cycle and then trying to climb up the value chain in the peaks. It’s a business culture thing and not restricted to tourism. But tourism has much more dramatic cycles than other industries due to it’s discretionary nature and vulnerability to outside events.

                  The industry is very vulnerable to the value of our currency. Too high, above USD0.70, it’s hard work, there’s better value elsewhere in the world. Get it down below USD 0.60 and it’s really easy. And that’s even more relevant to the domestic market as we will tend holiday at home at those currency values. The best thing a government can do move tourism up the value chain is a low, stable exchange rate.

                  There’s also a rise in the value chain as markets mature. Initially a market will start with low value package tours and slowly mature to independent travellers. US, UK and Japanese markets show this characteristic, with the Chinese getting there very fast. The more mature the market, the higher the expectation for quality and value.

                  At present there’s a huge difference between the top and bottom that comes through our door. We’d be on the upper side of middle in price scale, but can be out of their price expectation by an order of magnitude at both ends. Not that many at the top, but it’s a good day if we can get the odd one. A day at the other end of things is a long day. Cultural differences around the relationship between ticket price and retail price keep it interesting as well.

                  On the wages side, some operators pay very well for very good people. But because tourism jobs are in nice places where lot’s of people want to live for the “lifestyle”, there’s lots of competition for employment, so there’s a general downward pressure on wages. This goes from the kitchen hand to the CEO. There’s always someone new in town who want’s your job and will do it for less, and is more qualified than you. The same dynamic does wonderful things to accomodation costs.

                  At present the observation would be that operators towards the upper end of the market, with good products, are the ones doing better, or are investing in their business. Weather they actually are, we probably won’t know until next down turn. You could be really cynical and say that the biggest driver of the local economy isn’t tourism, or development, but cash burn

  6. Nic the NZer 6

    This is symptomatic of a basic jobs market failure, the failure to create enough jobs to satisfy all the potential employees. Because of this failure employers are not and do not need to compete on wages especially at lower wage levels. Forcing employers to be concerned about retaining even their low wage employees (or lose their workforce and market share to the competition) would generate a better outcome over all.

    We can hardly expect most employers to take the initiative here as each employers best interests is served by refusing to increase wages and hopeing the competition will support demand. If successful then the non wage increasing employers get to freeload off the overall increase in turnover without themselves incurring the added costs.

    Shockingly the govt knows about this failure but chooses to target an unemployment rate being at the theoretical NAIRU rate (e.g around five percent unemployment) believing inflation targeting takes a higher priority.

  7. DH 7

    I’d much rather see a reduction in the cost of living than an increase in wages. If the lower paid could rent (or buy) a decent house for $150-200 a week they wouldn’t need a pay rise would they. Too much of the pay packet is disappearing into non-productive pockets, address that & we’d start seeing a rise in the standard of living.

    If we look back at the history of wages the pattern is pretty apparent. Everyone wants income parity, a wage rise for the lowest paid always results in everyone else demanding a pay rise too. Ultimately we end up back where we started only the lowest paid are hurt more by inflation than the rest so they go backwards.

    • One Anonymous Bloke 7.1

      Who’s “we”? When I look back at the history of wages, the pattern that emerges is that the societies with the highest values of the GINI have the worst social outcomes.

      You don’t have to take my word for it though: various medical journals, the NZ Treasury dept. etc all have lots of information on the subject.

      • DH 7.1.1

        If your argument had any merit whatsoever we wouldn’t have poverty in NZ would we. Wages have never fallen in this country, by your logic we must be living in utopia by now.

        • One Anonymous Bloke 7.1.1.1

          1. It isn’t my argument: it is one of the facts accepted by the NZ Treasury department, and used to set economic policy. Your reckons, not so much.

          2. Your “logic” doesn’t follow: wages that increase at a rate lower than the CPI will certainly produce poverty. For example, minimum wage increases have kept pace with food and clothing inflation, but not with housing inflation, and certainly not with wages at the top end of the scale. That’s before we begin to consider financial capital.

          3. Strictly speaking, the GINI doesn’t measure poverty.

          Google is your friend.

          • DH 7.1.1.1.1

            Ok, you got me. Admittedly I was distracted but I know better than to pander to the likes of you. You got a bite out of me, you win, now go do whatever it is you do and move on, there’s still flies out there with wings on.

            • One Anonymous Bloke 7.1.1.1.1.1

              Do you always lash out when you’re wrong? You must lash out a lot.

    • Draco T Bastard 7.2

      Going to have to agree with that. IMO, we can’t actually afford high wages and we most definitely can’t afford wages/salaries over ~$100k.

      • srylands 7.2.1

        Who is this “we”? If companies pay the salary they can afford it.

        $NZ 100K a year is very little. You can’t afford a decent house, car, school fees on $100K a year. Not even close. That does not even allow for vacations, retirement plans, caring for elderly parents.. it goes on.

        • joe90 7.2.1.1

          With a full-time median income of around $51,000, how do a majority of working NZ’s cope?

        • Draco T Bastard 7.2.1.2

          Who is this “we”?

          NZ.

          I thought that would have been obvious even to a stupid fuckwit like you.

          • Richard McGrath 7.2.1.2.1

            “NZ” doesn’t pay my salary, my employer does. By doing so, “NZ” is not losing anything – in fact the government grabs a fair chunk of my earnings on behalf of “NZ”.

            You appear to have some anger issues, when a challenge to your assertion is met with abuse. Chill out.

            • Draco T Bastard 7.2.1.2.1.1

              “NZ” doesn’t pay my salary, my employer does.

              Actually, if you’re working in NZ then NZ does pay your salary and your employer doesn’t. It’s about how much the country can afford for each individual to spend.

              By doing so, “NZ” is not losing anything

              Of course it is – it’s losing its resources. You know, the actual limited physical resources that economics is actually about.

              in fact the government grabs a fair chunk of my earnings on behalf of “NZ”.

              And that, of course, is also wrong as well as all the wealth in the country starts at the state level. This is true no matter how the banksters and other rich psychopaths like to portray it.

        • mikes 7.2.1.3

          “$NZ 100K a year is very little…”

          Sad then that 95% of NZ workers receive less than ‘very little’ for their efforts.

    • millsy 7.3

      Agree with that (to a point). Little point in having a $50 a week payrise when your landlord hikes your rent by $60.

      • DH 7.3.1

        Exactly millsy. The lower income earners have gone backwards in NZ over the last few decades yet their wages have, for the most part, kept up with CPI inflation. If the inflation/wage theory was true for everyone then their financial position would have remained the same so it seems clear that inflation for the lower income earners is higher than the average. Either they need bigger pay rises than everyone else or they need their costs reduced (or both).

        The biggest bill for low income earners is housing and that’s largely where their costs have gone up more than the CPI. Address housing, rather than wages, and IMO we’d start seeing a much more significant rise in the standard of living of those who need it most.

        • One Anonymous Bloke 7.3.1.1

          We need to do both: lower the value of NZ’s GINI and make housing more affordable.

        • Craig H 7.3.1.2

          Housing (including power) is 21% of CPI, so if housing is more than 21% of your income, CPI is a poor measure for wages.

          • DH 7.3.1.2.1

            Yes. They have been increasing it a bit Craig, the last one I think was in 2014 where the weighting was set at 24.23. But that’s also made up of both the cost of building a new house and cost of renting one. Rent by itself has a weighting of only 9.22.

            March CPI says rents have increased by only 23.3% since 2006. I can’t see how that reflects reality, I’d think real rents for the lower socio-economic groups in Auckland would have nearly doubled in that time.

            • Matthew Whitehead 7.3.1.2.1.1

              It likely reflects reality outside the urban centres where people go to compete in the job market.

              So that 23% will be a modest increase outside of the hot spots like Auckland, Wellington, and maybe Christchurch, with big increases in key areas in Auckland pulling the average up.

              • DH

                That’s from the CPI index Mathew; rents went from 1000 in June 2006 to 1233 in March 2016. The main cities of Auck, Wgtn and ChCh are given weightings which collectively make up 62% of the housing index, low population areas have a negligible influence on the CPI.

                I don’t know about Wgtn but Auck and ChCH have had pretty savage rent inflation since 2006. Post-quake ChCh rents pretty much doubled in a only few years as I recall, they’re falling back now but not by that much.

  8. Justice T. McGovern 8

    Wage increases aren’t affordable until managers and CEOs have their inflated packages dropped back to sustainable rates. Maybe 10x the salary of the average worker at the bottom…certainly not the 1000x BS they award themselves at the moment.

    THERE IS ENOUGH TO GO AROUND BUT ONLY WHEN WE REMOVE THE SOCIOPATHS AT THE TOP

    • Draco T Bastard 8.1

      Even 10x the average wage is too much.

      And then we also have to address the bludging shareholders and other owners who get income from doing nothing.

    • Richard McGrath 8.2

      That comment is simply stupid. A company has every right to pay its executives whatever salary it deems appropriate. Unless you are a shareholder in a particular company, the only motivation for wishing to forcibly control remuneration levels of that company’s executives is that common left-wing affliction: ENVY.

      • Stuart Munro 8.2.1

        By no means – CEO remuneration is out of control in many western countries – Asian corporates are more scrupulous. It is perfectly proper to cap CEO remuneration at the state level, though of course enforcing higher level progressive taxes at the extreme income level would be equally appropriate.

        • Richard McGrath 8.2.1.1

          So you advocate state control of the remuneration packages of private companies? CEO remuneration levels are not “out of control” in the sense that company boards still have control over them. However sometimes I do wonder how bad a CEO has to be to miss out on a bonus payment, and I would be asking questions of many boards, particularly those of some banks, if I was a shareholder. But because I don’t have shares in any banks or listed companies, it’s simply none of my business.

          • One Anonymous Bloke 8.2.1.1.1

            The ill-effects of too high a value of the GINI are well known, especially to the medical profession.

            That being so, there are plenty of reasons why governments have an interest in private salaries. If you weren’t so squealing about “state control”, you might be able to discuss it sensibly.

            • Richard McGrath 8.2.1.1.1.1

              “Squealing” about state control is important in terms of government respect (or violation) of private property rights.

              The hypotheses about income inequality and health effects are just that – hypotheses; and no-one (except perhaps the thoroughly incapacitated) is stuck forever at their current income level.

              • One Anonymous Bloke

                As you know damn well they are robust hypotheses supported by multiple lines of evidence.

                I note you failed to address the substance of my comment, viz: the government’s legitimate interest in the GINI.

  9. Colonial Viper 9

    This post does not differentiate between the small employers and private contractors in NZ, who more often than not are doing it tough themselves and are being squeezed in every direction by the very same large companies and corporations being complained about as paying too low wages to staff.

    Also I want to hear from those lefties who continue to advocate for keeping worker immigration into NZ at a high level.

    How does that position align with your issues around low wages and low availability of jobs. Again I think Winston has it right. Reduce immigration by 90%. It will help Auckland, and it will help Kiwi workers around NZ.

    • Tiger Mountain 9.1

      are you the resident contrarian here these days CV?

      workers and oppressed of the world unite and open borders is my ideal position, nation states have had their day; but bar refugees it is challenging to support aspirational immigrants needs alongside those of the discarded–Māori, Pacific and Pākehā working class

      having said that, some migrant workers are joining unions such as Etū and FIRST and playing a great role, this country is sparsely populated but capital has its foot on the countrys throat and a tax haven to boot and the challenge as always down the years is identifying the main enemy

      • Garibaldi 9.1.1

        “Open Borders” is only the ideal if no one wants to come here ! From what we are witnessing now we must bring the hammer down on immigration …. and that’s for multiple reasons.

        • Richard McGrath 9.1.1.1

          “Open borders” is fine, provided the welfare system is privatised, and immigrants make a commitment to assimilating into our communities.

          • One Anonymous Bloke 9.1.1.1.1

            Vandalising the welfare state some more will not produce the outcomes you pay lip service to. Haven’t you poisoned enough wells for one lifetime?

            • Richard McGrath 9.1.1.1.1.1

              The welfare state is an ever-expanding, totally inefficient blunt instrument. Private welfare agencies and friendly societies historically were far better at targeting the truly needy, and admin costs were a fraction of that of the public system. You seem to assume that nothing would replace the welfare state, were it abolished. Sorry, OAB, people are better than you give them credit for.

              • One Anonymous Bloke

                “Ever expanding”

                Bollocks.

                Lab5 kept government spending at the same percentage of GDP throughout their term. No, wait, you’re pretending that baby-boomer demographics (and the attendant rise in super) support your fatuous self-flattery? Too funny!

                historically were far better

                Yes, I know you believe that very hard.

                It’s time for your reality check.

      • Colonial Viper 9.1.2

        nation states have had their day

        But this has been the catch cry of the globalist bankers, neolib free traders and international capital for the last 30 years. They need to break down national identity and national pride in order to carry out their programme of economic globalisation and taking us all down to the lowest common denominator wages of Bangladesh and Vietnam.

        However, I think the ordinary people of England outside of London recently voted a quite different view.

        are you the resident contrarian here these days CV?

        Just the political mood I am in at the moment. Especially when I read self-delusional things like John Key is stuffed and wages are flat. And let’s do this and that and the other to avoid 1.5 (or 2.0) deg C warming.

        When in fact National are still in deadly fighting shape and Kiwi incomes have been severely deflating against housing and other basics of living for the last ten or fifteen years. If not longer.

        While we’re already 100% unavoidably committed to 3 deg C to 4 deg C warming within the next 30 years, and completing the 6th mass planetary extinction.

        But yes, Kiwibuild good, polls up 2% rah rah rah.

        • aj 9.1.2.1

          +1
          Too much rational thinking isn’t good for you 🙁
          Grandkids arriving in the last 15 months has really focussed my mind on the future which is bleak on so many fronts

  10. Stuart Munro 10

    While cheap workers are allowed in no NZ labour standard can endure. That’s why the righties want it, and that’s why it has to stop. The world is too large for a small country to take on the rights of all workers. We must help our own, and we can help a few others. The nation sate is the unit of political accountability – ours must be strong or the corporates will rape every resource we have – chiefly our people.

    • Richard McGrath 10.1

      Stuart, do you want to build a wall to keep the cheap labour out, as per Mr Trump?

      • Stuart Munro 10.1.1

        Certainly not – but neither do I wish to allow employers to source third nations workers en bloc. In fact any NZ employer with more than five unskilled employees had better employ some kiwis, or we may presume that prejudicial hiring practices are in force. Having lost one career (and many colleagues) to Russian slave workers I know how the casualisation of an industry proceeds, and that there is no net benefit to NZ.

        And, since you raise Trump, Trump himself preferentially employs unskilled foreign labour. He can abuse them more easily.

        • Richard McGrath 10.1.1.1

          Employing foreign workers is surely a form of private “foreign aid”, I thought readers here would be in favour of that.

          I’m all in favour of “prejudicial hiring practices” – I would be extremely prejudiced in hiring the most productive employees, regardless of any accident of birth.

          “Abuse” of foreign workers is surely reduced if their employment contract mitigates against said abuse. If they don’t have a contract, more fool them.

          • Stuart Munro 10.1.1.1.1

            Since the taxpayer picks up the tab for the abuse of foreign workers – and must also support local workers displaced by them, the most parsimonius arrangement is to discourage employers from the practice.

            There are no unskilled jobs kiwis cannot do, and even in skilled categories it is important to employ our own graduates. They need to be rid of their student loans, and their unique local understanding is valuable in their careers – if they get to have careers.

            • Richard McGrath 10.1.1.1.1.1

              Your slipping into Trump isolationism there, Stuart. Should we just close our borders?

              The taxpayer should not pick up the tab for abuse (by which I mean aggressive threats/use of physical force, coercion or fraud) of foreign workers – the abuser should be held responsible.

              • Stuart Munro

                No no no – but the globalising assumption upon which foreign workers have been increasingly allowed into NZ has proven to be false – they do not stimulate productivity or help the local economy at all – they often don’t pay tax, support local communities, or respect our environmental or employment laws. They destabilise local workers and produce a net skill loss across the industries they are allowed to permeate. They do support lazy employers and inferior employment practices however.

                As for foreign aid – pay it in cash – not in kiwi jobs thanks.

                • Richard McGrath

                  That cash is sucked up by corrupt overseas politicians. It should be stopped, or at least made a private matter for the individual to decide.

                  • Stuart Munro

                    Not only cash is subject to corruption – you probably know the Texas rice subsidy rort was ‘foreign aid’ for Korea, as were numerous other payments in kind. Materiale, microfinance, and APT technologies are probably better choices. But that’s getting a little off the subject.

                    The management of foreign labour recruitment needs to be regulated in the public interest. Current unprecedented volumes of permits suggest that it is no longer. Probably systematic neglect to enforce existing immigration laws – as was the case with slave fishing. It was never legal, but with government and industry collusion it continued for several decades.

                    A sample of a few thousand permits would rapidly establish the extent of official corruption.

  11. joe90 11

    Why are wages flat?

    Because the top end of town help themselves to an ever increasing share of the returns.

    //

    Over the last three decades, the LIS [labour income share] has fallen in most OECD countries as productivity growth has run ahead of growth in real wages. In the last decade or so, there is also evidence of sharper falls in the LIS in some countries, including the United States. This fall in the LIS has been attributed to a number of influences, including new technology, globalisation and reductions in worker bargaining power

    http://www.interest.co.nz/news/73904/new-productivity-commission-paper-shows-when-productivity-goes-wages-follow-labours

    • Bob 11.1

      “Over the last three decades, the LIS [labour income share] has fallen in most OECD countries as productivity growth has run ahead of growth in real wages”
      No shit, there has been this thing called “the internet” which has come along in that time!
      Think of how many sales staff The Warehouse might have, then think of Amazon. If you don’t need as many staff, your Labour Income Share is going to fall. Not saying wages don’t need to rise, just saying that LIS over 30 years is a redundant measure.

      • joe90 11.1.1

        Yeah, and that downward pressure on wages Isn’t actually downward pressure on wages.
        /

  12. maninthemiddle 12

    “Wage increases slowed to 1.5 percent in the year to June, and have now been below 2 percent for the last four years.”

    To the June quarter, NZ had annual inflation of 0.4%. So wages are growing almost 4x the rate of inflation.
    http://www.tradingeconomics.com/new-zealand/inflation-cpi

    • Paul 12.1

      Enter stage right, the defender of the elite.

      • maninthemiddle 12.1.1

        What elite? It is the working people of NZ who benefit. Compared the last Labour government, workers are paying less tax, lower interest rates, and have income increases far higher than the rate of inflation.

        • Paul 12.1.1.1

          I believe you also spend a lot of time on this site arguing for Charter schools.
          Another idea of the 0.01%

          • maninthemiddle 12.1.1.1.1

            The .01%? No. The children who benefit rom partnership schools are generally coming from poorer socio-economic backgrounds. Your opposition is elitist bs.

            • Paul 12.1.1.1.1.1

              zzzzzzzzzz

              • save nz

                @ Paul – remember many rich listers of 100 million don’t even earn enough to reach the top tax bracket! Their accountants probably qualify them for working for families… so of course getting a bit back for private schooling is important too, and even better Charter schools which give back to the founders of the Charter schools, while not providing any transparency or regulation for the kids. These pillars of the community are just helping the poor little poor kids and if it fails, then keeping the millions helps a bit too as well as dishing out millions to Natz cronies…

              • Richard McGrath

                Paul, I note you do not try to refute MiM’s statements, you merely switch off. Says a lot really.

                • One Anonymous Bloke

                  It says: “arguing with an illiterate innumerate who is convinced of his own infallibility is a waste of time”.

                  • Richard McGrath

                    OAB, that’s just a glib excuse for someone, whose argument is bettered by another person, to avoid conceding defeat.

                    • One Anonymous Bloke

                      A right bore, especially when you have to explain the difference between mean and median to them, rub their face in basic accounting practices and they’re still convinced they know what they’re talking about.

                      You’re welcome to imagine otherwise.

      • KJT 12.1.2

        Not “Elite”.

        SCUM is the word for those at the top of the wealth pyramid these days.

        Spivs, scammers, asset strippers, tax dodgers, white collar crims and millionare beneficiaries from the tax payers purse courtesy of our Government are not. The Elite.

        • Richard McGrath 12.1.2.1

          KJT, can a person be a high earner (say $1M+ per annum) and NOT be any of those variety of scoundrel you have listed?

          • One Anonymous Bloke 12.1.2.1.1

            More importantly, can a needle fit through the eye of a hedge fund manager?

          • KJT 12.1.2.1.2

            Yes, but genuine entrepreneurs, inventors and builders of assets, educators, the socially useful, founders of useful businesses, tend not to do as well as that, in New Zealand.

            Our laws favour burglars of the commons, not those that add value.

    • joe90 12.2

      Meanwhile, the LIS is whittled away by the thieves you defend.

      • maninthemiddle 12.2.1

        What does the Luxembourg Income Study have to do with anything?

        • joe90 12.2.1.1

          The Productivity Commission is based in Luxembourg, who knew?.

          • maninthemiddle 12.2.1.1.1

            Productivity is not necessarily the result of harder work, more likely the result of smarter work via technological investment.

            • Paul 12.2.1.1.1.1

              You are clearly trolling.

              • maninthemiddle

                You don’t believe that increased productivity comes from technological investment? I can explain the concept to you if you have time.

                • joe90

                  Technological investment or not, why the fall in LIS?.

                  • maninthemiddle

                    You’d need a lesson in the LIS. It is largely meaningless as a measure of wage growth. English schooled Robby on this in Parliament today…here have a watch..http://www.inthehouse.co.nz/video/44487

                    • joe90

                      Schooled him on what, how to steal off the taxpayer and get away with it?.

                    • maninthemiddle

                      “Schooled him on what…”

                      On what the LIS really is. And isn’t. A measure of wage growth it is not. Old Robbo is famous for cherry picking absurd measures and misrepresenting them. Today, like most days in Parliament, he got taught a lesson.

                • KJT

                  Usually technology from tax payer funded research.

                  Unfortunately the tax payers rarely get to benefit, as tax dodgers, owning private companies get the profits of public investment.

              • Richard McGrath

                “You are clearly trolling.”

                Rubbish, he is stating some fairly basic economics. More accurately, productivity advances are the result of technological advances + capital investment.

                • One Anonymous Bloke

                  Add the rule of law, relatively low inequality, universal free education and healthcare, and a decent social safety net, and you’ve really got it made, as all history demonstrates.

                  Compare with the effects of your funny ideas in say, Somalia. Small government equals paradise, eh.

                  • Richard McGrath

                    Oh dear, the Somalia chestnut. Sorry son, no rule of law there, very unlibertarian I’m afraid.

                    • One Anonymous Bloke

                      I ‘may’ have forgot to mention the role of government in technological advances and capital investment*. After all, you persistently oblige by doing so.

                      *on Earth, throughout history, as opposed to in theory, whilst paying lip service.

                      PS: in Somalia the rule of law was left up to the market.

                    • Richard McGrath

                      “PS: in Somalia the rule of law was left up to the market”

                      Rule of law is a government – not market – function.

            • Stuart Munro 12.2.1.1.1.2

              And since our productivity has been falling relative to our neighbours you’d be advocating that to this corrupt government? Or expressing your concerns to the irrelevant ministers? Nope – just trolling the Left.

              • maninthemiddle

                “And since our productivity has been falling relative to our neighbours…”

                Really? According to http://www.tradingeconomics.com/new-zealand/productivity our productivity is amongst the highest in the world, and has just slightly off it’s highest ever!

                • Stuart Munro

                  And are the comparison studies with Australia rebutted in detail by this assertion, or is it the usual macroeconomic fiction you peddle in lieu of results?

                  • Stuart Munro

                    Ah yes, it contains the usual elements of Gnat fraud – the fake unemployment rate, and job ads instead of actual jobs.

                    As a work of fiction it shows creativity – as a measure of governance it demonstrates unprecedented levels of deliberate and systematic falsehood.

                    • maninthemiddle

                      It’s independent economic analysis Stuart. Just because you don’t like it doesn’t make it false.

                  • maninthemiddle

                    What independent studies? When were they conducted? I’m quoting current data, from an independent economic analysis.

                    • Stuart Munro

                      It’s false because it contains false premises.

                      Even a thicket like you ought to know garbage in, garbage out. No robust peer review in economics of course – lying assholes are the order of the day.

                      These numbers are nonsense – and any conclusions drawn from them are at best nonsense. Most likely however the rubbish numbers were used with the deliberate intent to deceive credulous less educated folk like Herald journalists – who may be fooled and thus not understand the widespread popular resentment of a government that consistently fails to perform in real terms. However good they can be made to look on paper by lying filth like MiM.

                    • maninthemiddle

                      “These numbers are nonsense…”

                      Really? Independently corroborated financial data, published by independent economic analysts? Ok, go on, provide an example with supporting evidence.

                    • Stuart Munro

                      Not merely lies but fatuous lies.

                      The inclusion of job ads immediatly tells us the numbers are not robust. Unemployment listed in your link as 5.2% – altered from 5.7 (which also massively understated it) http://thedailyblog.co.nz/2016/07/06/lies-damned-lies-and-statistical-lies-update/

                      The real unemployment rate is substantially higher – it is deliberately misrepresented to create the false image of a ‘rockstar economy’ that is not justified.

                      Even a corrupted flunkey such as yourself knows enough economics to recognise that the turn in the NZ economy out of productive sectors into real estate is profoundly negative in terms of productivity. But at the height of this property bubble you produce figures massaged to suggest that productivity has miraculously increased.

                      Funny. Tragic. Corrupt.

                    • Stuart Munro

                      http://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV

                      Follow NZ’s and Australia’s labour productivity – ours is consistently lower. Well below Australia – half that of Scandanavian countries.

                      Fudging your numbers won’t fix that – you’d need to have a set of policies that worked.

                      People at the bottom of the economy know your failures intimately – they deal with the consequences daily. This is why healthy democracies are so much more economically efficient than oligarchial arrangements – elites never want to think or act in the long term best interests of the public.

                    • maninthemiddle

                      “The real unemployment rate is substantially higher – it is deliberately misrepresented to create the false image of a ‘rockstar economy’ that is not justified.”

                      Oh no, not conspiracy theories now. Tin foil hat anyone?

                    • maninthemiddle

                      “Follow NZ’s and Australia’s labour productivity – ours is consistently lower. ”

                      Wrong. http://www.tradingeconomics.com/new-zealand/productivity

                    • Stuart Munro

                      I think we have established that “tradingeconomics” is a fallacious source.

                    • maninthemiddle

                      “I think we have established that “tradingeconomics” is a fallacious source.”

                      I think we’ve established you are incredibly ignorant, and dismiss an independent economic analysis because it doesn;t suit your false narrative.

    • UncookedSelachimorpha 12.3

      @Man in the Muddle

      Housing and utilities make up less than 25% of the CPI you quote. But I know people who have to spend more than 50% of their income on housing.

      Average housing costs increased by 3.3% in the same period – over 8 times the 0.4% wage increase. A truly Brighter Future for all.

      Unlike some of the things that declined in the CPI (e.g. domestic airfares), housing isn’t something you can just “cut back on” for many people – they are already living in overcrowded cold damp conditions, with the only next step, moving the family into their car.

      • Paul 12.3.1

        I think we should all ignore this troll.
        Quite an unpleasant variety, having seen the Charter school thread.

        • maninthemiddle 12.3.1.1

          Another dickhead who thinks labelling someone a troll is an effective way to silence debate.

      • maninthemiddle 12.3.2

        “Housing and utilities make up less than 25% of the CPI you quote. But I know people who have to spend more than 50% of their income on housing.”

        That’s their decision. No-one is forced to live in any particular part of NZ.

        “Average housing costs increased by 3.3% in the same period – over 8 times the 0.4% wage increase.”

        What 0.4%? Your’e getting mixed up with the inflation rate. Wages have grown by just under 2%. What’s more, housing costs have been increasing for decades, but at least under this government we have low interest rates. Under Labour house prices rocketed AND we had high interest rates.

        • Stuart Munro 12.3.2.1

          Absolutely desperate!

          What government policy produced lower interest rates?

          None – they fell in response to the GFC and have not recovered. But claim the credit why don’t you – nothing this government has actually done will win you any.

          • Nic the NZer 12.3.2.1.1

            Interest rates are largely under the control of New Zealands central bank the RBNZ. To observe this fact you just need to look as far as the RBNZ official cash rate statistics. The RBNZ is of course part of the govt so yes the govt does significantly influence interest rates. What happened is following the GFC the RBNZ (like many central banks) allowed market bank interest rates to fall to encourage lending.

            If they wanted they could put them back up (though that might cause a lot of defaults when higher rates are passed on). Alternatively they could have lowered them at any time to begin with or still could lower them further (even below zero).

            A simple mental model for how this works is the central bank decides what it wants rates to be, charges that to retail banks, and they add their own margin to that rate and on lend to the public.

          • maninthemiddle 12.3.2.1.2

            “What government policy produced lower interest rates? None – they fell in response to the GFC and have not recovered. ”

            Interest rates remain low for a number of reasons, but at least in part because the government has spending under control, and is delivering growth without cost pressures. Government policies directly impact interest rates, because they impact the wider economy, which in turn drives RB decisions around the OCR. Labour’s hopeless spending and inability to contain internal cost pressures saw mortgage rates more than double what they are today.

            • Muttonbird 12.3.2.1.2.1

              Interest rates remain low for a number of reasons, but at least in part because the government has spending under control underinvested in social services and infrastructure, and is delivering importing growth without cost pressures using corrupt money and cheap student labour.

              Fify.

              • maninthemiddle

                The government is spending more in social services than any previous government. Ever. Likewise infrastructure. You’re proving to be awfully good at making shit up though.

                • Muttonbird

                  Yet they are still underinvesting. Hard to believe, isn’t it?

                  • maninthemiddle

                    Exactly. I guess you could accuse any government of underinvesting no matter ow much they spend.

                • Stuart Munro

                  Yes – pissing it away on drug tests and P house decontamination while kicking needy folk off benefits and keeping a quarter of a million foreigners here doing our jobs.

                  Traitor is too light a term for them, and you – you loathsome apologist – barefaced liar and servant of of the dishonesty that derrogates the government we own and pay for: there is no punishment adequate to your crimes against our people.

                  • maninthemiddle

                    Drugs are a real problem Stuart. When state house tenants contaminate houses with P it is a scourge we all pay for. And no-one is being ‘kicked off’ a benefit. People are finding jobs, setting up businesses. Surely you don’t think it is healthy to pay able bodied people to do nothing?

                    • Stuart Munro

                      No they are not MiM – their lives are being fucked MiM – Winz workers are being shot and Gnat electorate offices torched and suicides ARE through the roof because people are losing the means to live.

                      State houses were not P contaminated – this was the usual corrupt Gnat rort – rather like the 1080 rort. It was used to remove families from an asset that could be sold to Gnat accomplices. Which is why both health academics and the tenancy tribunals criticised and found against these practices.

                      People are not finding jobs – jobs are controlled predominantly now by foreign based recruiting companies with no commitment to local people – these bring in third nations workers en bloc – many of whom are exploited from their own countries before they even start.

                      People are being kicked off benefits with great frequency – Including cancer sufferers and other people with long term conditions that are not subject to spontaneous remission.

                      “It is a scourge we all pay for” As a tax-evading far-righty chances are that you are not paying for anything of the kind.

                      You lie and lie and lie and lie and lie.

                    • UncookedSelachimorpha

                      People are absolutely being kicked off benefits, by means fair or foul. I know plenty of people in that situation.

                    • maninthemiddle

                      ” their lives are being fucked MiM…”

                      By drugs.

                      “State houses were not P contaminated”

                      Well you’d better take that up with Phil Twyford.

                      “Methamphetamine (P) contamination has forced more than 400 tenants from their Housing New Zealand (HNZ) homes in the last year.

                      About 403 properties were vacant because of P contamination across the country, Labour Party housing spokesman Phil Twyford said. This represents 0.6 per cent of the state houses.”

                      http://www.stuff.co.nz/business/81265274/meth-contamination-forces-south-canterbury-state-housing-tenants-out-of-homes

                    • maninthemiddle

                      “People are absolutely being kicked off benefits, by means fair or foul. I know plenty of people in that situation.”

                      Cite an example. A verified media report of someone who has had a benefit permanently cancelled for other than legitimate reasons.

                  • Richard McGrath

                    “Our jobs” – yeah right. Are you saying an employer in NZ should only be able to employ another NZer, even if someone else – a “foreigner” – is willing to work for less and is more productive?

                    • One Anonymous Bloke

                      Do you understand why the Commerce Commission prosecutes predatory pricing? The principles involved?

                      If you get that far, do you understand the analogy I’m making: comparing you to a crooked lawyer giving bent advice?

                • Macro

                  “The government is spending more in social services than any previous government”
                  In dollar terms that may be so (in fact in many instances its the same amount as previous years) – In real terms and in actually meeting the increasing needs of those social services, that is an out right lie – and you know it!
                  As for the massive spending on “roads of national significance” the less said about this pork barrelling the better.
                  Of course a chch earthquake and climate change disaster relief has nothing to do with the need for additional spending on infrastructure – but why don’t you claim it as great Govt policy. Goes with all the other bullshit you spout here.

                  • maninthemiddle

                    “In real terms and in actually meeting the increasing needs of those social services, that is an out right lie”

                    No, it is fact. There is more access to social welfare today than ever before, but there is accountability. As there should be.

                    • Macro

                      ” There is more access to social welfare today than ever before, ”
                      LOL In your dreams!

                    • One Anonymous Bloke

                      accountability

                      The stupid! It burns!

                      If everyone were ‘accountable’ we’d have no need for a police force, let alone a welfare state.

                      Are you trying to validate Hodson & Busseri or something?

                    • maninthemiddle

                      “If everyone were ‘accountable’ we’d have no need for a police force, let alone a welfare state.”

                      The Police are there to help to hold people accountable. You do get confused sometimes.

            • Stuart Munro 12.3.2.1.2.2

              No relation to global interest rates then? LIAR!

              Explain too the incompetence surcharge that keeps NZ interest rates consistently 1-1.5% above international norms.

              Disingenuous piece of shit.

              • maninthemiddle

                “No relation to global interest rates then?”
                Minimal. Global interest rates impact our exchange rate, but have minimal impact on local interest rates, which are more sensitive to the factors I mentioned above.

                I’m not sure what you mean by the ‘incompetence surcharge’. The Australian/NZ banks are remarkably robust by international standards, one of the reasons the NZ economy recovered so well from the GFC.

                • Stuart Munro

                  Ah yes – no doubt you imagine imposing a deadweight cost on interest advantages New Zealanders – or more likely it can be made to make the macroeconomics look good inspite of the lousy outcomes it produces in the local economy.

                  • maninthemiddle

                    Neither. NZ is a very small economy, that is enjoying a period of stable growth due, in large part, to government policies.

                    • Stuart Munro

                      Laughable crap.

                      NZ is a very small economy shrinking due to the gross mismanagement of a corrupt and inept troupe of unscrupulous assholes.

                    • maninthemiddle

                      “NZ is a very small economy shrinking due to the gross mismanagement of a corrupt and inept troupe of unscrupulous assholes.”

                      Stuart you are unhinged. The NZ economy is growing, as all independent indicators show. Employment is up, inflation and interest rates are low. It takes a special type of delusion to miss this.

                    • Stuart Munro

                      Look, you are clearly irredeeemably stupid – and you have a perfect right to live in this neo-liberal fantasy if that makes you happy. Run off and play with your fellow travellers at Trump or Palin fan clubs, blog with the Whale if that’s your thing.

                      But spare us your vacuous lies. Real numbers only thank you – and forget defending this government – they have never even tried to do an honest job. If Frank & his military shot them all tomorrow he’d get no argument from me.

                      Stealing public assets
                      Lying to their employers, The NZ people
                      Wasting money on flags and sheep and corrupt deals

                      This is not the behaviour of a democratic government.

                    • maninthemiddle

                      “Real numbers only thank you…”

                      That’s what I’ve given you. From independent sources. You seem to live in a parallel universe from the rest of the country. Every three years the country goes to the polls and for the past three elections they have elected governments that have followed policies that you decry. That’s democracy.

            • Nic the NZer 12.3.2.1.2.3

              Don’t think this analysis is convincing either. If the govt spends more then this creates additional funds in the interbank accounts. A surplus of funds there will likely see banks lending to each other the surplus at a falling 90-day rate. If the govt spends more it will likely see interest rates fall not rise (or the RBNZ working harder to keep rates up).

        • UncookedSelachimorpha 12.3.2.2

          Sorry you are right about the 0.4%, my mistake.

          So housing costs have increased by more than double wage growth – still not a very Brighter Future I think.

          Your revealing comment

          “That’s their decision. No-one is forced to live in any particular part of NZ”

          barely warrants a reply, but I will say the need to spend a large proportion of income also applies in low-cost localities, not just Auckland. e.g. where I am houses can be rented for $240 /week, but many people here can only find very low paid part-time work, making $240 easily over 50% of their after-tax income, including combined incomes for couples.

          • Muttonbird 12.3.2.2.1

            Your revealing comment

            “That’s their decision. No-one is forced to live in any particular part of NZ”

            barely warrants a reply.

            This. This is the position held by the socially irresponsible and community breaking right. You wouldn’t believe it until they utter it. They are unable to comprehend the lives of the disenfranchised, the vulnerable, and those who find it impossible to live in the unforgiving world which we are forced to live in.

            Their answer to finding life difficult? Just move!

            The result is a constant (un)merry-go-round of unstable and transient communities.

            • Colonial Viper 12.3.2.2.1.1

              How are the 20,000 to 30,000 immigrants turning up in Auckland annually, plus thousands from around NZ every year, have home community in Auckland?

              They left their home communities to go to Auckland!!!

            • maninthemiddle 12.3.2.2.1.2

              “Their answer to finding life difficult? Just move!”

              Yep. If that;s the best option. People have been doing that for centuries. Stop being so precious.

            • Richard McGrath 12.3.2.2.1.3

              “Their answer to finding life difficult? Just move!”

              Yes, just move. Mobility is so much easier than it used to be. I now have a 12 hour commute once every six to ten weeks to work on the far side of Australia. It can be done.

          • maninthemiddle 12.3.2.2.2

            House prices have risen by less than half under this government than they did under the last, and real wages have risen more. Were you making this much noise then?

  13. Pat 13

    why are wages flat (or falling in some countries)?…. because the additional funds sloshing around are not being invested in the productive economy , merely fuelling speculative asset inflation instead of promoting the increased production/consumption as intended.

    if you are concerned about the impact of growth on CC that may be a blessing in disguise.

  14. Dale 14

    NZ employers have it pretty good,no time and a half for over time,no expectation of a yearly inflation increase and a whole bunch of immigrants to employ.
    In NZ I went without a pay rise for 2 years had OT rates cut completely,all of us did that worked for the medium sized company we worked for.
    So now in Perth Im getting $7 an hour more,work 38 hrs a week and OT rates if I do extra.
    WA is in a massive downturn because of falling iron ore prices,but working conditions are still very good.
    So that situation can be used as an argument to support Labours claim
    Labour has made good progress with the housing crisis,now use wage rates and working conditions to bolster your position.
    The workers are the votes that win elections. We are the missing million.

  15. save nz 15

    Wages are flat because of ideology of Rogernomics and globalism. Neoliberalism has not worked for most – inequality is increasing.

    In NZ flat wages have meant Kiwi talent has left and those that return just for the most part coast along on a fraction of the wages they would receive if they lived in Europe or the US.

    The low wages have affected the Kiwi ability to push ahead, when people are paid so little and spend their weekends painting their own house, panel beating their own car, or taking additional work to save money and get by – which as well as exhausting the workers of NZ it also means that many jobs are taken out of the economy as people just do them themselves.

    Instead of innovating, workers just coast along. Nobody is paid well apart from the CEO’s or select government cronies – there is no trickle down, in real terms.

    Not only that, why have much loyalty if you know your job might be ended at any time, with little or zero compensation?

    In Auckland buying a house in the last 10 years will give you more security and income, than working for an employer. In fact many people only work so they can get a mortgage so they can buy a house to earn them enough money to save for retirement. It is a surer bet. That is sad but true.

    When people are beaten down they lack energy if they are treated as a commodity within the workplace, (i.e. banks, record profits and enormous CEO salaries but tellers are paid poorly and losing their jobs at the same time).

    Friends I know recruited many talented people, but sadly the NZ low wages meant they could just not retain them for very long. So why bother training up a lot of talent if they will leave the team and managers do not bother trying to fight for them to stay because they will not increase wages at the level anyone else would due to bogus pay scales totally out of touch with the cost of living or overseas rates in the West?

    In the long term the company itself loses in every way, they have someone they trained who is talented and leaves which would aid their competitors, they waste money on recruitment which could have been better spent on wages to retain talent, and they waste money constantly training people as well as disillusioning the people who hire, mentor and train them if it keeps happening.

    Not only that, the insecure work environment in NZ, has mean’t that managers can not make decisions at all – because they fear that if things go wrong they will lose their job – so they just pass the ball around to others who also can not make decisions and nothing gets done. Then finally they are forced to, and just flap around and do any old thing, just to be seen to be doing something when the pressure finally comes down. Generally this is the wrong decision – but most people can’t even work out that either.

    It is crazy how many workers in NZ either have little power to make a decision OR can’t make a decision to save themselves in case it comes back to them and they lose their job or promotion.

    Then the can do people become unfairly targeted while the do nothing people are promoted as being ‘a safe pair of hands’ – which is most cases means going to endless meetings and not making any sort of decision on anything.

    And that explains why although individually Kiwis are talented they are not doing well in their home countries – they do better abroad. There is just little understanding of employee talent in NZ.

    Globalism and the idea you can just recruit overseas people cheaper is making things easier for sub par NZ managers and executive teams, who like National, are cheap arses, getting the cheaper quote – (or worker) even if they can’t deliver a thing and it is a risky approach and long term not only much more expensive, but also cannibalises the locals (youth in particular) who become a generation of lost talent.

    It also means employees do not get the opportunities they need to foster their talents and over a generation will not be able to pay for social security for the Nation, which will run out real soon with the amount of middle and older migrants coming our way and able to retire and need health care here.

    • RedLogix 15.1

      And that explains why although individually Kiwis are talented they are not doing well in their home countries – they do better abroad. There is just little understanding of employee talent in NZ.

      Absolutely one of the best comments I’ve ever read on TS. Completely 100% nails why I moved to Australia and wish I had done so 10 years earlier.

      Certainly I’m not holding up Aus as an exemplar of employment virtue … but it does shows up NZ as the workplace hell-hole it is.

      • Draco T Bastard 15.1.1

        …but it does shows up NZ as the workplace hell-hole it is.

        Yep, our managers are pretty much useless and greedy but they spend too much time patting themselves and each other on the back and complaining about NZ workers to realise that they’re the problem.

    • Draco T Bastard 15.2

      Nobody is paid well apart from the CEO’s or select government cronies – there is no trickle down, in real terms.

      There was never supposed to be. All the policies for the last thirty years have been about making the rich richer rather than making life and society better for everyone. This has been done because of a) the delusional belief that we need rich people to pay for things and b) because the politicians are either owned by the rich or are rich themselves.

      If you took the multi-million dollar salaries of CEOs and dropped them to something reasonable, say $100k, then you’d probably find that you could increase wages for everyone else in the company by about $1000 per year or more. And that’s just the CEOs. If you did the same to over paid middle-management then you could increase lower paid workers wages by even more. And the wage bill wouldn’t change.

      Take out the shareholders and things would be even better for the workers.

      The economy really is a zero sum game and if you give too much to a few then the rest must have less.

      • save nz 15.2.1

        The highest paid should only earn up to 20 times more than the lowest waged. There is the incentive for everyone to work towards common goals and benefits. Under neoliberalism there is a failure of wage equity and it is world wide. Fairness has gone. As for shareholders and using that as a way for the company to be ransacked for profits and tax avoidance, it should be made illegal. The Philip Green case in the UK of him raking in “incredible wealth” and paying little tax. He sold BHS for £1 last year to Dominic Chappell, a triple bankrupt with no retail experience putting the company into administration with jobs at risk. Some 22,000 retired staff face income cuts after “Sir” Philip let the pension fund go from surplus to a £571million deficit.

        Classic robbing of the poor to give to the rich and we have our own versions a plenty.

        • Draco T Bastard 15.2.1.1

          The highest paid should only earn up to 20 times more than the lowest waged.

          20 times is far too much. I tend to think more like 3 to 5 times as much but, then, I also think that all businesses should be cooperatives where everyone working there has a say in how everyone else is getting paid. Then you get stuff like this:

          • Richard McGrath 15.2.1.1.1

            I like the sound of co-operatives, but your comment on limiting the highest paid to 3-5x the lowest waged is ridiculous. When I did newspaper delivery work as a 13 year old, my father earned about 30x my hourly rate.

            I am now earning about 12x the minimum wage, and there are lots of people earning more than me. Do I envy them? Not really, as there is generally an associated increase in responsibility and stress level to match the income.

            • TheExtremist 15.2.1.1.1.1

              You’re on 180 per hour? Are you a lawyer or something?

              • Richard McGrath

                No, I’m a doctor. Wages are high where I work in Australia, but a few years back doctors took a 30% pay cut.

            • Draco T Bastard 15.2.1.1.1.2

              but your comment on limiting the highest paid to 3-5x the lowest waged is ridiculous.

              No it’s not because we really can’t afford high paid people. For starters the more that a few get paid the less that everyone else gets and then there’s how much of our resources can be used sustainably year on year.

              In other words, there’s limits that we have to stay within.

              • Richard McGrath

                “we really can’t afford high paid people.”

                Pay peanuts, get monkeys. If someone’s productivity and innovation is worth 100x the minimum wage, then it is in everyone’s interests for them to be paid that. A private sector employer is likely to do that in order to retain them as an employee (or contractor).

                • Draco T Bastard

                  If someone’s productivity and innovation is worth 100x the minimum wage, then it is in everyone’s interests for them to be paid that.

                  It’s physically impossible for that to be true.

    • UncookedSelachimorpha 15.3

      Completely agree with SaveNZ @15, I’ve seen all this too.

  16. Dale 16

    Save ,our wages and conditions are what they are because of weak government. Both left and right.
    The next government will only win if they improve workers rights and conditions. Mark my words!

  17. save nz 17

    I lived overseas in the early 1990’s and the early 2000’s and both times it made me realise how brainwashed I had been by Rogernomics here in NZ. As a Gen Xer I was bought up to believe workers should be made redundant to save costs for the company – it was workers fault – concepts that were disrupted by working and living in Europe and their (at that time) more socialist approach.

    There were no jobs in NZ in the 1990’s for school leavers, but I still had this brainwashed idea pummelled into me that efficiency was key and productivity was about making workers work harder or for less to save money. That was the start of not giving young people a go. That was the year of student fees and the start of the cannibalisation of youth here. When I did get to university I have interest of 11% compounding daily on my student loan.

    Many people I know, have never had a secure job and only even lived off contracts.

    But bizarrely the indoctrination is so thorough to this day that if I do need someone to work for me, I only ever hire people on contract. I am frightened to hire people permanently in case (as the media is constantly pointing out), they have an accident or I get embroiled in litigation.

    That is why it is so hard to get traction for workers rights. Whole generations are actually indoctrinated against it.

    Neoliberalism has been so successful in NZ because we are isolated and a small population, it has become easier to brainwash and ram through concepts that don’t work or make sense. But people are taught to be frightened of any change or alternative in the political landscape and the internationally owned media acts as some sort of propaganda mechanism to regulate neoliberal news for the masses.

    That worry of hiring people is also why NZ has such low productivity and innovation. When you have been taught to be scared of hiring people for 30 years, how can you grow a company?

    Not only that, if you start to grow a company, a more established company often steps in and steals the ideas and uses their power to drive others out of business.

    And now we have to compete with international companies that may cut corners or not even pay workers minimum wages or not even have to pay NZ taxes. It is not an even playing field or free market, far from it.

    Kiwis have been taught to cruise or struggle along, and the goal of home buying is crucial, in the absence of a real chance of rewarding and well paid career. Now for many, there is not even that option.

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