SPEECH: The truth about wages in New Zealand

Address to union meetings 13, 14 & 15 May 2014

You’re here today to talk about your wages.

There are two things about today that make you different from most other workers, especially in the private sector.

First thing – you’re all in the union.

In the private sector in New Zealand, only about 9% of workers are in the union. And for many it’s not because they don’t want to be. It’s because our laws are so weak they don’t protect workers’ freedom of choice to belong.

So, all those other workers, most don’t ever get to negotiate their pay. They just get what the boss thinks they should have.

Last week, some new government figures came out about pay rises. Last year, nearly half the workforce (actually 46%) didn’t get a pay rise. More people didn’t get a pay rise last year than in the year before, even though we have been told things have got better.

Here’s the second thing – you’re not only negotiating, but you’re negotiating alongside each other, even though you’re from different workplaces and have different employers.

You’re doing multi-employer bargaining. But that’s about to get a lot harder if the National Party has its way.

The EPMU, and some other unions, have kept on doing multi-employer bargaining for the last 20 years. The Metals agreement has been one of the top agreements; it’s had a huge effect on what happens to wages, not only for you and your workmates, but actually for hundreds of other workers, most of whom don’t belong to a union.

This has happened because there are some employers who don’t want the union around but want to make sure they keep up with union rates of pay.

The EPMU has often led the way in collective bargaining. Whether it’s the Metals or the “5 in ‘05” campaign that lifted the wages of hundreds of thousands of workers, EPMU bargaining has made a difference.

But today I want you to know there are other things happening that will affect you and your pay. They’re not good things. They’re bad. And if they are allowed to carry on, they’ll be bad for you and every worker in New Zealand.

First, I want to tell you about what has been happening with wages and incomes in New Zealand for a while now.

I want to do this because the government wants you to believe you’re doing great when it comes to wages. They think you’re doing just fine.

But what they’re saying about wages in this country is wrong. They are being misleading. Sometimes, they’re telling outright lies.

Here’s what’s been happening:

• last year, wage rates went up on average 1.6%, about the same as inflation, which means no increase in real terms
• last 20 years, bottom 50% of earners – their wages either stayed the same or went backwards
• last 25 years, the share of the NZ economy that is used to pay wages has gone from around 55%% to nearer 40% at the end of the last National government; up by another 4% under Labour, and only up 1% under the whole of this government. This means more has been going to owners of businesses and properties
• Today, 20% of the workforce is dependent on Working for Families to make ends meet.

Far too many working people today are struggling to make ends meet. And the power bill keeps going up. Groceries still go up. But for nearly half the workforce, their pay doesn’t go up. And for a whole lot more, their pay rise is never enough.

Union pay rates mainly do a lot better.

The only other people who do much, much better are senior executives and chief executives, and they’re now complaining they get too much.

The government uses a figure for pay rises. They say pay has gone up on average 2.5%. They say this so it looks like pay is going up faster than inflation of about 1.5%. But it’s a lie.

What’s happened is this. The amount paid in wages has gone up because more part-timers are getting more hours. And some workers are starting to get overtime again.

But wage rates – the price of labour – is roughly the same as inflation for workers getting a pay rise. For those who don’t, they’re going backwards. And a lot are going backwards.

The story of the last 20 years is it’s been tough on workers. The last six years have been some of the toughest.

Wages in this country could be a lot higher – we’ve had economic growth and rising productivity.

Wages have got worse for so many because we no longer have a system that sets wages fairly.

And even though, it’s been hard to get decent pay rises for a long time, I’ve got news for you. The National government wants to make it a lot harder.

They don’t like you negotiating like this. They don’t want you to negotiate from a position of strength and get better pay rises than just about every other worker.

They have a law in Parliament right now that means your employer doesn’t have to act in good faith. The National Party law would mean your employer can say “I don’t care about having a decent union contract and decent rates of pay. If you want a pay rise, you come to me, but don’t involve workers from other workplaces”.

So, what you’re doing here today is important. But it could be the last time you do this. It could be the last time you get to negotiate from a position of strength.

You see, the National Party doesn’t care about workers getting decent pay rises. They never have. They never will.

A couple of years ago Bill English boasted that New Zealand’s low wages was a good thing.

Their job is to look after the rich folks. The big boys. The ones who can pay them big donations.

Labour has a better plan. We want to lift wages. We want to make sure the benefits of a growing economy are shared fairly.

Our project is to make sure there is more to go around. David Cunliffe and David Parker have put together a programme of changes to make a difference. A manufacturing policy that means we make stuff here, not send it offshore. And the stuff we make is higher value; we will help businesses invest in modern gear. And we will make sure it’s environmentally safe and friendly.

That’s what our manufacturing policy is about. And our forestry policy.

Our finance policy will make it easier for export companies so they won’t have to deal with a dollar that is constantly changing in value.

As a country, we won’t just raise interest rates so banks get richer; we will help kiwis save more here in a way that benefits New Zealand and New Zealanders.

We will make sure investment is encouraged in productive businesses, not property speculation.

In the workplace, we will make it easier to negotiate with your employer. We will protect multi-employer bargaining like you’re doing now. This government’s anti-worker laws will go.

We will look at how more workers can be covered by negotiated agreements so that we don’t have half the workforce missing out on a pay increase every year.

We want all workers confident they can deal with their employer openly and honestly, having a say whether it’s on wages or work safety, working with their employer to make the place better and with the employer recognising their workforce has a stake in the success of the business. A stake that should be recognised with steadily improving pay and conditions.

This is what fairness at work looks like. This is what happens in a fair market economy.

Good luck for your negotiations. Make sure it’s not your last.

—