Decades of weak productivity growth, a falling share of the pie being given to workers and a “race to the bottom” led by bad employers were all put forward by the Government as a basis for a new, controversial employment law tool.
But a new report claims the evidence for Fair Pay Agreements is an illusion, with the Government-appointed working group’s report at times verging on misleading claims.
The report, published by the New Zealand Initiative today, also dismisses Prime Minister Jacinda Ardern’s promise that only “one or two” of the agreements will be concluded before the election, arguing the way negotiations are likely to be triggered means she would have no power to control them.
The PM’s numbers on Fair Pay Awards are as robust as their numbers on Kiwibuild.
A Cabinet paper establishing a working group on the agreements argued that workers were taking a “smaller share of the pie” than in the past, that middle class incomes were being “hollowed out” and that New Zealand has a poor productivity performance.
But New Zealand Initiative chairman Roger Partridge and senior fellow Bryce Wilkinson write that the arguments put forward by the working group, which delivered their report in January, are “illusory”.
The Initiative’s report argues that while the share of gross domestic product (GDP) going to workers has fallen since 1972, the period of significant decline came before 1991, when the Employment Contracts Act (ECA) was passed, marking a major shift in employment relations.
Since then, in a period of enterprise employment bargaining, the trend has turned, the report claims. This, the authors say, undermines the argument for collective bargaining.
Excellent analysis. It destroys the purported reason for the FPAs. The real reason of course is to get more money into unions so unions can give more money to Labour.