Labour’s 1970s style industrial relations policy

The are getting what they paid for when they made Andrew Little the leader of the Party – a return to 1970s style national awards.

The Herald reports:

His party is promising to lift the by 75c an hour to $16.50. Depending on economic conditions, it wants to eventually lift the minimum wage to two-thirds of the average wage. The average wage is set to rise to about $30.60 next year, meaning Labour wants to lift the minimum wage to at least $20 over time.

Two-thirds of the average wage is what the CTU has been demanding. Currently the minimum wage is 0.52 of the average wage which is basically the highest in the developed world.  Some comparisons:

  • NZ 0.52
  • Australia 0.44
  • Germany 0.43
  • UK 0.41
  • Canada 0.40
  • US 0.25

A minimum wage at two thirds of the average wage would kill a huge number of jobs. Minimum wage rises at lesser levels do not, but what matters is how many jobs get impacted and you work this out by comparing it to the median wage. Labour’s policy would see the minimum wage at 85% of the median wage. Now think about that – it means the most junior unskilled job in New Zealand would only get paid 15% less than what the median worker is getting.

Currently the minimum wage is at 67% of the median wage. That is the level at which it should remain. In fact I’d link to to the median wage at that level, so politicians would then realise the way to increase wages is through productivity gains, not laws.

The party will also roll out a for all core public sector workers at a cost of $15m, and will eventually extend it to all contractors.

So Labour will let a Reverend in Lower Hutt decide for them how much public servants should be paid.

Labour also wants to introduce Fair Pay Agreements, which set a sort of minimum standard for pay and conditions within each industry.

Little said: “These will stop bad employers from undermining wages and working conditions to undercut good employers.

“Fair Pay Agreements will lay out the basic pay and working conditions in an industry, and prevent a race to the bottom.”

This is the most terrible part of their policy. It is what the unions have wanted for the last 40 years – a return to national awards. Ignore the Orwellian name they have given them.

Basically Labour is saying they will force every employer in an industry to pay the same wages, so there can be no competition between employers.

Hard to think of a policy that will do more to damage New Zealand’s economy than this one. It is a policy that takes no account of the differences between big and small companies up and down NZ. Labour will force the small cleaning company in Invercargill to pay the same wages as the huge multinational company based in Auckland.

Labour has dropped its 2014 policy of repealing 90-day trial laws. It will keep trial periods but will give employees recourse if they are unfairly sacked during this time.

No they have not dropped their policy. It is another Orwellian rebrand. The entire point of a trial period is that you can terminate it without fear of legal action. That is why it is a trial. Labour’s policy removes that ability.

It will establish a “referee service”, which has power to reinstate workers

So again it totally undermines the purpose of a trial period which is to allow the employer to establish if someone works out without risk of being stuck with them if they are not up to it.

Overall this is an appalling policy from Labour that grants their union overlords pretty much everything they want. National Awards being the Arkenstone in their treasure chest as it will also force everyone in an industry with one to fund the union, so it brings back de facto compulsory union membership or funding.

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