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Archive for May, 2011

Labour leader Phil Goff announced today that if a Labour-led Government is elected in November then the minimum wage will move from $13.00 an hour to $15.00 an hour by 26 November 2012.

This is an important for Labour in standing on the side of low paid workers who are struggling to survive a tsunami of economic bad news in the form of food price increases, petrol price increases, tax increases and increases in central and local government charges at a time in which wages are not moving at all.

This also creates a coalition of four parties (Greens, Maori Party, Mana Party and Labour) who have policies targeted at an immediate increase to a $15.00 an hour minimum wage and, depending on the votes they can muster in November, the prospects of real relief for workers at the bottom of the pecking order.

However, while the $15.00 an hour minimum wage is an important move it does not provide a realistic path to solving the problem of low pay and income inequality in New Zealand, which is currently the 26th worst performer out of 33 OECD countries.

Since 1991 the average New Zealand workplace has become one in which workers are given no say on the level of their wages and working conditions apart from the minimum rates and conditions set down by parliament. The minimum wage, annual holidays, the payment for public holidays and parental leave are all set by the law and as more and more workers have no ability to negotiate these conditions, the more governments are forced to do it for them. It is not sustainable for the Government to do all the heavy lifting in this area. The effort must be owned by the workers themselves, organised collectively in their own workplace and industry organisations.

While only 9% of workers in the private sector have the ability to participate in their workplace, surveys have constantly shown that three times this number would like to have a say on their working conditions if there was some legal mechanism for this to take place. The Employment Relations Act, with its once-over-lightly approach, has not done this.

It is an area where real change needs to take place. Rather than the “willing buyer, willing seller” basis of current employment law we need to change to a rights-based legal framework where the participation of workers in negotiating the employment norms for their industries is set in law with an independent arbitrator who is able to listen to the arguments and eventually set these norms for all employers who want to set up shop in the sector.

This will get rid of the ridiculous situation that occurred in the 2004-07 period where private sector employers had massive shortages of labour but didn’t raise wage rates to attract workers because they were too scared of being outcompeted by other employers in the same market who didn’t. We need a mechanism that responds to these situations and sets a minimum set of employment norms that apply to all employers, not just some employers, in particular industries or markets.

If a specific employer doesn’t want to be bound by these arbitrated industry norms, that employer can negotiate their own collective employment agreement with the industry union on terms that are different, but better, than the industry norms.

It is time for a new deal for New Zealand workers. It is time for greater involvement of New Zealand workers in setting employment conditions. It is time to recognise that workers don’t just want to be reliant on the Government setting new minimum wage rates and employment conditions. Let’s do it now!

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