Foreign labour doesn’t need to come to NZ to hurt kiwi workers
Yesterday New Zealand First’s Peter Brown used question time in the House to launch an attack on New Zealand’s immigration policy, arguing that cheap foreign labour was taking skilled kiwi jobs.
“Would the Minister agree that the ability for employers to bring in cheap, foreign labour… has now created the perverse consequences of employers forcing down wages, and, even worse, forcing those same New Zealanders offshore to get better-paid employment?�
The issue however, is not to do with immigration policy. Immigrant workers are not coming to New Zealand with the intention to undercut New Zealand wages and salaries. I’m sure they would like the reverse to be true. The real problem is companies that undercut New Zealand’s labour standards and minimum wage by employing cheap foreign labour that remains overseas. The probable demise of Norsewear, for example, could see several dozen skilled manufacturing jobs in small New Zealand towns replaced with a further pile of imported clothing made by Chinese workers. Â
As well as putting pressure on wages, employment and employment conditions in New Zealand, this is also harming our current account deficit and our local communities. The real culprit, rather than our immigration law, is a collection of international trade laws that are preventing us from being able to favour local goods and services provided by workers in our own communities over cheap imports from countries whose lack of labour protections are driving down conditions in the rest of the world.
October 18th, 2007 at 3:35 pm
Comparative advantage.
We’ve got a lot better things to do than manufacture low-value commodities…
October 18th, 2007 at 3:53 pm
One third of the workforce in Queenstown are foreigner’s. In some ways it is recipricol (Kiwis work in Japan etc), but I heard (second hand) that one tour guide in Queenstown got “$20 for a 4 hour” stint.
October 18th, 2007 at 4:44 pm
Two words: Labour Market
October 18th, 2007 at 4:52 pm
Two more words : property market.
October 18th, 2007 at 5:54 pm
People who talk about equilibrium in the labour market in a globabalised world need to consider the figures
“during the 20th century, human population multiplied from 1.6 billion to 6.1 billion people,”
http://www.sierraclub.org/population/
I had a great conversation with a farmer today. His Dairy farmer nieghbours had made his well go dry..luckily one of them used a new well to supply his house. He visited a demonstration of Pegasus town and gave the presenter a hell of a hard time over sewage, traffic, electricity and (apparently) the area was under water for 3 days in 1953…. Not a prospective Green Party type (despite the name)….
October 19th, 2007 at 11:45 am
I appreciate the reference to norsewear. Three years ago I discovered icebreaker, and stocked my wardrobe full of made in nz merino (which I still wear). Once they moved production overseas, I didn’t have to look around too far to find a made in nz alternative (norsewear) and I haven’t bought an icebreaker product since. I won’t be buying anything from norsewear either, since there are many other options - chalkydigits, anyone? I wonder whether any of these companies have realised yet how much of their success was due to customer loyalty, and whether we are really so easy to replace….
p.s. the chalkydigits summer catalogue just came out….
October 19th, 2007 at 12:09 pm
Good work Nik. Chalky Digits is a great NZ made clothing brand … highly recommended.
s.
October 20th, 2007 at 1:18 am
The other issue is factoring the carbon pollution factor when importing goods made overseas (outside of the Kyoto Accord group).
The most obvious method of favouring domestic market production is to end the over valuation of our currency. This also assists domestic production of added value exports This should allow an increase in real wages to workers.
Adding GST to the cost of new consumer borrowing would allow the RB to reduce the OCR a similar amount. This should reduce offshore interest in holding financial assets here.
Taking GST off rates would offer some popular appeal balance to such a revenue earning measure.