Red Alert

David Shearer’s speech #2

Posted by on April 19th, 2012

countryworks_newsLabour leader David Shearer made his second major “scene setting” speech in Nelson today and outlined Labour’s support for the introduction of a “living wage” movement in New Zealand to pay people what they need to live on, rather than just sticking to the minimum wage.  Here’s some excerpts :

Here in New Zealand we have been working harder than almost anyone in the developed world. But it’s not paying off.

We are trying to succeed by squeezing more out of people, by paying lower wages than other countries and working longer hours than them. When people tell me they’re actually working harder for less, I believe them.

Hundreds of thousands of honest individuals get out of bed each day and go to work, and they cannot get ahead. Take the rest home workers who earn eleven cents an hour above the minimum wage doing a really important job – looking after our parents in the years in need.

They’re playing by the rules, doing their bit. And yet how do they raise a family on eleven cents more than the minimum wage?

Take the skilled contractor or the owner of a small business who risks everything to raise the capital they need to buy equipment or a van, take on staff or subbies. I want them to know someone is on their side, and to feel hopeful that our economy is working for them just as hard as they are working.

I want them to know someone is on their side, and to feel hopeful that our economy is working for them just as hard as they are working.

Then he unpicks the productivity vs wage argument :

The average wage in 1989, in today’s dollars, was $21.49. By 2011, it had reached $24.43. But if wages grew as much as productivity for the twenty-two years up to 2011, then the hourly rate would have been $31.85. That’s an extra seven dollars an hour, or $297 a week that the average worker earned but didn’t get paid. How many people would be wanting to go to Australia as they are now in record numbers if we paid that?

And the idea of a Living Wage :

Imagine if we could create a New Zealand where everyone could earn enough to provide a good living for their family. That’s not the case now.

One emerging idea I’m interested in is the Living Wage. It’s the amount a person needs to earn to provide for themselves and a family. It’s started to catch on London since 2004 when the London mayor set up a unit that works out the Living Wage level each year. Over time, as finances allowed, Council gradually began to pay the Living Wage level. Now some businesses that contract with the Council have agreed to pay it too, whether they hire direct employees, contractors, or temporary staff.

And on the National government’s approach to our future :

We can’t cut our way to prosperity. Zero budgets are what you get when you fail. How many people would be wanting to go to Australia as they are now in record numbers if we paid that.  Surely lifting everyone up must be the point of economic growth, or why do we bother?”

And a message to New Zealand working people :

The message I want to give the thousands of New Zealanders who go to work every day, look after their kids and do the right thing, is this:

Labour will deliver for you. Under Labour you will be our priority. We want the country to work for you.


21 Responses to “David Shearer’s speech #2”

  1. Spud says:

    Yee haa! $ Living wage! $ WOO HOO! $ :-D $ :-D $ :-D $ :-D $ :-D !

  2. Last Bus says:

    A Labour government with leadership that Lange, Clarke and now Shearer is something that has credence. I personally have never voted for any party other than Labour. As long as David Shearer provides a clear picture of the NZ that the majority of New Zealanders want to see there kids grow up in and live their life here I believe the labour party can emulate Helen’s three consecutive terms.

  3. Andrea says:

    Do you suppose that people will then cease to be punished for working? And saving?

    How about recanting on secondary income tax? If someone is prepared to work two and three jobs to gather money to fuel a dream – will whoever’s on the treasury seats get their hands out of our pockets and simply tax the overall income level?

    Will those ‘dreadful bennies’ be able to work without the vicious penalties – the loss of income, the financial standing still, or even sliding backwards, no matter how hard you work – that currently create the ‘welfare trap’?

    And the present habit of ‘cheap goods’. That one. Plus the scruffy products we turn out that simply aren’t as elegant or practical as those we can import so ‘cheaply’.

    Will there be a local market for the clean, green, and clever outputs? Or will we be still be at the old level of domestic market (the seconds), and the export market (the best of the best)? We’ve been treated as second class customers for a very long time, haven’t we? WIll that change?

    An interesting start, Mr Shearer. Let’s see what’s offered next. Something with enough meat on it to start taking some business risks with, hopefully.

  4. OneTrack says:

    Sounds very touchy-feeley, but what is Labour actually going to do ie real-live policies

  5. Nathan Mills says:

    OK, so here’s a big opportunity to draw a line in the sand. If elected tomorrow, what hourly rate would Labour be encouraging businesses to pay under this concept?

  6. George says:

    When living wages were last paid a labourer’s wife could stay home until her youngest child turned five. Now Ann Romney is just about the only woman in the English-speaking world that can afford to stay at home. How can people claim that real wages have risen since those days?

  7. Edwin says:

    “Economic history offers no example of a country that experienced long-term productivity growth without a roughly equal rise in real wages.” – Paul Krugman

  8. Tim G says:

    In London large corporates (w h smith, marks and spencer) would boast of paying the ‘London living wage’ and the mindless media would repeat the jargon.

    It seemed to me it was only a rebranding of the minimum wage as a PR favour to those corporations. Of course those companies COULD pay their Oxford street employees a 6 quid an hour minimum wage, but in reality they would have no one left to work for them if they paid so little.

    So it was free PR for the big corporates whilst the truly unscrupulous continued to exploit subcontinental labour out in zone 6 and beyond.

    So I ask – why not just stand firm on raising the minimum wage? Or is the ‘living wage’ just a dog whistle to the big corporates like in the UK?

  9. Darien Fenton says:

    @Tim G : No the London Living wage came about because of a community organising movement, as it has in the US. It started with local councils and anyone contracting services using government or ratepayers money. The idea is that no public money should be spent without labour standards being agreed to. Labour will stand firm on raising the minimum wage. Nothing has changed about that or our other policies around work and wages.

  10. Waterboy says:

    A living wage is something for good employers to aspire to.
    Most employers are good employers so this is a good idea, if they get the staff on board and both work together towards this goal its a win win situation.

    The current minimum wage is not a living wage

  11. Herodotus says:

    Perhaps our incomes would not be such a problem if the exorbitant cost of housing had been addressed. Think if housing had maintained traditional levels of affordability what that would have allowed in disposable incomes for households.
    http://www.productivity.govt.nz/final-report/1468
    Still to many passive phases used here – Leadership is not passive.

  12. Fortran says:

    David
    Show us the money – how are we going to pay for this ?

  13. Dave says:

    “A Country that works for you”, In the same vain, “ask not what your country can do for you, ask what you can do for your country” A much better paradigm I would have thought.

  14. Dave says:

    “A Country that works for you”, In the same vain, “ask not what your country can do for you, ask what you can do for your country” A much better paradigm I would have thought.

  15. Tim G says:

    @Dave – *vein

    @Darien – Whilst I’m confident you’re right about the history, isn’t the concept of a living wage (rather than pouring the party’s energy into a minimum wage being liveable – it is disgraceful that it is not) advantageous to unscrupulous employers?

    Is there any data, for example, about the impact of the “introduction” (given not a legislative act, I know it was by agreement between employers) of the living wage on subsequent legislative minimum wage increases in the UK?

    I think we run the risk of it becoming a cop-out that makes raises of the minimum wage voluntary.

  16. indiana says:

    Waterboy say “The current minimum wage is not a living wage”

    I don’t think Labour wants the minimum wage to be a living wage either as they would have promoted a policy where the minimum wage is $50 per hour – which certainly would give anyone a living wage immediately and all the problems of the world are solved in single swoop of passing legislation.

  17. Gregor W says:

    I don’t think Labour wants the minimum wage to be a living wage either as they would have promoted a policy where the minimum wage is $50 per hour.

    @indiana

    Pretty facetious strawman. I mean, why not $1m an hour?

  18. Nathan Mills says:

    @Andrea. That’s a genuinely great idea. Would Labour be prepared to abolish Secondary tax? This policy is, and always has been, criminal. Why should people be punished for working more than one job? I’ve never heard a good justification for it. Ever.

  19. Quoth the Raven says:

    Darien said “Labour will stand firm on raising the minimum wage. Nothing has changed about that or our other policies around work and wages.”

    Sigh. As it should be obvious I abhor Marxism, but even Marxist economist Chris Dillow in a post appropriately entitled Against the Minimum Wage notes the obvious

    “The claim that the minimum wage doesn’t reduce hours or jobs is a radical one. It implies that the first rule of economics – that if you raise the price of something, people will buy less – is wrong”.

    As his masthead notes he is an extremist not a fanatic. So my question for Labour is do they agree with the radical claim or do they recognise the harm that can be done by as high a minimum wage as they propose, a minimum wage that as a percentage of our mean wage would be considerably higher than Australia’s or the UK’s.

  20. alex says:

    If the living wage is an idea whose time has come, then Labour should commit to passing something into law to that effect, rather than setting an aspirational target. An aspirational target is just another way of passing the buck.

  21. Tamaki says:

    Shearer truly has been an unfortunate experiment. His thinking is seriously woolly. The drop in middleclass earnings is a worldwide trend. It affects all major economies. Blame China and other emerging economies. The answer is innovation, growth, smart indsutries. This is something shearer has picked up on. What he doesn’t realise is that we need to get there and earn it before we share it.