One of the very exciting aspects of conference for me was showcasing the work that has been done on bold new economic policies. Policies that are prefaced on the belief that fairer economies are more successful economies and that there are fundamental structural problems in our economy that require a fundamental shift in approach.
One important policy area that is key to both fairer outcomes and changing our economic performance is our employment relations policy. A lot of work has been done by the CTU, Labour affiliated unions and Labour MPs to re-cast our policy. There is a recognition that while the Employment Relations Act was a necessary response to the damage of the Employment Contracts Act, it was not sufficient to really shift outcomes for wage and salary earners. In particular the ability to collectively bargain has proven to be an elusive right for most New Zealanders. As a consequence wages have lagged and many have been dependent on changes flowing from increases to the Minimum Wage.
Low wages have huge negative impacts – for families, for communities and for our economy. Low wages mean many struggle to make ends meet (or can’t make ends meet). Low wages mean that essential investment in lifting productivity by investing in technology and lifting skill levels has not had the necessary economic imperative. If you have to pay decent wages you become focused on getting the best possible results. Low wage workers are seen as readily replaceable commodities. Low wages pushes our families to Australia to get a better deal (on average wages are 30% higher).
So the new employment relations policy is focused on delivering the benefits of collective bargaining to more New Zealanders and importantly the mechanism for doing so is created through extending negotiated outcomes to become industry standards. This will require industry level negotiations. What this does is to facilitate focus on industry wide issues like training and qualifications and standards. It requires cooperation at the industry level.
In my mind this is vital to shifting our economic performance. If firms can compete on driving down wages and conditions inevitably a productivity enhancing investment approach comes under pressure. Short term cost reduction becomes the driver. We cannot become a high wage, high skill and highly productive economy with this approach.
CTU President Helen Kelly gave a very clear and passionate elaboration of a new employment relations framework. As she says “ It is time for a new look. While this Government has proven to be a disaster in all of these areas (high unemployment, low wages, long hours, unfair taxation, reduced social security and public services – my summary) , it has been able to get away with it because the current economic paradigm is completely dominant and unchallenged. That paradigm tolerates poverty as a natural partner to wealth, that paradigm values wealth over any or all social values and that paradigm makes working people the victims of all and any of its failures”.
A new employment relations framework is necessary. It is necessary because it is vital to shift to the type of economy we need, it is necessary from a rights perspective (real rights to collective bargaining and to having an independent voice) and it is necessary to deliver a decent standard of living for all New Zealanders.