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A proposed Labour-Green-Mana(-NZ First?) agenda – part toru

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An incoming Labour-Green-Mana(-NZ First?*) coalition government will have much work to do – especially in it’s first three years.

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Continued from:  A proposed Labour-Green-Mana(-NZ First?) agenda – part rua

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new-zealand-national-party_3382 adapted 2014

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An incoming Labour-Green-Mana(-NZ First?*) coalition government will have much work to do – especially in it’s first three years.

In the six years that National has been in power, they have passed many odious and often repressive pieces of legislation. Labour and the Greens have already committed to repealing some of these laws and policies.

As a Labour-led coalition government addresses growing problems of child poverty; income inequality; a shortage of decent, affordable housing; and chronic unemployment, a legislative programme will demand a long list of progressive reforms.

In no particular order;

The 90 Day Employment Trial Period

An amendment to the Employment Relations Act 2000, Section 67A, allows  employers to sack – without just cause or a chance for an employee to improve performance – within a 90 day period.

It gives unbalanced power to employers who can blackmail an employee or get rid of them at the slightest whim. It also makes workers less willing to be mobile in the workplace. Why change jobs at the risk of being fired within 90 days of taking up a new position?

When the 90 Day Trial period was first introduced in April 2009, it applied only to companies employing 19 staff or less.

By April 2011, this was extended to all companies regardless of staff numbers. (A typical National strategy; start small – then encompass an entire sector.)

Has it helped  generate more jobs as National claimed it would?  Evidence suggests it played very little part in creating employment, and indeed unemployment went up after both legislative changes,

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Source

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So aside from empowering employers and disempowering workers, what exactly was the point of enacting this piece of legislation? Because it seems that an awful lot of people lost their jobs through this legislation. As one media report stated,

It is not known how many workers were dismissed during the trial period, but the figures revealed 27 per cent of employers said they had fired at least one new employee during or at the end of their trial.

This means at least 18,000 people lost their jobs in the first three months of employment last year, with the actual figure likely to be much higher.

And precisely how does this raise wages, as per Dear Leader’s past promises (see below)?

This law gives too much power to one party in the Employer-Employee relationship, and it has no place in a fair-bargaining workplace.

On 17 October 2010, Labour promised that this law would be scrapped by an incoming Labour-led government. I hope the current Labour leadership has not resiled from this commitment.

Ports of Auckland Dispute – Shipping Lines Price Fixing

“The average income has been about $90,000, so it hasn’t been a badly-paid place. But the problem is flexibility when ships arrive and when staff get called out, how they can cope with that.” – John Key, 12 March 2012

Putting to one side the myth of  POAL maritime workers earning $90,000 – so what?

Even if it were true (which is doubtful – POAL has never released the workings of how they arrived at that sum, despite requests), isn’t such a good wage precisely what Dear Leader John Key has been advocating?

POAL management sought to reduce costs;  casualise their workforce; and compete with Ports of Tauranga for shipping business. Unfortunately, competing on costs would, by necessity, involve driving down wages.

This appears to have been motivated  by a high degree of price-fixing by shipping cartels, as was pointed out by the Productivity Commission in April 2012,

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Full story

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Rather than supporting the workers, Dear Leader bought into a situation where international shipping companies were playing New Zealand ports off against each other, to gain the  lowest possible port-charges.  Even local company, Fonterra, was playing the game.

Here we have a situation where New Zealand workers were enjoying high wages – something John Key insists he supports – and yet he was effectively allowing international corporations to create circumstances where those wages could  be cut and driven down.

As with the “Hobbit Law”, our Dear Leader appears to pay more heed to the demands of international corporate interests than to fulfilling his pledges to raise wages.

An incoming Labour-led government should immediatly implement the Productivity Commission’s recommendation,

“The commission recommends that New Zealand require shipping companies wishing to collaborate to fix prices or limit capacity to demonstrate to the Commerce Commission that there will be a public benefit which will outweigh the anti-competitive effects.”

This problem must be addressed by an incoming government. It is simply intolerable for foreign corporations to be dictating labour laws; industrial relations; and wages, in a supposedly sovereign nation.

Youth Rates

From 1 May 2013, National  re-introduced a new Youth Rate. The rate would be set at $10.80 an hour [soon to be increased to $11.40 per hour]– compared to the then- minimum rate of $13.50  an hour  [soon to be $14.25 on 1 April this year], and would include 16 to 19 year olds.

John Key stated,

“For a lot of employers, they will go out there and say, ‘I’m going to give somebody a go that’s been in the workforce before’ and so the balance is against that younger person. That’s very disheartening for them – they are good young people, they just want a chance.

So I think it’s got to be seen in perspective – the vast overwhelming bulk of youngsters actually won’t go on a starting out wage.”

Which conflicts with John Key’s other assertions that he wants to see wages rise;

We think Kiwis deserve higher wages and lower taxes during their working lives, as well as a good retirement.” – John Key, 27 May 2007

We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.” – John Key, 29 January 2008

We will also continue our work to increase the incomes New Zealanders earn. That is a fundamental objective of our plan to build a stronger economy.” – John Key, 8 February 2011

We want to increase the level of earnings and the level of incomes of the average New Zealander and we think we have a quality product with which we can do that.” –  John Key, 19 April 2012

Youth rates won’t achieve that goal, Mr Prime Minister!

There is no good reason why Youth Rates should actually create new jobs. More likely, a drop in youth wages will simply create more ‘churn’ in employment/unemployment numbers.

As David Lowe, Employment Services Manager for the Employers and Manufacturers Association, inadvertently  revealed,

Without an incentive an employer with a choice between an experienced worker and an inexperienced worker will choose experience every time.”

As Lowe admitted – there is no new job for the  younger worker. S/he is merely displacing an older worker.

As it is, figures from Statistics New Zealand’s  Household Labour Force Survey showed that unemployment for young people had already fallen by the March 2013 Quarter – a full two months before Youth Rates came into effect;

In the year to March 2013, there was a large fall in unemployment for people aged 15–24 years (down 10,500). This fall can be largely attributed to a decrease in unemployed 20–24-year-olds (down 11,200). This was an atypical fall in unemployment, as the number of people unemployed for this age group usually increases during March quarters. The unemployment rate for people aged 20–24 years fell 4.1 percentage points to 10.9 percent – the lowest rate since the September 2009 quarter.

The employment rate for 20–24-year-olds rose over the year to March 2013. There was also an increase in the number of people aged 15–24 years not in the labour force over the year. Behind this was a rise in the number of young people outside the labour force who are studying (up 25,000). The number of both 15–19-year-olds and 20–24-year-olds in study rose –  up 16,200 and 8,800 respectively.
NEET rate declines

In seasonally adjusted terms, the NEET (not in employment, education or training) rate for youth (aged 15–24 years) decreased 1.5 percentage points, to 12.5 percent in the March 2013 quarter. This is the lowest youth NEET rate since the September 2011 quarter. The NEET rate for people aged 20–24 years fell 2.4 percentage points to 15.9 percent.

As the global economy continued to improve; the Christchurch re-build moved into high gear; and demand for our exports increased, unemployment was bound to eventually fall.

In which case, paying young workers a lower wage than their older counterparts was nothing more than a “gift” handed to employers.

As such, it has no place in a modern, civilised society. Youth rates are exploitative and demoralising. They also drag adult wages downward, as employers can opt for cheaper labour, as  David Lowe stated above.

In October 2012, Labour’s then-Leader, David Shearer condemned youth rates,

“It’s not going to create jobs by driving down wages.  These people are going to leave and go to Australia.

We need an economy that provides decent, secure jobs and good incomes and where young people have hope and opportunity, not the low-wage vision promoted by National.”

An incoming Labour-led government must repeal this exploitative legislation.

Continued at:  A proposed Labour-Green-Mana(-NZ First?) agenda – part wha

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(* At this point in time, NZ First’s leader, Winston Peters,  has not indicated which bloc – Labour or National – he intends to coalesce with. As such, any involvement by NZ First in a progressive government cannot be counted upon.)

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Above image acknowledgment: Francis Owen

Continued at:  A proposed Labour-Green-Mana(-NZ First?) agenda – part wha

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References

Parliament Legislation: Employment Relations Act 2000, Section 67A

NZ Herald: Will the 90 Day trial period make a difference?

Beehive:  90-Day Trial Period extended to all employers

Trading Economics: New Zealand Unemployment Rate

Waikato Times: Thousands sacked under 90-day trial period

Radio NZ:  Labour would scrap 90 day trial – Goff

Fairfax media: Calls to end shipping lines’ price fixing

Fairfax media: Jackson pulls back from port comments

Radio NZ: PM defends lower youth pay rate

Scoop media: Starting-out wage will help young people onto job ladder

Statistics NZ: Household Labour Force Survey: March 2013 quarter

TV1 News: Employers back youth ‘starting wage’

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12 Comments

  1. Gosman says:

    “It gives unbalanced power to employers who can blackmail an employee or get rid of them at the slightest whim. It also makes workers less willing to be mobile in the workplace. Why change jobs at the risk of being fired within 90 days of taking up a new position?”

    Do you happen to have any statistics that support this belief?

  2. Tiger Mountain says:

    Well Gozzie,
    the ministries concerned have stated that they do not keep stats on the specific effect of the 90 day fire at will Act, various unions have some data, there is data from WINZ and the HLFS about churn and turnover.

    And there is significant anecdotal data about young workers not being permanent till day 91 and having no rights till then. Like my son. Well qualified, underpaid, sitting by the phone, no agreement. Older workers don’t want to move on etc. Do your own research. We do not make this stuff up.

    • Gosman says:

      Do you have the data on churn and turnover then?

      • Gosman says:
        March 10, 2014 at 5:47 pm

        Do you have the data on churn and turnover then?

        And if I found the data, Gosman, would it change your mind?

        Or would you deflect on to some other point? Or ignore it altogether?

    • Intrinsicvalue says:

      “Do your own research. We do not make this stuff up. ”

      It is Frank who has made the assertion. It is up to Frank it back it up.

      • Gosman says:

        It should be pretty easy to find out if the assertion is accurate or not.

        Here is an article I found just with a simple Google search with the search term ‘turnover rates in new zealand’

        http://tvnz.co.nz/business-news/high-staff-turnover-rates-should-ring-alarm-bells-5606476

        The article states that in 2013 at least staff turnover in New Zealand was high and has been for a while. This does not support the view that the 90 day trial law has made people less inclined to change jobs.

        • YogiBare says:

          Gosman,
          Next you will be asking FM to prove white is white and not actually the new black.
          Surely his statement is self evident…
          “It gives unbalanced power to employers who can blackmail an employee or get rid of them at the slightest whim. It also makes workers less willing to be mobile in the workplace. Why change jobs at the risk of being fired within 90 days of taking up a new position?”
          I use to have a lecturer who was fond of saying “Common sense, so called because it’s so rare”, I suspect he would be screaming this at you right now.
          Tiger Mountain says: “the ministries concerned have stated that they do not keep stats on the specific effect of the 90 day fire at will Act,” if true, perhaps they have more common sense than you and know perfectly well just what those stats would reveal.

          • Gosman says:

            If Frank was correct then the turnover rate for staff would be low or at least lower than it was prior to the 90 day trial law coming in to effect. Yet this does not seem to be the case according to the data I have seen. This would suggest Frank’s opinion on this matter is wrong.

            • YogiBare says:

              Would this data be the infamous “Lies, damned lies, and statistics” per chance?
              We know how our current government can manipulate figures to count a person working one hour of volunteer work as employed.

        • Gosman says:
          March 11, 2014 at 9:56 am

          It should be pretty easy to find out if the assertion is accurate or not.

          Here is an article I found just with a simple Google search with the search term ‘turnover rates in new zealand’

          http://tvnz.co.nz/business-news/high-staff-turnover-rates-should-ring-alarm-bells-5606476

          Indeed, Gosman.

          But note the date on your link: October 07, 2013

          There is already a slight drop in HLFS unemployment (but a commensurate increase in under-employment) as a global economic recovery influences our own economy.

          (Though that drop in unemployment is doubtful as under-employment rises. If you work one hour per week, whether paid or unpaid, you are officially considered “employed”.)

          Therefore, an increase in churn under current economic circumstances is unremarkable. Your attempt to link it to the 90 Day Trial law fails on that score – by two years.

          I note that you’ve made no reference to the New Zealand Unemployment Rate chart above.

          Why is that?

          Because it does rather does demonstrate the point I made (and which you and IV studiously ignored).

      • It is Frank who has made the assertion. It is up to Frank it back it up.

        Ditto for what I said to Gosman; would it change your mind?

        Of course not, IV. You’d simple launch into another of your wild side-stepping; deflection; mis-representation; and outright fibs. You’d find 80 year old stories on the internet or cherry-pick Treasury data that is so misleading as to contsrue blatant dishonesty.

        You have ‘form’ on this style of mendacity.

        What is patently obvious is that you haven’t read or taken in what I’ve already written. Because you haven’t addressed the points I’ve already raised.

        Try addressing what I’ve raised before raising your red herrings.

        • Gosman says:

          Whether you convince IV or myself is irrelevant. You at least will have backed up your argument with data and can be satisfied that, as far as you are concerned, it is based on sound information. Unfortunately for you it currently isn’t based on anything more than just your opinion that the 90 day trial MUST have reduced staff turnover due to people being afraid to leave their current roles for a new one and some bizarre linkage to unemployment rates. I have shown you that NZ turnover rates are currently high and seem to have been that way for a while. There doesn’t seem to be a move in the direction you suggest MUST have occurred.

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