Monday, 24 April 2017

“Better Late Than Never, Jim!” – Bolger On The State Of The Unions.

Second Thoughts: It speaks well for Jim Bolger that he now recognises, albeit very belatedly, that the Employment Contracts Act, one of the key pillars of the neoliberal order which his government consolidated, has contributed hugely to the growth of inequality in New Zealand .
 
JIM BOLGER’S IMPLIED CRITICISM of his own government’s assault on organised labour is astonishing. The Employment Contracts Act 1991 ranks as one of the most extreme examples of anti-union legislation in post-war history. Certainly, the equivalent statutes enacted in the USA, the UK, Canada and Australia pale in comparison. From the legislation introduced by Jim Bolger’s close friend and ally, Bill Birch, even the word “union” was excluded.
 
Nor should it be forgotten that Jim Bolger had “form” in the union-busting business. As Minister of Labour in Rob Muldoon’s government he had, in 1983, been responsible for legislating compulsory unionism out of existence.
 
It was the catastrophic impact of Bolger’s legislation on union membership numbers that made the Federation of Labour (FoL) so biddable in the first flush of Rogernomics. New Zealand’s trade union leaders were willing to swallow just about anything from the Fourth Labour Government – in return for the restoration of compulsory union membership.
 
Labour obliged, but Stan Rodger, David Lange’s Minister of Labour, let it be known that this would be the last time that the political wing of the labour movement rode to the rescue of the industrial wing. The union movement, Rodger sternly insisted, must learn to stand on its own feet without the assistance of the unqualified preference clause.
 
To assist the unions, Rodger introduced the Labour Relations Act. The new legislation, in an attempt to make the typical New Zealand trade union bigger and better, mandated a membership base of 1,000, offered assistance for union amalgamations and encouraged the evolution of industry bargaining. Rodger also made it clear that the Labour Government expected the public and private sector unions to come together in a single peak organisation – the NZ Council of Trade Unions.
 
Rodger’s reforms sent a clear signal to Bolger and Birch that a future National government’s industrial relations legislation would not automatically be repealed by the next Labour government. They took this as a green light for a root-and-branch reform of the New Zealand labour market. With the assistance of the Business Roundtable, Birch and his advisers began drafting the legislation that would become the Employment Relations Act 1991.
 
In his interview with RNZ’s Guyon Espiner, Bolger volunteers the observation that the unions have become too weak. On the face of it, this is an extremely odd observation. After all, Bolger was well-aware of what would happen to union density in New Zealand the moment the prop of compulsory membership was removed. The experience of 1983-84 was there for all to see. The abolition of standard, occupation-wide contracts (known then as “awards”) applicable to everyone employed to do the same work, was similarly guaranteed to knock the stuffing out of the union movement. How could Bolger possibly entertain the notion that the Employment Contracts Act would not, in very short order, transform the union lions into lambs?
 
Possibly because the leadership of the NZCTU had reassured him that the reformed union movement: bigger and better resourced than ever before; was more than capable of weathering his storm.
 
I have been told by a former trade union leader that the President of the CTU in 1991, Ken Douglas, was convinced that the changes enshrined in the Employment Contracts Act would not cause a precipitate collapse in union density, and that employers would be amenable to the continuation of industry-wide bargaining and agreements. On the basis of Bolger’s recent remarks, it seems likely that Douglas conveyed this confidence to the newly-elected National Government. Certainly, it would explain why the Bolger Government felt able to introduce legislative measures which, in other jurisdictions (like France!) would have been met with massive resistance – up to and including a General Strike.
 
It is, of course, a matter of history that Ken Douglas and his allies in the public sector unions refused point-blank to support the private sector unions’ call for massive resistance. Not even the outpouring of tens-of-thousands of workers onto the streets in the early months of 1991 and the passing of multiple rank-and-file resolutions in favour of a General Strike, were enough to shake the opposition of Douglas and the public sector union bosses. At a special executive meeting of the CTU on 18 April 1991, a motion calling for a one day General Strike was defeated 190,910 to 250,122.
 
As things turned out, the grim misgivings of the rank-and-file and the private sector union leaders proved to be correct, and Douglas’s belief that the new, improved union movement could handle anything the Nats threw at it was shown to be entirely unjustified. In just a few years union density (the percentage of the workforce belonging to a trade union) fell by more than half.
 
The fate of private sector workers over the past quarter-century has been especially hard. Union density in the private sector has fallen from just under 50 percent in 1990 to less than 10 percent in 2017. The cost, in terms of worsening working conditions and stagnant real wages, is plain for all to see.
 
If they were, in fact, given, any reassurances from Douglas concerning the unions’ long-term resilience have proved to be spectacularly misconceived. Their expression would, however, provide some sort of explanation as to why, twenty-six years on, the former National prime minister expresses surprise that New Zealand’s trade unions have become so weak. At the time, Bolger (who has always struck me as a fundamentally decent person) may have consoled himself that the Employment Contracts Act’s bark would be worse than its bite. It speaks well of the man that he now recognises that the signature legislation of his premiership has contributed hugely to the growth of inequality in New Zealand.
 
This essay was originally posted on The Daily Blog of Saturday, 22 April 2017.

11 comments:

Anthony Rimell said...

I was a Union Organiser in the dark days of the ECA. It stunned me and many others I worked with (union members and staff) that the then leadership thought a General strike might make things worse. The CTU leaders were sincere, committed people: but they were as wrong as anyone can be.

So, yes: it is a poignant moment to read of Jim Bolger's regrets around this.

Of course, Sir Bill's equally swift counter to his friend's comments so soon after the interview reminds us that there was a reason Douglas et al had their fears. But no matter: we were wrong then not to fight for our beliefs. It's why we must ensure unions regain their strength - and why I celebrate the victory by Kristine Bartlett and her colleagues and their unions in the recent Pay Equity case.

peter petterson said...

Lost my comments, have to remember what I just wrote. I was affected by the ECA in 1991 - I had my job at South Pacific Tyres virtually sold under me. I was a union delegate and their first target - get rid of Petterson would have been the call. With me gone they had a free hand to do their reorganisation. I will do a post on my new blog, Petes New Writeplace.blogspot.com. The intent of the ECA was to emasculate the union movement - destroy its power and influence, and reduce real wages. Both were achieved! The public service unions laid down and died! The private sector unions were left on their own, and right through the industries union delegates were targetted and made redundant or dismissed. As I said above, I was one of them. Douglas proved a turncoat and a city councillor in Porirua in years to come..

peter petterson said...

They laid down and died! Sincere and committed...not as it was proven. Read my post in days TO COME!

pat said...

I remember it well....just as politicians are detached and unaware of the thoughts of 'the average working man', so was the union leadership...in such typical circumstance do misjudgements occur.

peter petterson said...

http://petesnewwriteplace.blogspot.co.nz/2017/04/employment-contracts-act-1991-aftermath.html

Anonymous said...

I was always under the impression that the ECA was partly National's payback for what the Fourth Labour Government had done to farmers (you screw over our rank and file? We'll screw over yours).

Guerilla Surgeon said...

I remember doing a paper on government/bureaucracy – can't remember the title, but it was run by Pat Kelly I think he was a local regional counsellor or something – and I got a bit cheeky doing the assignments, of which there were 5! I used to ring up government departments and ask them stuff. I just identify myself as a student, not mentioning I was pretty old, and ask for someone whose job it was to explain things to the public. I remember ringing up that government department that oversees all the government departments, whose name I forget right now and I can't be bothered googling because I do have an assignment due, and talking to someone about an essay which was supposed to "explain the growth of industrial militancy within the public service, and its implication for the neutrality ethic of the public service" a topic which young Pat said was rarely answered. Not surprised, because I'd pretty much established I had to argue that if there was any militancy it was not within the core public service but just on the periphery. Anyhow, to cut a long story short I asked this guy about my argument and said it seemed to me that the core public service at least just rolled over. And when he stopped laughing, he agreed. He said they'd expected a lot more opposition than they actually got, and were flabbergasted when they pretty much got none. Interesting though I argued that the implication for political neutrality came not from the militancy, of which there was none – but from the new management culture, where managers were removed from union coverage and were expected to defend government policy and public – no matter what. Both discretion and loyalty to the public service itself were flagged away. Got 90% for that. Thank you Pat. :-)

jh said...

I didn't like unions having seen the antics of seaman, watersiders and freezing workers. I joined a tour bus company at the time the employment contracts act came in. At the time I thought it was good; a core of old drivers could have hogged all the work and newcomers would have had to sit and wait. Since then wages just never notched up. Today the average age is 57 (or similar). One younger driver left calling it "a retirement job). The union old boy comes once a year with the same spin about how cleaver he is dealing with the company. Only half of us are in the union and the others are suckers.
To me the problem's aren't union issues they are political and workers need experts to work on their behalf. The Business Round table has 8 full-time researchers; banks have economists. Progressivism has become as much an industry as the church was in earlier times (via the public service).
The problem is immigration policy. Helen Clark most clearly stated "New Zealand needs a bigger population". Ian Hamilton's model where adding population to a primarily land - based economy lowers the marginal product of each additional worker and as a result:

*real wages will fall
*workers will seek better opportunists in Australia
*incomes will flow to owners of land
*resources will flow to low value service sectors
*we will have a larger pie but smaller pieces
http://www.tailrisk.co.nz/documents/TheSuperdiversityMyth.pdf

seems to fit like a glove.

Unfortunately our institutions are rotten to the core and that is why an alternate voice is required. Nativism is a progressive taboo so you cannot rely on Labour or the Greens, while National is enjoying hot sex with Real Estate - the media are in both camps. Therefore unions should be replaced by economists and those with that sorely lacking knowledge of the evolutionary aspects of human behaviour (not trendy progressives like Geoff Simmons or ethnically an interested Shamubeel Eaqub)

Anonymous said...

It is helpful that Jim Bolger has admitted that the employment laws were changed for the worse during the time that he was Prime Minister. Greater steps could have been taken by Helen Clarke's government during the nine years that they held office. Promises to change the laws by the Labour Party would be a massive step in the right direction for them if heralded now. Since he comes from a union background I would be happy to hear Andrew Little state what he believes coming from his experiences and how he would improve working conditions now.

peter d. said...

i was a union organiser at the time of the eca introduction. many years later talking to a high up member of the employers assn,said to me ,we could never understand why the trade union movement never rebelled and fought the act on the streets. he told me the employers assn and the govt was ready to water down the eca promptly had strong reaction taken place.so much for the leaders and the missled.

aberfoyle said...

I was a Orginiser,in those days,can remember local sub and branch meetings,all discussing the impending compulsory unionism,and remember sticking my neck out at a National meeting ,were the general consensus was, the membership shall fall but not so dramatic to effect the rump of the membership.I said,that that may be the case in the cities,but not so in the provinces,and sadly within six months i was proven correct.

What was misunderstood by the the movement on a whole,was that compulsory unionism,was for a large section of their members a excuse to their employer for the employer being forced legally to deducting their employees union fee and being responsible to forward it to the union ,(what can a do,its the law).

Within six months of the Employment Contracts Act,the union i was elected as a Orginiser,lost 80% of its rural membership.