Unmistakably Labour Legislation.

The Age-Old Question: The idea of laying a solid floor of wages and conditions beneath the feet of workers in industries notorious for engaging in exploitative “races to the bottom”, but keeping the way clear for improving upon these base “Free Pay Agreement rates” in case-by-case collective bargaining, will act as a highly effective recruiting sergeant for the unions.

AT LAST! The Sixth Labour Government has finally introduced legislation the First Labour Government might recognise. Labour Minister Michael Wood’s “Fair Pay Agreements Bill” is the first real effort since the Labour Relations Act of 1987 to materially strengthen the hand of New Zealand’s beleaguered trade union movement. If the Bill’s intent is not watered-down in the process of making its way through Parliament, and if the Labour Government is re-elected, then trade unionism in this country is likely to expand rapidly.

The reason for this is simple: the Bill not only makes joining a trade union look like a good bet; it makes it look like a safe bet. The idea of laying a solid floor of wages and conditions beneath the feet of workers in industries notorious for engaging in exploitative “races to the bottom”, but keeping the way clear for improving upon these base “FPA rates” in case-by-case collective bargaining, will act as a highly effective recruiting sergeant for the unions.

Something very similar happened when the First Labour Government made membership of a trade union a legal prerequisite for enjoying the fruits of compulsorily arbitrated “awards” – the model for Wood’s FPAs.

Following the legislation’s passage in 1936, vast, hitherto unorganised, swathes of the workforce were swiftly enrolled in a clutch of new trade unions. The largest of these was the Clerical Workers Union which, for the first time, allowed the overwhelmingly female workforce of office clerks to join the ranks of the industrial army. In the years that followed, workers as varied as journalists and law-clerks were enrolled. There was even a Musicians’ Union.

The “Awards” negotiated by these unions were the brainchild of the Labour Party’s predecessor in progressive social reform, the Liberal Government of 1890-1912. Its 1894 innovation, the Industrial Conciliation and Arbitration Act, was hailed across the world for its enlightened approach to labour relations.

The IC&A Act empowered an Arbitration Court, composed of judges representing the employers, the unions, and the state, to issue legally binding sets of minimum wages and conditions, negotiated by the representatives of workers and employers from across entire industries. The Arbitration Court could also issue “General Wage Orders” lifting the incomes of workers across the entire economy.

The problem, of course, was that if an industry remained unorganised, then the Court was unable to “award” its workers and employers wages and conditions minima. Caring and responsible employers soon found their less scrupulous competitors undercutting them on price by requiring their employees to work harder and longer for less.

Such were the tactics that set off the aforementioned “race to the bottom”: a business model predicated on the maximum exploitation of an industry’s workforce. Putting it bluntly: the lower the wages, the higher the profits.

This was the problem the First Labour Government’s introduction of universal union membership was designed to remedy – and it worked.

The National Party’s spokesperson on “Workplace Relations & Safety”, Paul Goldsmith, was quick to respond to Minister Wood’s introduction of the Fair Pay Agreements Bill, promising to oppose it “stridently”. It was, he said: “an ideological overreach, deliberately going to war with employers at a time when we’re facing huge economic challenges”.

One can only admire Mr Goldsmith’s cheek. The political party guilty of “ideological overreach”; the party guilty of “going to war” against its fellow New Zealanders; is not the Labour Party, but the National Party.

The Employment Contracts Act 1991, introduced by Mr Goldsmith’s predecessor, Sir William Birch, stripped New Zealand workers of workplace rights they had enjoyed for nearly a century. It set in motion the relentless shift of corporate surpluses from wage-earners to shareholders that has seen today’s workers earning thousands of dollars less per year than would have been the case had Mr Goldsmith’s “flexible labour market” not destroyed the inherent Kiwi fairness of the system it replaced.

The destruction of the trade union movement is the most important achievement of New Zealand’s Neoliberal Revolution. In 2022, fewer than 10 percent of the private sector workforce is unionised. In dramatic contrast to 1990, today’s typical union member is a tertiary-educated female, working in the public sector, and earning a salary well above the median New Zealand income of $59,000 per year.

Michael Woods Fair Pay Agreements Bill represents a first – and unmistakably Labour – step towards re-empowering all Kiwi workers.

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 1 April 2022.

The Living Wage Campaign: Solidarity Or Charity?

Morality vs Cold Hard Cash: The Living Wage Campaign depends for its success upon inciting mass moral outrage against low wages. But it's not the charity of fellow citizens that low paid workers need - it's their solidarity. The restoration of universal union membership and national awards would secure a living wage for working-class Kiwis a lot faster than a campaign to mobilise the better angels of New Zealand's notoriously fickle middle-class.

“CALL UP THE CRAFTSMEN, bring me the draughtsmen, build me a path from cradle to grave. And I’ll give my consent to any government that does not deny a man a living wage.” In just thirty-three words the English songwriter, Billy Bragg, captures the essence of the grand social bargain that became the post-war Welfare State.

 

What does it say, then, about New Zealand’s social and economic priorities in 2013 that “a living wage” has, once again, become something to which hundreds of thousands of working-class New Zealanders can only aspire?

 

When I first learned about the Living Wage Campaign I was dubious. Not, I hasten to add, about its ultimate purpose – who can dispute the sorry state of New Zealand wage-rates? No, what bothered me were the means which the promoters of the Living Wage (calculated this past week at $18.40 per hour, or $736.00, before tax, for a 40-hour week) were employing to achieve their objective.

 

Moral suasion is a powerful force and certainly not one to be underestimated. New Zealanders, of all people, should have no doubt about the ability of a strong moral argument to mobilise public opinion against clear and present evils. Those of us old enough to recall the turmoil in which New Zealand was engulfed during the 1981 Springbok tour will readily attest to the consequences of moral force. David Lange’s extraordinary speech to the Oxford Union bore similar testimony to the power of a well-marshalled ethical argument.

 

But all the 1981 protests and Mr Lange’s Oxford Union speech achieved was the exclusion of apartheid sport and nuclear weapons from New Zealand territory. They certainly did not end apartheid or nuclear weaponry. Moral suasion can only take you so far.

 

How far The Living Wage Campaign’s moral arguments will take it depends on how vulnerable its targeted employers are to public sentiment.

 

I was not surprised to learn that practically all the successes of similar initiatives overseas were achieved in the public sector. Where the ultimate employers of poorly-paid working people are local or central government politicians there is clearly room for leverage. If the electors can be persuaded to pressure candidates (like London’s Boris Johnson) into supporting a living wage for low-paid council and/or government staff, then a favourable outcome (even one that comes at the rate- and tax-payers’ ultimate expense) is highly likely.

 

Large monopoly suppliers of goods and services might also be persuadable. The opportunity to burnish their public image by stepping-up to the plate as good corporate citizens can easily be paid for by adding a cent or two to their prices.

 

In more competitive marketplaces, however, rising labour costs cannot be passed on so easily. In small to medium enterprises the sharing-out of any surplus tends to be a zero-sum game. Higher wages all-too-often mean lower profits. Moral suasion in these circumstances is unlikely to take you very far at all.

 

Most perplexing of all about the Living Wage Campaign is its origin in the trade union movement. It is hard to think of a more glaring admission of defeat than launching a campaign whose success is ultimately dependent on melting the hearts of the employing class. As if the events of the past three decades hadn’t supplied all the evidence a trade unionist could ever need that, when it comes to serving the shareholders (and securing their bonuses!) the employing class has no heart to melt.

 

It should come as no surprise to anyone that the period in our recent history (the mid-1980s) when the share of national income going to the top 1 percent of income earners was at its lowest, was the very same moment at which the number of workers belonging to a trade union was at its highest.

 

Or, to put it more bluntly: the most effective instrument for securing a living wage for all workers is a large, strong and confident labour movement. A movement strong enough to secure the restoration of the national award system (which removes the cost of labour from the arena of inter-enterprise competition) and the return of universal union membership (which is the only way of guaranteeing a living wage for workers in the now almost entirely de-unionised service sector).

 

The Living Wage Campaign that I could lend my wholehearted support to would be the one which set out to explain why these two radical employment relations reforms were crucial to the reconstitution of a workforce that could enter the workplace every morning with dignity and confidence and depart every evening without fear.

 

It is not the pity and charity of the middle-class New Zealanders being targeted by the Living Wage Campaign that low-paid workers need – it’s their solidarity.

 

The only melting of hearts I have ever witnessed is when people stand and struggle together – for justice.

 

This essay was originally published in The Press of Tuesday, 19 February 2013.

A Thought For Labour Day

Apologies for the Spelling! But this cartoon from the US Christian Science Monitor neatly encapsulates my thinking on Labour Day 2012.

FOR TWENTY-FIVE YEARS now we have been conducting a social experiment on the consequences for New Zealand workers of voluntary unionism and enterprise-based employment contracts. The results are in - and they are crystal clear.

The steady growth in workers incomes that characterised the 40 years following WWII came to a definitive end with the Employment Contracts Act in 1991. The widening gulf between NZ and Australian wage-rates dates from then, as does the explosive growth in social inequality.

To a social-democrat it should be axiomatic that this experiment be brought to an end. The true measure of neoliberal ideological hegemony, however, may be discerned in the inability of not only the NZLP but the CTU itself to recognise the necessity of rebuilding a mass labour movement.

Everything the unions have tried to overcome the structural obstacles placed before the trade union movement by the neoliberal authors of NZ's labour relations legislation has failed. Union density in the private sector now stands at less than 10 percent. And still union officials and Labour MPs will roll their eyes in scorn the moment a return to universal union membership or a national award system is suggested.

Nothing I know of could better illustrate neoliberalism's almost total victory over the Left than hearing union leaders argue against the interests of their own members in the language of their oppressors.

Something to think about on Labour Day.

This posting is exclusive to the Bowalley Road blogsite.

National Attacks Unions ... Again. How Will Labour Respond?

Other Options: If Labour fails to meet National's latest challenge to the right of workers to trade union protection, then other, less timid, political forces will step into the political space they have chosen to vacate. The dialectic does not sleep.

“YOU MAY NOT BE INTERESTED in the dialectic,” quipped Leon Trotsky, “but the dialectic is interested in you.” As the National Party prepares to introduce yet another tranche of employer-friendly changes to New Zealand’s labour relations law, Labour will be required to respond. What will that response be? Will it continue to promote policies that have hardly changed in 25 years? Will it go on behaving as if the charges laid against the trade union movement of the 1970s and 80s were true? Or, will it serve notice on the Employers that: if they persist in attacking and undermining the trade union movement legislatively, then Labour and the other parties of the Left will be forced to retaliate in kind?

Here’s a tip. If you expect the current leaders of the Labour Party to do anything more than mutter: “Tut, tut! Nasty National Party! Why are you being so mean to the poor little unions?” Well, you’re dreaming.

It’s the party’s labour relations spokesperson, Darien Fenton, that I feel sorry for. Her instincts, as a former trade union secretary, are generally pretty reliable. I strongly suspect that, if her caucus colleagues would only let her, she’d come out strongly in favour of a full-scale counter-attack against National’s legislatively-driven union-busting. But, of course, her caucus colleagues won’t do that because, like the former SUP leader whose advice on industrial law Labour has followed consistently since 1987: “they would rather keep control of the losing side, than lose control of the winning side”.

To the middle-class professionals at the summit of the Labour Party the very idea of re-empowering working people in the workplace, and restoring a semblance of balance to the employment relationship, is anathema. Why? Because it would very quickly lead to a massive recovery of working-class confidence – and that is not something the current crop of Labour politicians are either personally or ideologically equipped to deal with.

The litmus test of a Labour politician's commitment to genuine labour relations reform is whether or not they support universal union membership. It was the introduction of universal membership by the First Labour Government in 1936 that instantly evened-up the balance of social forces in depression-ravaged New Zealand, and its re-introduction in 2014 would have exactly the same effect. For most Labour MPs, however, universal membership (or, as they insist on calling it, “compulsory unionism”) has become what the Americans call a “third-rail” issue: touch it and die.

“Far better,” they parrot, “to have members by conviction than compulsion.” The fact that we have had “members by conviction” for the past 20 years, during which private-sector union density in New Zealand has fallen from just under 50 percent in the mid-1980s to less than 10 percent currently, makes not the slightest impression on their thinking. It’s as though “voluntary unionism”, far from being a busted flush, is still a viable experiment in progress – and they’re just waiting to see how it turns out. Not even the Council of Trade Unions’ graph showing the inverse correlation between union density and the share of national income controlled by the “One Percent” has dented their absolute certainty that a restoration of universal membership is neither feasible nor desirable.

And yet, raising the age of eligibility for National Superannuation was once declared to be a “third-rail” issue, but that didn’t prevent Labour going into the last election with a policy of lifting the age of eligibility from 65 to 67. The same used to be said about the introduction of a Capital Gains Tax, but, once again, Labour (alongside the Greens) campaigned in 2011 for its introduction. Strange, isn’t it, that policies applauded by the Centre and the Right are deemed worthy of risking the electorate’s wrath, but those associated with the Left are not?

A genuine Labour Party would have little difficulty in both formulating and promoting a campaign for universal membership. Recent and current disputes have driven home to the public the considerable legal powers available to employers and the corresponding vulnerability of employees in the post-union workplace. Is the Labour Party of 2012 really so much less capable than the nineteenth century Liberal Party that it cannot draft a comprehensive set of progressive labour reforms? Is there no one in its ranks equal in eloquence to the Rev. Rutherford Waddell, whose famous sermon, “The Sin of Cheapness”, led to the setting up of the Sweating Commission and recruited even middle-class reformers to the unions’ cause?

Labour does not even seem to possess anyone with the political smarts to approach National quietly and say: “Listen you guys, if you’re stupid enough to introduce this latest round of anti-union legislation, we’ll be forced to announce a comprehensive reform package of our own – which, we assure you, your friends the employers will not like. Why don’t we both agree to simply let sleeping dogs lie?” It wouldn’t be a very courageous, or ethical, way of operating, but it would probably work. [The same strategy would, of course, succeed in relation to the Government’s plans for “partial” privatisation. A constantly re-stated pledge to take the assets back into 100 percent public ownership would seriously dampen investor enthusiasm. And yet, Mr Shearer insists on telling potential investors: “Once they’re gone, they’re gone for good.” Such a helpful fellow.]

It is one the great ironies of recent political history that the Right has learned the lessons of effective left-wing propaganda more thoroughly than the Left itself. Groups like the Business Roundtable and the Maxim Institute have always understood the enormous power of ideas, and how an argument well-researched, well-presented, and then powerfully and consistently advocated, will almost always shift public opinion in the desired direction. Copious evidence of exploitation, poverty-level wage-rates and oppressive employer conduct is available to any Labour MP willing to sit down for an hour with any union organiser. And any employment lawyer will succinctly list for them the insurmountable legal barriers to effective union protection. The only thing preventing Labour from campaigning for the comprehensive restoration of fairness in the workplace is its own, selfish, disinclination to meaningfully empower the party’s electoral base.

Labour’s disinclination to lead effective action to assist working people will not, however, prevent such action being proposed and, ultimately, taken. National and its employer mates have need of these proposed reforms precisely because, in the current economic climate, the profitability of their firms cannot be preserved except at the expense of their employees. But workers barely earning enough to cover basic living expenses now, cannot afford to accept a future in which they are paid, in real terms, even less. Like the response of the Greeks and the French to the policies of austerity, low-paid New Zealanders’ response to falling living standards will be to turn to the political parties of the Left for support. If Labour wants to know what a future based on surrendering to the power of the bosses looks like, it need only consider the fate of PASOK, the Greek Socialist Party. In 2009 it won 44 percent of the popular vote. In 2012, after allowing itself to become the IMF’s, the ECB’s and the EU’s bailiff, it won just 13 percent.

As Trotsky knew only too well: the dialectic is never uninterested in human affairs, and it never sleeps.

This posting is exclusive to the Bowalley Road blogsite.