Woodhouse: tough on bad employers?

It should be heartening to see a National Minister of Labour (sorry, “Workplace Relations and Safety”) handing out to “bad” employers some of the no-nonsense tough-talk the right usually reserves for pregnant teenagers and people who don’t like being illegally spied on:

Employers who exploit their workers or breach employment standards are in line for a raft of harsher penalties.

New measures set to be introduced by the Government, include naming and shaming offending business owners, a massive increase in the value of fines the Employment Court can hand out, and the possibility of being banned from employing staff.

Thing is, it’s very easy to promise you’re going to crack down on employers who breach minimum standards … when you’re reducing said standards to make it easier for bad employers to get away with bad behaviour.

This is a government which has empowered employers to dismiss workers in the first 90 days for any reason whatsoever, walk away from collective bargaining, refuse to provide full information to workers who are dismissed or made redundant, hire new workers on worse terms and conditions than the collective, and even allowed employers to take their share of KiwiSaver contributions out of your pay.

They’ve re-introduced youth rates so 17- and even 19-year-olds can be paid less for doing the same work. They’ve removed protections for vulnerable workers like cleaners so their mates at CrestClean can make more money. They’ve allowed millionaires like Peter Jackson to classify permanent employees as “contractors” and deny them basic protections.

Talking tough now about “stronger sanctions” and “sending a message” can only be seen as a PR exercise. Which is a pity, because if National actually cared about cracking down on the bullies of New Zealand workplaces, I’m sure workers would be happy to provide a list of candidates.

By the time we get around to 2017 – unless Winston (a) wins in Northland and (b) doesn’t sell out for some sweet office-baubles again – the “minimum employment standards” in New Zealand could be so flimsy that Woodhouse could make breaching them punishable by public flogging and it wouldn’t mean much. The bad employers will take full advantage, and the good employers – who believe in radical notions like “my workers should be able to have a lunch break” and “my workers need to be able to afford food and rent” – will be undercut and struggle to stay in business.

Which makes Woodhouse’s stormy rhetoric all the more ironic:

“Those who breach minimum employment standards have an unfair advantage over law-abiding employers and it is unfair on employees who work hard to support their families”

You know what else is unfair, Minister? Removing basic workers’ rights, undermining workers’ collective bargaining, and redefining “law-abiding employers” so it covers the exploitative companies who – probably – support your election campaigns.

Cottoning on to new ways of exploiting workers

Cotton On have hit the news for all the wrong reasons, with FIRST Union revealing that they’re pushing to remove guaranteed rest and meal breaks from workers in their distribution centre. FIRST General Secretary Robert Reid says:

“Breaks are crucial on industrial sites because they keep people safe. Worker fatigue is a risk on an industrial site like the Cotton On distribution centre. Removing breaks increases the risk to workers. After the government’s law changes removing tea and meal breaks is legal, but that does not make it ethical or sensible”

Labour’s labour spokesperson Iain Lees-Galloway demonstrates how this absolutely puts the lie to John Key’s promises about his unfair employment law changes:

“John Key told Kiwis who work for a living that their tea breaks would not be taken away from them by the law change. Yet at the very first opportunity, we see a large employer trying to claw back their staff’s right to a break.

“John Key also told us that the law change was about supporting small New Zealand businesses. Yet the first to take advantage of it is a wealthy Australian corporation.

“And John Key said that industries such as hospitality and air traffic control were the ones that needed the law change. Yet people working in retail with predicable customer demand are the first to be hit.

It really defies belief – at least, if you’re a person who understands that workers aren’t robots and that there’s some basic principles which are more important than profit – like making sure every worker goes home safe and well at the end of their shift, not worn out like a machine part.

But look at Cotton On’s own weaselly, misleading defence of themselves:

In response to recent comments made by First Union NZ, the Cotton On Group would like to make it clear that no changes have been made to our workers’ rights in any of our distribution centres. Negotiations are currently in place between the Cotton On Group and First Union with no agreement having yet been made.

The Cotton On Group is committed to having highly engaged staff and we have an effective two-way communication process in place, by way of implementation of our consultative committees which exist in each of our DCs globally, allowing each and every one of our people to have a voice.

To ensure we can maintain the integrity of the negotiation process we are committed to continue our conversations with First Union until an agreement is made. Our people and their working conditions have and always will be our top priority.

That’s literally the whole statement. In the first paragraph, they try to misdirect you about the facts of the matter: FIRST’s release is very clear that these are changes being negotiated (demanded) by Cotton On in bargaining. The second paragraph reads like it was written by the people behind the infamous Target union-busting video.

And the third paragraph is simply a lie. “Your people” (or as Cotton On and Target both call them, “our team members”) and their working conditions simply can’t be your top priority if you’re trying to take away the guaranteed breaks they already get under their agreement!

When the Employment Relations Amendment Bill was proposed, then-Minister of Labour Simon Bridges made a great hue and cry about “flexibility” and “fairness” in the workplace. Cotton On is showing us exactly what that means – and sadly, they won’t be the only ones.

The right to strike

The right to strike is recognised internationally as a fundamental workers’ right – though it’s not universally respected, like many other basic human rights. Global union IndustriALL notes five reasons why workers need the right to strike:

  1. Striking is a last resort but sometimes the only tool for workers to protect themselves.
  2. To avoid being at the complete mercy of employers.
  3. To give more of a balance between worker and employer power.
  4. Without it, more and more governments will ban industrial action and punish people who dare to strike.
  5. Most strikes are over pay and better working conditions. Without the threat of strike action, corporations will be able to make bigger profits, while working conditions will get worse.

In honour of International Right to Strike Day tomorrow (18 Feb), the CTU is inviting Kiwis to send a message to 20 of New Zealand’s biggest businesses telling them to call out their association’s participation in the global campaign to remove the right to strike.

Back in 2013, National had the nous to trash Jami-Lee Ross’ thoroughly Orwellian-named “Continuity of Labour” Bill, which would have allowed employers to lock out workers and bring in volunteers or contractors to replace them, effectively destroying the power of strike action. The bill was apparently driven up through the National Party’s ranks, and was heavily endorsed by many members – but the government could see it was a step too far, and canned it at first reading in order to get their more “technical” law changes through – including the removal of basic guaranteed rest breaks.

As the third-term desperation sets in, I’m not sure they’d do the same thing again. A fourth term’s never out of the question but with the wheels already falling off the SkyCity “deal” and the Mike Sabin issue denting the PM’s credibility with the press gallery, it’s got to be looking further and further out of reach. So who knows what they’ll try to get through while they’ve got the chance?

The lie about productivity and wages

The Productivity Commission has a new report out which looks at changes in the labour income share, or LIS, from 1978 to 2010.

The labour income share is described in the report’s summary as:

The labour income share (LIS) measures the split of national income between workers who supply labour and the owners of capital.

To a non-economist like me, that’s pretty much “how much the workers are getting out of their work and how much is going to the boss.”

The media release is pretty cheery about our labour income share:

“Even though the LIS has fallen overall in the measured sector of the New Zealand economy, the evidence is that the real wages firms pay their workers increase more rapidly when productivity growth is strong”, says Paul Conway, Director of Economics and Research.

“Over time, growth in real wages paid by firms in the measured sector was strongest during New Zealand’s period of high productivity growth from the mid-1980s to 2000 and much weaker when productivity growth was lower. Higher real-wage increases are also more likely in high-productivity-growth industries.

It sounds great, superficially. When productivity growth is high, we get the “strongest” wage increases. It makes perfect sense: obviously employers – being pure rational economic actors – pay people commensurate to their productivity. If you work harder, you get paid more.

But take another look at that first clause:

Even though the LIS has fallen overall in the measured sector of the New Zealand economy

And look at this, from the summary linked to above:

The LIS has recently been the focus of considerable international concern that growth in real wages has fallen behind growth in labour productivity. When this occurs, the LIS falls as the share of national income going to labour decreases and capital receives a bigger slice.

That is to say: even though workers are more “productive”, their income hasn’t increased in proportion to their productivity.

They’re working harder, but not getting paid more in return for it.

But the Productivity Commission urges you not to jump to any hasty conclusions:

While this work is mainly about the split of the income “pie” across labour and capital, it is also important to keep in mind the growth of the pie as a whole. For example, if productivity growth is fast enough, real wages could still be rising at a reasonable pace even when the LIS is falling. To the extent that income has an important bearing on wellbeing, this may be preferable to an economy in which the LIS is constant because real wages and productivity are both stagnating.

Ah, yes. Grow the pie. Ignore the fact your slice of it is shrinking in comparison to the bosses’.

There’s a bizarre implied threat there. Hey, workers, don’t get too antsy about the fact you’re not being fairly recompensed for producing more work, because you could be living in a dystopia where you get a fairer share but the owners are making less money!

So, what are the reasons for the globally-observed fall in LIS?

This fall in the LIS has been attributed to a number of influences, including new technology, globalisation and reductions in worker bargaining power.

New technology isn’t the problem – of course when you put Ellen Ripley in a power loader she shifts more stuff for the same effort – but “globalisation” and “reductions in worker bargaining power” are pretty telling. That means: we’re making more money exploiting labour in the developed world. That means: we smashed the unions so you have to settle for what your employer deigns to offer.

The Productivity Commission opines that this report “underline[s] the need for New Zealand to have a resilient and flexible economy which can adjust to new technology and help workers adapt to new jobs. The emphasis needs to be on adapting to change, rather than resisting it.”

But who else talks about making the economy more “flexible”? The National government, while pushing through law changes which undermine worker bargaining power.

I’m going to go with the PSA, which takes a different view:

Report confirms workers need a pay rise.

Does the National Party really not understand how unions work?

This article in the Herald gave me a giggle today. It refers to a cash payment being made to Parliamentary Services staff who are part of their workplace collective employment agreement. Similar cash payments have been denounced by National in the past – when it happened under Labour – and are being denounced by Don Brash now – because it’s happening under National.

The line that’s being run is that this is “bizarre”. That it makes no sense to “incentivise” people to belong to the union. That National have decided, mysteriously, of their own free will, to just randomly “give” more money to union members than to non-union members of staff.

Does Don Brash – and John Weekes of the Herald – actually not understand that this is exactly how union membership works? You get together as a group to bargain collectively with your employer. This means you have more power to get a better deal. And sometimes, this deal involves cash payments – usually because employers, including Parliamentary Services, don’t want to agree to an actual, or sizeable, payrise. (The Parliamentary Services agreement hasn’t included a payrise in six years!)

And yes. It is truly, completely fair that non-union members of staff don’t get the same payment. They’re not part of the union. They don’t take part in the same negotiations as the union members. They don’t have the same leverage as a collective group does.

That’s pretty much the basic, founding principle of unionism. Strength in numbers. Power against the powerful.

Of course, the reason for the outrage is simple: the right do not want word to get out that being a union member works. They’ve put a lot of effort into dividing workers from each other, making us look at our co-workers as enemies, as competition. We’re meant to believe that if we keep to ourselves and work one-on-one with the boss, we’ll get the best deal.

And you know, that probably does work for some people – people who are already in highly-paid, highly-specialised roles. For security guards, cleaners, receptionists? Not so much.

This story is the proof. By joining forces and working together, the union members at Parliamentary Services have got a better deal. And it terrifies people like Don Brash.