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Repealing The ECA Would Cost Jobs

Repealing the ECA would create massive problems for employers and would cost the country jobs, said the Hon Roger Sowry, Minister responsible for employment.

Industries which are leading the economic recovery - in particular tourism, which relies heavily on part-time and casual workers and needs flexibility - would be particularly hard-hit by any change to the ECA.

"School holidays used to be the 'strike season' with ferries and airlines walking off the job, but as soon as the school year started it'd be the teachers going out. Business, and the tourism industry, were held to ransom by the unions over and over again."

"Under the ECA, industrial conflict has fallen to its lowest level since 1935, with only 35 stoppages in 1998. In the last 3 years, work stoppages involved about 106,000 lost working days and about $14 million in lost wages," Mr Sowry said.

Under Labour’s last term, there were 905,960 working days lost and $100m more lost in wages.

"It's plain that Labour are between a rock and a hard place with this policy. They want to come through for their trade union support-base, but at what cost to the economy?"


Industrial action - Background

Stoppages peaked in 1986, with a record 1.329 million person/days were lost through strikes – an average of 2½ working weeks per employee spent on strike.

This is both the highest number of days lost on record and the second highest number of days lost per employee. In 1998, there were 11,778 lost person days, an average of 0.8 days per worker involved.

Employment growth between 1990-98 has seen 259,000 new jobs created.

By contrast, between 1984-90 56,000 jobs were lost (Source: SNZ Quarterly Employment Survey)

Recent research by Tim Maloney suggests that the ECA was a significant factor improving labour market performance. His research suggests that the ECA was responsible for 8-18% of the actual employment growth experienced between the first half of 1991 and the first half of 1996.

The number, and costs, of Work Stoppages 1984-1996

Year Total # Employees involved

(000) Person-days of work lost

(000) Ave. days lost per employee Estimated loss in wages and salaries $1998 (000)
1984 364 160.3 424.9 2.65 70,516
1985 383 182.2 756.4 4.15 86,939
1986 215 100.6 1,329.1 13.21 191,699
1987 193 80.1 366.3 4.57 33,547
1988 172 104.0 381.7 3.67 42,499
1989 171 78.9 193.3 2.45 23,129
1990 137 50.0 330.9 6.62 56,254
1991 71 52.0 99.0 1.91 13,107
1992 54 26.8 113.7 4.24 21,710
1993 58 21.3 23.8 1.12 3,168
1994 69 16.0 38.2 2.39 4,981
1995 69 32.0 53.4 1.66 7,141
1996 72 42.3 69.5 1.64 10,009
1997 42 7.7 24.6 3.22 3,166
1998 35 15.2 11.78 0.80 1,887

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