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 . 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. 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.

Comments (19)

Login to comment or vote

Add a Comment

%d bloggers like this: