Strike while the iron is hot

As it is April, every single worker in New Zealand is now worse off, because if it hadn’t been for the change of government, we all would have had a tax cut this week. And this wasn’t just ‘tax cuts for the rich’. This was tax cuts for everyone.

But, never fear. Workers are taking matters into their own hands. And it is, once again, the new government that is making it possible.

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 Nurses. Train and bus drivers. Port workers. Silver Fern Farms workers. Supermarket distribution workers. Fast food workers. Disability support workers. Fletcher Building workers. In the last year, all of these groups have either threatened to go on strike, or walked off the job altogether. Later this year, they may be joined by teachers.

It has long been acknowledged that New Zealand wages and salaries are low, relative to other OECD countries. And it appears that workers, particularly organised workers, have had enough.

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Here’s a clue: organised. Does that mean belonging to a union? Why, yes. Damn right it does!

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Unionist Morgan Godfery said while he doesn’t believe there are more strikes than usual happening at the moment, “union members who are striking are being more assertive”.

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No more strikes than usual? Five port strikes in the last six months and NONE in the previous nine years. Who has been drinking the Kool-Aid now?

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Nurses recently rejected a pay rise offer of 2%, plus a $1050 lump sum, in what is likely to be the most high profile industrial action of the year. Nurses say they have two reasons to reject the offer. They say they aren’t paid enough, and that hospitals are understaffed. It’s fair to assume better pay for a difficult job would in time solve the understaffing problem too. Freya Head, both a working nurse and a member of the union’s negotiating team, says this current dispute has been a decade in the making.

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While I probably have more sympathy with nurses than with any of the other striking workers, here is another clue. The dispute has been “a decade in the making.” When were Labour last in government? Oh, yes. That’s right. In 2008. A decade ago.

It is no coincidence that there are more strikes, or threats of strikes, now that Labour are back. Labour are the party of the unions, who are now flexing their muscles to go into battle.

But the trouble is that this government (surprise, surprise) is going about things completely the wrong way.

Tax cuts put extra money in the pockets of all workers. Yes, it puts extra money in the pockets of those ‘rich pricks’ who earn over $200,000 a year. But it also puts more money in the pockets of workers who earn $40,000 a year. The difference, proportionally speaking, is, of course, massive. That opportunity is now gone.

Instead, we have a promise to increase the minimum wage to $20 per hour over the next three years, which will make some jobs, particularly entry-level positions and jobs of a menial nature, uneconomic. Employers will disestablish at least some of these positions. Some of them will be automated. But, there is little doubt that, at $20 per hour, there will be fewer opportunities for people with little or no training.

And what happens to the person earning $21 per hour once the minimum wage reaches $20? You guessed it. They put their hands out for more money. Understandably so. And this will put employers under even more pressure.

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The new government has made both moves and noises in favour of unions. Labour has resurrected a bill that would strengthen protections for Labour hire workers, they’re starting a programme of bumping up the minimum wage, have made changes to the 90 day trial law, and are looking to strengthen collective bargaining. Finance Minister Grant Robertson has also made non-committal expressions of support for nurses and teachers getting a pay rise, though earlier this week Jacinda Ardern refused to take an explicit position on whether nurses are underpaid.

Kim Campbell said his organisation wouldn’t advocate for those positions, but employers would simply have to accept some of them.

“We’re not going to sit there and say no to everything, but certainly we’re sounding a cautionary note on the whole lot together, because New Zealand could become uncompetitive again.”

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And that is the danger. The ‘rock star economy’ will turn into a rock in five minutes flat.

There is no doubt that unions have scented blood with their new government. But, the chances are that this will be disastrous for workers. Unions are a dinosaur of days gone by. They can strike all they like, but all that will do is to reduce the tolerance of the public, both with the unions themselves and with the government. And no union is ever happy with what they get. Even if they agree on a deal, they’ll be back a year later for more. We all know how this works out.

Interestingly, wages are increasing in areas where demand is strong. Just look at engineering, construction and all trades. That is market forces at work. Supply and demand. Economics 101.

So, those who can will get paid more. And those who can’t will strike.

Look out for another winter of discontent. Just what this government needs.

-Spinoff


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

To read my previous articles click on my name in blue.

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