Minimum wage and potential unintended consequences

One of the biggest risks with changes promised by the incoming Government is the rapid increase of the minimum wage, from the current 15.75 per hour to $20 by 2021.

There’s no argument that many workers struggle on low wages, so increasing them is a laudable aim, but there is real potential for unintended consequences, and it won’t be known what impact they might have until they happen.

Increasing wage costs for businesses means those costs of goods and services will need to be passed on to customers. It is also likely to result in lower employment to try to reduce costs where recovery of the costs isn’t possible.

The biggest problem may come the pressure on all wages to rise. Those currently earning $3-5 above the minimum wage will still want to be paid more.

And there are signs of this pressure already – NZH: Minimum wage threatens economy: Employers and Manufacturers Association

Campbell said businesses would be worried by what the cost increases would mean for them.

His comments are starkly contrasted by those of First Union, whose general secretary Robert Reid said in a statement the incoming Government acknowledged the huge economic pressure working people – especially low paid workers – had been facing for the last decade.

“Today marks a sea change. We now have a Government showing respect for working people.”

The union was especially pleased to see the minimum wage will move to $20 per hour by 2021.

“Business leaders often say the main thing they need is certainty. This announcement gives them that certainty and now they need to start factoring in significant wage increases for all their workers over the next three years.”

Reid added that the era of 2 per cent a year wage offers was over and employers would need to be looking at annual increases of about 8 per cent to stay at or ahead of minimum wage rises.

It was obvious this would happen – but an increase of all wages by 8%, well ahead inflation, will push up inflation, and possibly increase unemployment.

There is no way of knowing how much bumping up the minimum wage will have, but unintended consequences are certain, it’s just unknown to what degree they will impact on employment and the economy.

Q+A: Ardern, English, Shaw & Peters interviews

A good chance to see how the leaders of the four largest parties are shaping up and holding up as the campaign heads into it’s last week.

Which party will form New Zealand’s next Government?

Political Editor Corin Dann interviews the leaders of the four biggest parties: National leader Bill English, Labour leader Jacinda Ardern, Green party leader James Shaw and New Zealand First leader Winston Peters.

Host Greg Boyd is joined on our panel by Dr Claire Robinson, Robert Reid and Fran O’Sullivan.

Why do they keep including obviously biased people in their panel?

I hope they give disclosure about Reid. He is general Secretary of First Union, and has openly supported Labour policy – Press Release: First Union

Labour’s employment policy gives working peope something to vote for

The 27,000-strong FIRST Union has described Labour’s newly Employment Policy as giving its members something to vote for.

“FIRST Union represents a large number of low paid and vulnerable workers,” said Robert Reid, General Secretary of FIRST Union.

“The current employment relations laws are stacked against low paid workers and their unions meaning many working people are unable to make ends meet from one week to the next.

“It is pleasing to see the Labour Party putting forward policies that will reverse all of the anti-worker changes made to the Employment Relations Act by the National Government over the last 9 years, as well as promoting longer term policies that will prevent the race to the bottom on wages.

“Together with Labour’s health, housing and education policies this employment relations policy shows a stark difference to the policies of the current government that have failed working people over the last 9 years,” said Reid.

English started under pressure but became more assured as the interview progressed.

Ardern look far less confident than before, perhaps a hard campaign is catching up on her.

James Shaw throws a CGT spanner in Labour’s works:

Interestingly no poverty in his priorities.

And a twist from Winston:

Unions using interns

The Labour Party got most of the limited attention given by the media to the intern issue. This is because it was clearly a Labour Party scheme – Andrew Kirton eventually acknowledged it was an ‘Auckland Labour Party’ scheme, but that isn’t a separate party.

But unions were intertwined.

Andrew Little has a union background but claims to have had no knowledge of the scheme, apart from hearing about the idea at the start of the year, and finding out an unauthorised scheme was  up and running in May, and then finding out in mid-June it had got out of control so he stepped in as soon as he knew. Or something.

Matt McCarten has been what someone described as a ‘voluntary scapegoat’. He certainly seems to have been a major player in the scheme, while working for Andrew Little in Auckland, while Little knew nothing about it apart from what he knew.

Before being recruited by David Cunliffe as the Labour leader’s chief of staff in 2014 McCarten was secretary of the Unite union since 2005.

Despite working for Labour for three years McCarten still seems to have kept his @unite.co.nz email address. He registered the movementforchange.org.nz domain using it on 15 May, when he was still working for Little. And he registered it under a Unite Union office address.

McCarten registered campaignforchange.org.nz five days later using Little’s Auckland office address (postal and physical).

Unions were a major part of the plans for financing the intern scheme. A document obtained by Newshub had details (this is claimed to be an unfulfilled plan):

LabourInternDocumentFinance

This refers to contracts with the Unite and First unions.

The project was said to be managed by “the project manager in paertnership with the Labour Party, CTU (Council of Trade Unions) and AUSA (Auckland University Students’ Association).

The document detailed three parts to the campaign:

LabourInternsManagement

So an aim was to recruit and support volunteers for union GOTV (get out the vote) campaigns. Unions were involved in trying to get votes for Labour last election too. I’m not sure that all their union members would be happy with that.

More on money:

LabourInternsMoney

But when this document was published unions distanced themselves. Newshub:  Labour’s botched intern scheme planned on union funding

Council of Trade Unions (CTU):

CTU national secretary Sam Huggard says the plan was never shared with them, and the CTU actually turned down a request to manage the interns.

“We’ve never seen this document and the CTU was not involved as described. I presume this was an early proposal document of some sort,” he told Newshub.

“Matt [McCarten] asked CTU to run the worker aspect of Campaign for Change on the 12th of May this year, but we declined.”

Note “the CTU was not involved as described”. That doesn’t rule out being involved, it leaves many possibilities.

The document describes “member recruitment contracts” with the Unite and First unions.

First Union:

Robert Reid, General Secretary of First Union, said it had not provided any funding: “There’d been discussions but no formal request.”

Unite Union:

Gerard Hehir, Secretary of Unite, said: “We had some discussions with Matt but there was no funding and no promises.”

Neither ruled out a contract or agreement for them to pay on recruitment results.

Despite Hehir’s statement there (that Newshub article was dated 23 June 2017) on the same day NZ Herald reported in Mystery funder behind Labour intern programme – and party doesn’t know who quotes Unite’s National Director Mike:

“Matt is ambitious, and where there is a will there is a way is often his attitude. He may have tried to reach too far in this case. We thought there were positives and are a little bit sorry to see it’s all fallen on its face.”

Treen said the union had taken part in the programme and planned to use the interns for a programme to enrol Unite members, but had not provided any direct funding.

So Unite and First both say there was no direct (up front) funding but Treen says Unite planned to use foreign students to recruit union members with the proceeds to be channelled into funding a Labour party election campaign.

Reid and Hehir may have been technically correct if they hadn’t yet handed over any money to Labour’s campaign.

This suggests a plan for unions to use foreign workers to recruit for them, with the bounty going to Labour, rather than using New Zealand workers earning wages for themselves.

Unite Union’s Mike Treen said unpaid interns were common around the world. “It’s stupid to call it ’employment.’ I know the difference between people being taken advantage of and volunteers and being looking to be political agents in the long term. It was probably a very useful experience for many.”

It may be common use to use unpaid interns to campaign for political parties, but is it common to use unpaid interns to work on union recruitment at the same time?

The document refers to Unite/First contracts to “recruit 800 additional members – $40,000”.  That’s $50 per recruited member.

This sounds like an odd campaign – targeting people trying to get them to vote for Labour and join a union at the same time.  It’s either just a crazy mixed up scheme, or it could be a way of trying disguise campaign donations to Labour as commission for services rendered – by foreign volunteers.

Andrew Little said “Somebody had an idea earlier this year that we could get some people down here from other parts of the world. It looks to me like it’s gotten wildly out of control and people have found they can’t manage it” – Intern scheme got ‘wildly out of control’ – Little.

McCarten’s plans as “fantasy world stuff” and an “embarrassment” – see McCarten may have left Labour in debt after intern scheme (27 June)

In this I think Little’s comments are credible. I can imagine he might have turned a blind eye to McCarten bringing in foreign interns to campaign for Labour, but I can’t imagine him or Labour’s head office agreeing to including union recruitment in the same scheme.

But the Labour Party in Auckland seems to have been very much involved in the scheme, possibly with some Little/Head Office plausible deniability distancing from  the machinations of the scheme.

Auckland Labour’s NZ Council representative Paul Chalmers (also with a union background) has “stood down” from his party responsibilities so the inference is that he was involved with McCarten and at least Treen on this.

A bad look for some Auckland unions and the Labour in Auckland at least.

There are plenty of questions still unanswered by Little and Kirton.

Union wants 40% wage increase

Perhaps unable to negotiate higher wages with employers the FIRST union wants the government to do their work for them by increasing the minimum wage 40% to $20.65 by 2018.

One News reports Union wants a 40 per cent minimum wage boost.

The FIRST union, which advocates for 27,000 finance, industrial, retail, stores and transport workers wants the current rate of $14.75 increased to $20.65 in 2018.

It wants the government to hike the rate in three steps, starting with a $1.75 rise to $16.50 this year.

“A 25 cent or 50 cent increase won’t cut the mustard for working people and their families,” said the union’s general secretary Robert Reid.

He says the increase in the wage would help boost and cut inequality.

Reid wants these stepped changes to the minimum wage:

  • Current – $14.75
  • This year – $16.50
  • 2017 – $18.46
  • 2018 – $20.65

Perhaps this is in response to and despair at Labour announcing they want to pile money into free tertiary education, which is targeted at a different demographic to many of the First union members.

Union members are not seen as being in the magic middle New Zealand vote bucket.

FIRST Union (Wikipedia):

FIRST Union is a national trade union in New Zealand that was formed on 1 October 2011 by the merger of the National Distribution Union and Finsec.

FIRST has a membership of more than 26,000 and is affiliated with the New Zealand Council of Trade Unions. It is also affiliated to various international federations through its five sectors; Finance, Industrial (Textile, Clothing, Baking, Wood, Energy), Retail, Stores (distribution and logistics) and Transport.

FIRST is not affiliated with the New Zealand Labour Party, but former NDU secretary Laila Harré did serve as leader of the Internet Party in 2014.

 

New Zealand “third highest” material standard of living

“Most Kiwi families have a high standard of material wellbeing relative to our international peers.”

There are frequent claims that New Zealand is becoming a basket case and that the standard of living is terrible for most of us. For example Union leader Robert Reid on Q & A on Sunday:

“New Zealand is not doing well.”

“When are working people going to catch up?”

“There’s not those opportunities and yes you can always find one individual who’s gone from the child of a widow in a state house and perhaps become a banker but it’s not about one individual, it’s about where most people are”.

“Working people don’t even have enough money every week to be able to buy their food and their rent.”

“This is the problem in this country, we’ve actually got the elite represented by the Government and Michele (Boag) with where most working people are.”

I know that it’s financially tough for a significant number of people, but I also see examples of working families who are managing ok. Consumerism seems to be surviving successfully.

And a study claims things are not all bad, reported by Stuff in New Zealand has world’s third-highest material standard of living – report

Researchers at public policy research institute Motu used data from 800,000 households across 40 countries to create the new measure for wellbeing, which took into account homes that included a 15-year-old.

The measure is based on ownership of possessions such as books, internet connections, whiteware and cars, as well as the number of bedrooms and bathrooms in a house.

MOTU Wellbeing IndexMotu senior fellow Dr Arthur Grimes said the results should call into question the widespread negative impression of living standards in New Zealand compared with other developed countries.

“Our results show New Zealand is still a great place to bring up children, at least in material terms.

“Not only do we have wonderful natural amenities, but contrary to what GDP statistics tell us, most Kiwi families have a high standard of material wellbeing relative to our international peers.”

Grimes said New Zealand’s level of average material wellbeing in part reflected its high number of cars and bathrooms per household.

New Zealand had the second- and seventh-highest average possession rate for cars and numbers of bathrooms in 2012.

And despite claims that inequality in New Zealand is terrible on an Inequality Index we are very middle of the pack.

MOTU Inequality IndexNow this is just one study. But it does suggest that the quality of life isn’t as bad, generally,  as some people try to portray.

Sure there are numbers of people for whom life is very difficult, and we should be doing whatever we can practically to address that.

But generalising doom and gloom merchants detract from targeting the real problems because many people know their claims don’t apply to them.

New Zealand is a great place to live in. We just need to make it better for more of us.

MOTU report links:

The Material Wellbeing of New Zealand Households

A new measure of material wellbeing based on actual household consumption rather than on their incomes, shows that New Zealand households have amongst the highest material living standards in the world. Using country averages for households that…

Labour’s insidious dirty politics

Labour supporters Deborah Mahuta-Coyle and Robert Reid clashed on a Q & A panel discussion this morning in a display of dirty politics.

Mahuta-Coyle is an ex-Labour candidate – Tauranga electorate and ranked 26 on the Labour list in 2011 –  and Robert Reid is General Secretary of First Union and was prominent in organising the anti-asset sales petition last term.

Dirty politics is spread across the political spectrum to varying degrees. One form of dirty politics is more prevalent on the Labour left – an intolerance of not being ‘left’ enough, an intolerance of different opinions and an intolerance of criticism and an intolerance of questioning of unsubstantiated claims.

It frequently results in Labour Party members or supporters (or potential Labour voters) being attacked, often for not being left enough, with little or no attempt to debate the issues raised. On blogs it’s not unusual for it to be used as an excuse to ban people deemed to be not having the right degree of leftness.

Mahuta-Coyle describes this on Q & A during a discussion on the Labour leadership contest:

Mahuta-Coyle: But Labour has real problems within the party structure itself. , and what I’m saying is this process is gonna be messy but not in a good way, because at the moment there are a lot of members that feel as if the culture of Labour is wrong.

So for example if I hold a different opinion about say what people are calling a fringe issue, and I voice that issue in Labour, I will get attacked, I’ll get slaughtered on social media, I’ll be isolated.

Because even though we talk as a party about being a broad church, in practice it’s actually not real, and that’s the problem…

Reid:But half way though an election campaign you’ll sit on this panel and criticise your own party…

Mahuta-Coyle: Of course I will, the thing is  because give me something to defend…

Reid: …but this is a discipline that La-, this is a discipline that Labour is lacking…

Mahuta-Coyle: Don’t sit there and tell me I’m criticising my party, I am Labour, I will call myself original original Labour, I’m not light blue, I’m not light Green, I’m Labour.

And when I get up here and criticise my party I do so because I want the party to improve, I want it to change and I want it to win. Don’t sit there having a go at me…

Reid: I would do that a few months before an election or now after an election but not in the middle of a campaign.

Mahuta-Coyle: But that’s you, that’s you. For me I was not happy…

Susan Wood: I think we’re seeing as illustrated before the divisions in Labour…

Mahuta-Coyle: Exactly. Yeah because I criticise the party someone has a go.

That was relatively civilised. The example was picked up at The Standard by a long time Labour activist Anne:

Its just a pity no-one told Deborah Mahuta-Coyle on Q&A this morning. Loud and abrasive… she treated Robert Reid with overt hostility and tried to rubbish everything he said despite the pertinent points he was making. She shouted over the top of him and when in response, he brought up her disgraceful critique of Labour half way through the campaign, she did a Pagani and claimed victim status.

A terrible performance so what is she doing there? Together with Josie P, these two are light weights who, more often than not, have no idea what they’re talking about.

Was she another of Matthew Hooton’s “recommendations”?

Josie Pagani has also had a few run ins with The Standard. She is not considered left enough so is labelled right wing (as also happens to me).

David H continued:

If this is the New face of Labour then it’s going to be worse than the last one. Robert did make (when you could hear him) some pertinent points. I hope that she gets hauled up before the powers that be and told to pull her head in. Because tired Labour voters just want the leadership sorted and not another overly loud prima donna starting even more problems.

Colonial Viper (another Labour candidate from 2011):

Deborah Mahuta Coyle works for the oil and gas industry now in PR. Do you need to know more.

Karen:

As does Josie’s husband and Shearer supporter John Pagani.

Follow the money.

Anne:

Thanks.

More “Dirty Politics”.

Ironic accusing Mahuta-Coyle of “dirty politics” because of where she works. This was picked up by ‘lurgee’:

Yes, actually. Unless you can actually prove influence or taint, you’re just smearing – engaging in your own little bit of dirty politics.

So they become the target of baseless attack by Anne:

Haven’t read the book have you cos if you had you would not have smeared. Some of us are well informed and have considerable personal experience to draw upon. Something you apparently seriously lack.

‘Lurgee’ responded:

Actually, I bought the book on the day after it was published. I have read the book and re-read it. Closely. And The Hollow Men.

I have commented several times that I see worryingly similar trends hereabouts – the constant denigration of people who have different ideas, the trial-by-rumour seen above, the implacable assumption of right and that the ends justifies the means, the Hollow Men style attempt to infiltrate a party an impose an extremist ideology on it and crush dissent. There are several pint sized whales swimming around this website.

Still, nice to see you doing a Slater yourself, immediately, and stupidly, trying to dismiss an argument with a personal attack.

If CV has proof that Deborah Mahuta Coyle is tainted or acting dishonestly because of her employment, let him present it. Otherwise, it is rumour and hearsay, smearing to silence or discredit alternative opinions. Very, very Dirty Politics.

Not at the level of Whale Oil dirty politics on it’s own but it’s so common – often the default reaction to anyone deemed critical or not left enough – and it is so widespread across the Labour left it’s insidious. It’s a trademark of the most Labour associated blog, The Standard.

The left of left activists of Labour are driving away support – and I know from experience that if you point out the negative nature of this culture of smearing and personal attack and how it’s counter-productive to building a health Labour Party you get banned.

They don’t want to hear, and they don’t want to change.

The rebuilding of unity within Labour and the attracting of new members and more voters will be very difficult, if not impossible. The culture is toxic and probably terminal.

See this exchange with Lynn Prentice yesterday – arrogant, self important and blind to the damage, he is a significant part of through his promotion of the toxic intolerant abusive culture at The Standard.

They are shitting in their own nest and blame everyone and everything else for the decline in support for Labour.

It’s not as in-your-face awful as Whale Oil but it’s at least as widespread and insidious as on the right and the results are a significant part of the damaging dirty politics culture ingrained in Labour, from top to bottom.

Whoever becomes the new Labour leader will have a very difficult job uniting a party riven by dirty politics.