When wages have been held down for a long period of time as they will always be under collective bargaining then when regulations are removed the supply and demand economics of wages will go back to the natural order. That being all workers won’t be constrained by meager CPI increases as so often gained under a collective agreement. In demand workers will be “allowed” to get increases of greater amounts than workers with skills that are not in demand. A job is not a birth right, it’s something that you supply skills for and get paid for doing. Not all workers are the same and there is no such thing as a homogeneous labour force, why would you even try and pretend it is because of an ideology.

If public service collective agreements gained the members the same increase every year as the MP’s then I would agree the concept works. But they never do. One group of public servants has had 7%-9% every year for the last 8 years and the rest get 2%-3%. If the Unions had any balls at all, if they had an integrity and real concern for the workers they simply wouldn’t accept anything less than the MP’s.

IMHO Collective bargaining is holding the wages in NZ down.

Not when National was in power during the 1990s it didn’t.

This is cited from No Right Turn

http://norightturn.blogspot.com/2004/04/statistics-whig-takes-issue-with-my.html

“New Zealand’s gini coefficient (a common statistical measure of income inequality) rose significantly between 1986 and 1996, indicating greater inequality. This happened no matter how you slice it, whether you look at individuals or households, market, gross or disposable income.
Over the same period, the percentage of total income going to the top three deciles of income earners rose while everybody else’s fell or stayed stagnant (Figs 2.15, 3.16, 3.17).”

Cheers

Obviously, there are problems at any extreme – too high wages could sens a company under or tempt it off-shore, more relevant with highly portable jobs than DarrenG’s job as a journalist.

The example you give above does not necessarily apply to manufacturing, for example. If the costs of business get too high (company’s own decision) in NZ, then they just go overseas. Result, no paycheck, let alone a higher one.

In reverse, your synopsis can apply to highly skilled/specialist jobs. Those jobs require appropriately skilled people and they do get paid well.

Where does the majority of NZ’s labour force lie?

Add in rising interest rates, high dollar, international competition and some employers just cannot pay more. NZ’s economy does not live in isolation. We are an export/import based economy and overseas prices and competition have a lot to do with costs to a business. I am sure most employers would like to pay their staff more, but not at the expense of their own income, or the viability of their company.

I believe that workers should share in the prosperity of a company, but also understand the reality if the compnay is struggling.

I also maintain that the one who puts up the money and takes the risks should get the biggest reward.

“So yes incomes have gone up. That happens when you have economic growth.”

Not necessarily true. There was net growth between 1980 and 1990, but real wages fell 6%.

Again, there is a labour market, supply and demand within the reuglaorly framework is what deterines the price of labour, which is not automaitcally tied to the borader economy.

Real average wage growth will only happen when a) more people have more work (from rising demand) and they have the power (through scarcity from low employment, collective action etc) to demand more pay for their work.

If you and your collegues are not being paid enough, don’t be a pussy and take it, stand up for yourselves. Why should your bosses get total control on what you are paid?

Its a market place, right, it should be that both the supplier and demnder have influence on the price. But you alone are just one person, you cannot influence the price of your labour, the bosses have all the power and you have to take what you are given. But if you join your union its not just you its everyone else standing beside you when you make your demands. And, together, you can balance out the bosses power, make a market of equals, and get the pay you deserve.

Also need to factor in the growth in consumer debt as this also impacts disposable income, perhaps now in a spectacular fashion.

Growing incomes is fine so long at cost of living doesn’t grow at the same/greater rate. Without having the data I suspect consumer debt/mortgages is having a massive impact on many, many NZ families.