Ideological debate stalks labour market

17:00, Jul 11 2013

The concept of a living wage is clearly engendering strong feelings among New Zealanders.

I've never had so much response as I did to last week's column, which argued that paying people a third more without any uplift in skills or labour will do nothing for New Zealand's middling productivity levels.

To recap briefly, $18.40 an hour, or 34 per cent more than the minimum wage, has been calculated by Living Wage Aotearoa as the magical number Kiwis need to earn in order to provide a basic living for their families.

Among the less flattering respondents to the piece was a Nelson Mail reader who opined that the country's most productive people are the ones who are paid the least. These folk evidently carry us "parasitic" so-called workers - commentators, economists, lawyers, stock market speculators and, curiously, security staff.

An expat wrote from Australia that employers who fail to pay living wages are contributing to crime, because their workers will be driven to illegal activity to supplement their meagre incomes. What's more, paying a non-living wage is apparently worse than slavery as slaves need a living wage in the form of food and shelter in order to work and be a tradeable asset.

Somehow I think the slaves of ancient Rome wouldn't have been averse to a few minimum terms and conditions. Comparing the minimum wage - because no-one in this country can be legally paid any less - to slavery does not exactly progress the debate.


A saner Hamilton correspondent's note was more helpful. He pointed out that social good is an important part of business decisionmaking.

No-one would disagree that poverty is bad for communities and business alike, and this column has previously argued that environmental and social outcomes need to become standard measures on corporate balance sheets.

Where people differ - and oh boy, do they differ - is how to achieve these outcomes.

New Zealand is facing another ideological debate as the Employment Relations Amendment Bill wends its way through the parliamentary process.

The un-catchily titled bill has the union movement in a lather because of provisions it says undermine the principle of collective bargaining. Key among these is the right to opt out if bargaining reaches a stalemate.

At the moment the law demands that collective bargaining continue until some kind of agreement can be hammered out, bar good reason. It is ultimately why Ports of Auckland's messy dispute with its wharfies has dragged on for the better part of two years.

Employers argue they need the ability to extricate themselves from such torturous and unproductive battles, and employment experts say under the proposed law they will have to meet a high test in order to get the requisite permission from the Employment Relations Authority.

But the bottom line is that the rule will severely clip the unions' wings. The employer could claim that any industrial action is a sign that relations have broken down and it should therefore be allowed to walk away from the bargaining table.

I am no unionist, and in my view the stance the Auckland watersiders have taken is not too far short of archaic. But the idea that organised workers' most basic arsenal could be neutralised does not sit comfortably.

Unions exist to look out for employees who have little other bargaining power. Likewise we have a minimum wage for a reason. These are labour market mechanisms which must be protected.

* Maria Slade is morning editor at the Fairfax Business Bureau.