Government focussed on keeping wages low, Labour says
Sunday 6 October, 2013
Government focussed on keeping wages low, Labour says
The Labour Party has laid the blame for low wages on the National-led Government, saying that rather lift wages to get them closer to Australian rates, National has held them down.
“Everything this government has done in the last five years has been about suppressing wages, keeping wages low, keeping wages down,” Labour’s Labour Spokesman Andrew Little said on TVNZ’s Q+A today.
“The truth is wages and incomes in New Zealand is a big problem,” Mr Little said. “It has to be addressed in a combination with government and with business and with workers.
“Everybody has to be at the table... simply saying the old catch-cry, ‘Yes, job losses. Yes, we can’t afford it,’ that’s not an answer to the problem that we’ve got.”
Mr Little said Labour supports the Living Wage Campaign, but would not make it compulsory, effectively raising the minimum wage.
“We support the Living Wage Campaign because I think employers - both public and private - need to be able to manage the introduction of a living wage in their own way and in their own time.”
But Mr Little said there needs to be a “more structural approach to lifting wages more over time, and that is the systems we have supporting collective bargaining and those sorts of measures so that within the labour market and all of the machinery that goes around the labour market, there is a genuine way or a real way that working people can get their fair share of the value that they add, the value that they create when it comes to their contribution to business.”
He said “workers have got about a quarter” of the labour productivity gains of the past 20 years, and business 75 per cent.
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JESSICA MUTCH INTERVIEWS ANDREW LITTLE
Andrew Little, thank you very much for your time this morning.
ANDREW LITTLE - Labour’s Labour Spokesman
JESSICA Can I start off by asking you what’s Labour’s policy on the Living Wage?
ANDREW We support the campaign. You’ve got to remember, as I think one of the people said in your piece just there, is that it’s a community campaign about putting moral pressure on not just public sector employers but private sector employers as well. It represents or reflects, I think, a growing community concern that wages in NZ, as in many other countries, but certainly in NZ, have just got out of whack, been rising far too slowly. There are far too many people who are now struggling to make ends meet to have a comfortable life, and something has to change.
JESSICA So how would Labour make that work? Would you make it compulsory to have $18.40 an hour?
ANDREW No, there’s two things that a government can do. We obviously have the minimum wage, and we have campaigned on lifting the minimum wage to $15 an hour. We support the Living Wage Campaign because I think employers - both public and private - need to be able to manage the introduction of a living wage in their own way and in their own time. But the other thing I think we have to bear in mind is when you look at the history of wage increases and, indeed, of productivity improvements, labour productivity improvements over the last 20 years, what we will see is that wages have got right out of line. There is a case to lift wages. The government’s role is if it’s not the minimum wage, then it is a much more structural approach to lifting wages more over time, and that is the systems we have supporting collective bargaining and those sorts of measures so that within the labour market and all of the machinery that goes around the labour market, there is a genuine way or a real way that working people can get their fair share of the value that they add, the value that they create when it comes to their contribution to business.
JESSICA If you’re saying that the living wage is just that - what people need to live on - why not just make the minimum wage $18.40?
ANDREW Well, that would be a big lurch, and that would- You know, you have to accept that there are some businesses, particularly those who are employing those at the bottom end, who are going to have to make significant adjustments. I mean, if you have a look at one industry that employs a lot of people who are employed at or just above the minimum wage, that’s the retirement care industry. There are some very large employers in that industry; there are some very small employers in that industry, and all of those employers are dependent on the contracts they have with their local DHBs and other public contracts. Now, you can’t kind of just overnight legislate a massive increase without working out how that’s going to be paid for. Be under no illusion-
JESSICA Aren’t you just leaning on people, saying that, you know, ‘You should do this, oh, but only if you can afford it’?
ANDREW Um, well, that is the nature of proper and decent wage systems that we used to have, and I think, you know, most people would say, ‘Listen, let’s go and let’s negotiate our wage increases. Let’s talk to the employers, have a look at their business. Let’s see what they can afford.’ But let’s have a mechanism that we can apply that pressure. I mean, the catch-cry from the right and from business is, ‘Oh, we can’t afford pay increases unless there’s been a productivity improvement.’ Let’s look at the figures. Since 1992, labour productivity has increased about 45 per cent.
JESSICA We don’t want to go through all of those figures, though.
ANDREW Real pay increases over that time have gone up about 12 per cent. Business has got 75 per cent of the labour productivity improvement in the last 20 years. Workers have got about a quarter of it. That is wrong. That is out of step and out of line. Something has to change. An increase in the minimum wage was one part of the solution. Promoting and encouraging a living wage is another part of the solution, but the real solution is a structural change to ensure that all workers get the benefit of structural pressure on lifting wages in conjunction with talking with business.
JESSICA Let’s talk about another figure, since you’re so keen to talk about figures this morning. Let’s talk about another one. Simon Bridges has come out and said that having a living wage is going to cost 26,000 jobs and could cost in the area of $2.5 billion. What do you say to those numbers?
ANDREW That is a typical conservative party response to wages. Everything this government has done in the last five years has been about suppressing wages, keeping wages low, keeping wages down. For a government that went into an election in 2008 saying, ‘We want to reach parity with Australia’, and three years later say-
JESSICA Can businesses afford it, though?
ANDREW That’s their starting point. The truth is wages and incomes in NZ is a big problem. It is a huge problem. It is a problem that has to be addressed. It has to be addressed in a combination with government and with business and with workers. Everybody has to be at the table. But people have to be at the table recognising that it is a problem, recognising that wages and incomes have to increase over time, and we have to work out a track to do that. Simply saying the old catch-cry, ‘Yes, job losses. Yes, we can’t afford it,’ that’s not an answer to the problem that we’ve got. We have to find real solutions to lift wages in NZ.
JESSICA Because we’ve got some examples. Places like The Warehouse and the Auckland and Wellington City Councils who are saying, ‘Yep, we’re supportive of this idea.’ Do you think that councils and public servants, do you think it should be compulsory for them to get this $18.40?
ANDREW Well, there are some councils who are saying, ‘We recognise the problem. We want the people who work for us to live in dignity, have some decency,’ and they’ve made a commitment. I mean, even in the Labour leadership race, you had at least two of the candidates saying, ‘Yep, the Living Wage is important. We want to look at what we can do for core government in terms of government as an employer, and we want to see what we can do in terms of government procurement.’ So the fact that there are people out there making these pledges and making these commitments indicates that there is acceptance in the broader community that wage levels, income levels in NZ are a real problem we have to get on top of. And, yes, we have to get on top of the productivity problem, we have to get on top of our long-term wealth creation problem that we have, but the reality is for NZ right now is that in 20, 25 years’ time, we are going to face a major crisis, because there is nothing happening now in terms of investment, in terms of economic activity that is going to be able to sustain the sort of living standards that we enjoy today. Incomes and wages are part of that problem, and we’re going to have to do more to deal with that problem.
JESSICA We’re going to have to leave it there. Thank you very much for your time this morning, Andrew Little.