Wages
Last week Tane at The Standard said:
But in a capitalist system any benefit from productivity increases goes directly into the pockets of business owners. You need a mechanism to translate that into wages. And that mechanism is decent employment protections and a unionised workforce that has the strength to bargain decent wage increases.
I found that statement interesting. In some ways it is not surprising as Tane is employed by a union – of course he would say or think that. But what is revealing is that this seems to be the only way he thinks wages can increase. He over looks:
- Business owners voluntarily give staff pay rises. This is not uncommon in smaller businesses. I have worked in a small business where the owners hated the fact they could not pay the staff more, but once it was more profitable they increased wages.
- Individual staff who perform well get increased wages in recognition of their good performance.
- Staff are paid more to retain them in a competitive market
- Staff get promoted and get paid more for taking on more responsibility
- Staff are shareholders in a business
And so on. Now of course the above do not apply in every case. I am not saying every employer is a good employer who will pay reasonable wages. Unions make a lot of sense for some staff. But that is very different to generalising that a unionised workforce is how you increase wages. I would actually argue that a focus on collective contracts can sometimes hold wages back as employers have to pay bad staff much the same as good staff. The classic example is teaching – I think the best teachers should be on $100,000+ but there is no way that will happen until you have performance pay so that the bad teachers are not paid the same.
March 23rd, 2009 at 5:39 am
Unions biggest issue is their unwritten charter to protect members who are in the wrong job, company or trade.
That is seriously debilitating their own ability to move with the times.
Big factories will stand idle, with capital equipment unused. The market moved on and flexibilty is the key.
Over time Unions have no function in a deconstructed technological society.
March 23rd, 2009 at 6:44 am
Apologies in advance for link-whoring, but remember that this is the same Tane who, as one of the most prolific contributors to The Standard, tried to push the line/lie (make your own choice as the which applies
) that John Key wanted to cut New Zealanders’ wages. Key’s speech to the CTU, an important extract of which is included in the post that follows makes a complete mockery of that. Yet despite evidence to the contrary, neither he or nor his brethren will resile from their initial claim.
It’s one thing to make a mistake, own up to it and apologise, but to persist with the line/lie when it clearly shown to be wrong is dishonest, petty and irresponsible – but then why should we expect anything else?
http://keepingstock.blogspot.com/2009/03/admit-you-were-wrong-lads.html
March 23rd, 2009 at 7:08 am
Yes, the exact same Tane. I think he has so little to work with he chooses to stick to the same lies in case somebody believes him.
Unions would be fine organisations if they weren’t captured by the left who seem to think it is a natural progression from being failed student politicians. Why is it that the kids that were picked on at school all become hardcore lefties?
March 23rd, 2009 at 7:20 am
Either that Clint, or it’s the age-old tactic of repeating the lie so frequently that it gains traction.
When I screw up (not an infrequent occurrence!), I take ownership and apologise – but it seems that the left don’t do “apology” – they see it as a weakness, when it is actually a positive.
March 23rd, 2009 at 7:33 am
Not much use for unions these days. Tane is living in the pass.
March 23rd, 2009 at 8:12 am
While Tane has plenty of history to guide him. Clearly his guiding light is an economy based on a 1950s style Soviet model. Wage rates decided centrally with productivity and profit excluded from the calculation.
And of course its easier for the manufacturers too … any colour you want as long as it is black.
Tane is irrelevant to be political debate … much the same as Labour.
March 23rd, 2009 at 8:22 am
Tane thinks everybody is a drone like him in that you just turn up (eventually) put in a token effort, have cigarette break after cigarette break and think your wages should automatically increase after pressure from the Union.
March 23rd, 2009 at 9:02 am
A classic example of unionised labour keeping wages down would be the junior doctor workforce. The salried workforce earn on average half as much as what a locum doctor would earn doing the same job. Salaried doctors have their union argue their employment pay and conditions. The locum doctor is on their own and will be remunerated at market rates. To make matters worse, while the doctors union were engaged in negotiations, Helen Kelly of the CTU openly criticised them for going too far!
Surely Tane needs to think outside the square. What about an equity component to workers pay. If workers help improve the company, then the share value would increase and the worker would be able to extract more value from the business. However, I forget that unionist are simpletons who cannot think so laterally.
March 23rd, 2009 at 9:07 am
Unions have one use, which is where you work in an industry that has a single monopoly employer, has no correlation between productivity and profitability, and where that monopoly employer artificially holds down wages beyond what the consumers of the service would happily pay.
Meaning, of course, any industry where the employer is the government. It is no coincidence that the government sector is the most unionised. The average kiwi, if they needed to pay for schooling directly, would pay far more than the government is prepared to, and would pay (good) teachers far more than the government is prepared to. Must be hard for the PSA, supporting Labour as they do, when it comes around to explaining to their members that if National’s or ACT’s policies were followed they’d all get a pay rise. Head in the sand works just fine I guess.
March 23rd, 2009 at 9:25 am
Inventory2, I do not see how saying something else at another speech undoes what he said to a reporter?
March 23rd, 2009 at 9:51 am
racer – what Key said to that reporter was a mistake, which he corrected. Tane and co beat it up for all it was worth.
March 23rd, 2009 at 10:47 am
Mistake in the sense of a misspeak (which pretty much everyone acknowledged at the time), not mistake in the sense of “I wish I hadn’t told people that I eat babies for breakfast, and now they won’t vote for me”.
March 23rd, 2009 at 10:55 am
The problem with unions is that they get stuck in the “us-vs-them” or “workers-vs-bosses” mentality and lose sight of the big picture. OTOH, the problem with some bosses is that they lose sight of the long term business goals (which are generally served by retaining and training workers) in favour of short-term enrichment.
I read an interesting book a while ago about a Brazilian manufacturing company, SemCo. It’s the story of a young CEO who instituted a kind of democratic workplace. The workers can see the salaries of the bosses (all the way up to the CEO), and can vote to reduce those salaries. This helped the union and the workers see much more clearly the connection between what they were doing and the survival of the company, and made them much less antagonistic — even volunteering for wage cuts when the economy took a dive in the ’90s.
March 23rd, 2009 at 10:59 am
Exactly PaulL – it seems as though Tane, Clinton “Steve Pierson” Smith, Irish Bill and co were the only ones who didn’t acknowledge it. Heck – it wasn’t even something that Labour majored in on during the election campaign, which should be an indication of just what a beat-up it is.
March 23rd, 2009 at 12:30 pm
“But in a capitalist system any benefit from productivity increases goes directly into the pockets of business owners. You need a mechanism to translate that into wages”
Straight out of “Marxism for Dummys”
March 23rd, 2009 at 2:39 pm
“….But in a capitalist system any benefit from productivity increases goes directly into the pockets of business owners…..”
Oh come ON, every study of this has showed that around 70% is captured in higher workforce remuneration.
March 23rd, 2009 at 2:47 pm
Here is THE study on the connection between productivity growth and wages:
http://www.nber.org/feldstein/WAGESandPRODUCTIVITY.meetings2008.pdf
March 23rd, 2009 at 2:56 pm
In capitalism’s defence, the productivity also translates into innovation – wider availability of new goods produced more efficiently. A cleaner today can generally afford to have a television, microwave oven, etc. 30 years ago, possibly not. Assuming we’re talking about workers in developed countries, that is. Add to that things like advances in medicine driven by private pharmaceutical interests, safety innovations driven by competitive automotive markets, and the real-world wealth of a wage worker increases whether or not their pay does.
March 24th, 2009 at 8:24 am
Oh yes Repton! The US vs THEM “struggle” is what gets the unions juices flowing. They love creating this sort of debate, which Labour also engages in. You create imaginary groups in society and then pander to them so much so finally the left can say only they “represent” them. Tane spends days in his “office” thinking of new groups to invent
Bisexual clowns anyone?