Workers demand end to wage freeze

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Workers rally outside Parliament. Green MP Sue Kedgley spoke in support of their calls to lift the wage freeze.

The sun shone on rallies for low paid workers held in cities and town across New Zealand.

In Auckland they were led by Service Workers Union members in their bright red T-shirts – coming from hospitals and rest homes across the region. Other unions like the Public Service Association and NZ Educational Institute also brought their low paid members along.

Chants slammed the National government’s wage freeze in the public sector as the march wound its way Queen Street to a rally in the Methodist Mission.

The fighting spirit of the workers was infectious, both on the march and at the rally that followed, where I represented the Green Party, and Phil Goff the Labour Party.

Rallies that Green MPs addressed in other centres were similarly spirited.

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Minister in charge of Climate change negotiations Nick Smith didn't seem too interested in the demands of the low paid workers...

29 thoughts on “Workers demand end to wage freeze

  1. SPC,

    You clearly don’t read or understand much of what I wrote.

    Judging by the like versus dislike rating, more people understood what I said then did not.

    Never did I say I wanted a low wage economy, In fact I want minimum wages at $35 per hour. You are claiming a measly $15 per hour, No?

    My challenge to you is how to achieve that SUSTAINABLY.

    Oh dear, and the pigeon holing of ideas to improve the workers case presides only on the left of the spectrum?

    Well guess what, the centre is were the workers vote, not the left. As judged by the mind numbing thin 2% margin the Greens enjoy above the limit to be in parliament.

    Your mind set is clearly in the cloth cap brigade of the early 20th century, Workers have moved on from there, you need to get up to speed with the workers. They are leaving you way behind.

    Just to correct some of your misunderstood readings from my comments.

    I don’t need to show any country that has government spending at 20% GDP. I said it is the first step that NEW ZEALAND needs to undertake to improve workers wages. Once a balanced budget has surpluses that largesse can be distributed and the percentage figures increased.

    It is called biting the bullet for future generations, not borrowing from them but giving them a head start.

    You say the environment is important and I totally agree. I think you missed the point where I said that the debt holder controls the debt payer. So it is not unreasonable to suggest that the IMF or the ADB could “suggest” methods to the New Zealand government to speed up repayments. Suggestions like digging up coal.

    That is why I’m against borrowing and am in favour of balanced budget. New Zealand is not beholding to anyone and we can keep the environment preserved.

    You want to keep selling your soul to the moneylenders, I don’t.

    Onto borrowing.

    I said borrowing is good PROVIDED it is funded from the positive difference between income and expenditure. Be these actual or projection.

    The only businesses that borrow to repay lending’s are the likes of bridgecorp and hanover.

    No reputable business does otherwise (borrow only enough to be able to service the loan from actual or projected income).

    Now New Zealand may be borrowing but the income versus expenditure is negative PLUS the projected income flows are way below what is able to service the loans.

    Hence the real worry that sovereignty in New Zealand will be ceded to the lenders.

    Have read of this three page essay and see how worker rights in a bankrupt economy fare

    http://www.spiegel.de/international/world/0,1518,604523,00.html

    They dont

  2. You asked if borrowing is wealth. Most businesses borrow to grow rather than afford spending programmes out of existing profits. They do this despite being accountable to shareholders (returning either higher dividends or a rising share price). It is the current business model and most political parties/governments and councils fund some of the infrastructure investment out of borrowing.

    Are they all wrong?

    There is an economic cycle and there is an investment programme. Debt is not a wrongdoing. It’s how people afford a home, and part of how they save for retirment.

    The threat to our economic sovereignty does not come from our level of government debt, which is quite low compared to some – it is actually other foreign debt. We do need a societal move from consumption to saving, but the idea that the government can and needs to do all of this by itself, as you seem to be suggesting, is the wrong approach to the actual problem.

    A low government debt and a balanced budget is not required to have a sustainable environment base to the economic model and it’s a pretty cynical arguement to try and pretend this to try and gain support from environmentalists

    First Greens were told to give up the left wing economic policy and focus on the environment, now its adopt a conservative economic policy (no deficit and low government spending) before doing anything about the environment, as if a hardline National Party policy would help prepare the way to a neo MOU agreement. Yeah right.

  3. Gerrit

    You argue for a government share of the economy of 20% – can you name any OECD country which has this low rate?

    This low rate is certainly not required for an OECD country to have a balanced budget – many have done so at much higher rates of GDP. We did so very recently (and had surpluses for a while as well).

    Australia achieved its higher wealth per capita with higher than a 20% government share of the economy.

    There is any irony to your advocacy of a sustainable economy based on a small government and underpaid workers, yet you don’t have much interest in a sustainable environment (locally or globally) which underpins such an economy.

    It’s interesting your concept is that Greens should link their sustainable environment base to an economy with small government and anti-worker attitudes (classic conservative economic model) – not that you want to adopt Green environment concepts, just use designed for Greens arguments that sell the conservative economic model to the Green party – to promote that policy into a multi-party consensus. I guess this is because the Greens have been the only left wing pary in parliament of late.

    PS Both those who want a fairer deal for workers and the government trying to impose a wage freeze will be borrowing plenty over the next 5 years. So whether workers get a fair deal, or not, is not the central issue here about debts and deficits.

    And remember, you have to pay doctors and nurses more to attract and retain workers – the greatest unproductivity is having hospitals set up and equipped and not having the staff to make productive use of them. And underfunding CRI’s (we need the new tech and we need clean farming etc) is not cost effective it undermines a country’s future etc, so we must retain staff there as well. Wage freezes are problematic.

  4. Bliss,

    If the alliance had done a budget then the spreadsheets used would be available. Start there and get a competant person to modernise and update them.

    Simple stuff.

    Or start here,

    http://www.treasury.govt.nz/government/financialstatements/yearend/jun09

    I’m sure if you asked nicely, treasury might actually give you the spreadsheet templates to base a BALANCED Green budget on.

    Come on, you have 2 years before the next election to get the marketing of the Green party organised.

    Simple billboard with children are not going to sell the message. People need to see background economic information to base theit votes on, not warm messages without costings.

    You need to have the warm messages to direct interest to the nuts and bolts. Something the Greens have lacked, showing in their poll results in past elections.

    There is just a two percent voter shift required to dump the Greens from parliament. To small a margin I would say to be complacent and not have a costed budget for the Green initiatives planned.

    First question from the voter is always (well maybe sometimes if they had the nous) is how initiaves will be payed for. If you have no answer then you will get a blank stare from the voter.

    The Green New Deal Economic Stimulus is not a budget. There is no top line (income) – no bottom line (wealth available for redistribution) – no cashflow predictions to service the outstanding borrowing ($50M plus 5.5% per DAY), etc. etc.

  5. Gerrit

    If you have costed the expense of producing a budget, you will be 3/4 of the way to producing one.

    Some of us were there when the Alliance did produce an alternative budget. We know very well how much it cost. Over a person year, closer to two.

  6. I like BJ’s suggestion of time limited tariffs for fledgling industries. This would not initially create wealth so much as keep the wealth in the country. As the industries become competitive the tariffs can be removed and then as efficiency improves further we may actually bring money into the country via such means.

    I feel that this would couple well with PPP’s and government funded start-up grants. We should be able develop in the areas familiar to the Nordic countries and Germany. A weightless economy would do wonders, though I think would leave us rather susceptible to the economic functioning of others.

    Our minerals may provide us with some valuable capital. They should only be extracted by crown owned enterprises, though, as the crown can do so almost as efficiently and the minerals belong to the people anyhow,this way maximising ROI. The minerals should, of course, be extracted only if the ROI exceeds the expected ROI if they were left in the ground.

    There is a lot of wealth creation that happens as a result of wealth distribution. A lot of destruction also.

  7. There are actually two issues that need to be seperated in terms of the economy.

    The first is wealth creation. Who creates it. How can more be created, how can it be funded, how can it be made to be SUSTAINABLE.

    The second is wealth distribution. Who benenfits and how to ensure equality.

    The two issues are quite seperate but I feel we talk to one another as it they were a single issue. They are not.

    The wealth distribution part is the most argued about, but we never seem to get an opinion on how to go about creating wealth.

    What we are doing is borrowing to make it appear we have wealth in order for the electorate to feel that wealth distribution systems are working for them (benefits, entitlements, government jobs, etc.).

    Unfortunately we are not creating any wealth so long term we wont have any sustainable distribution schemes in place.

  8. Folks

    We went over this a while back. We have problems related to giving people Monetary support rather than direct support and we’ve had them for a while. I’d suggest that a first step here would be to merge the child support offerings in WFF and in the child support offered under the dole, into an children’s equal opportunities fund which is used to provide for schools, clothing, computer access, and all the rest.

    So that it does not cost so much to raise a child (the state provides) and so there is no direct payment on a per-child basis for having a child. We need to work the details out so that it actually provides real, not minimal, support.

    The Tobin tax notion helps us, though I would implement it indirectly through making the currency redeemable in electrical work here in NZ. It’s our dollar, we get to say what it is worth.

    The tax adjustments favored by the Greens would help greatly in moving us back towards a more egalitarian society. I note that Sweden has a much different tax structure (*higher top rates and GST and CGT are features*) and seems to work quite a bit better in terms of equality.

    I STILL want to send Parliament home and send a guy with a copy machine to Sweden.

    Think of the savings!

    respectfully
    BJ

  9. Gerrit is making a lot of sense I would like to see New Zealand go back to ‘free’ education, health, dental and social services that we enjoyed.

    Granted it doesn’t come from nowhere and it is only right that the left needs to face the question ‘Where does the money come from?’

    Both Heyak and Marxist advocates would agree that it would be PRODUCTIVITY and in New Zealands case it would largely come from agriculture, fishery and forrestry. Our secondary income would come from manufacturing and technological industries.

    Global capitalism has virtualy destroyed the secondary tier when tarrifs that protected our manufacturing industries were lifted under the General Agreement of Trade and Tarrifs (GATT)That was very clever!!!!

    It would Have been a more real ‘free’ trade had they agreed to only trade within a trading block with a common currency and a General Agreement on Wage Rates. The WTO has still not put that into the negotiating rounds has it.

    China’s huge wealth does not come from nothing and I can bet your bottom dollar the wealth isn’t distributed equitably. How much does the poor sod gets for all that repetitive labour? That we take for granted.

    What is now even more serious is that our primary earnings of PRODUCTIVITY is being destroyed by environmental vandalism at an alarming rate!!!!!!!

  10. I agree with BP and Gerrit on budgeting, and not spending more than a country earns. The point where I am sure I disagree is on how to achieve this balanced budget.

    Cutting or freezing the wages of working people is one way. Another is to redistribute the wealth more equitably to _workers_. I underlined that last word; I am not advocating for more social welfare benefits. What I am saying is that wages and salaries for people doing productive work could be more equitable, and of course be constrained by the overall budget. Combined with that, the “mosquitos” in society need to be dealt with harshly. By “mosquitos” I mean people who siphon off wealth without doing any productive work (and who are capable of productive work).

  11. The cost of producing an alternative budget is *huge*.

    If you have costed the expense of producing a budget, you will be 3/4 of the way to producing one.

    What a waste to cost how much it is to produce something instead of just producing one. Non productive.

    How much was the cost to work out it was not feasable to produce a budget?

    PS. am Green from the point of view of sustainability of assets and endeavour.

    Not sure if I would add social responsibilty by gocvernment over individual responsibility for self.

  12. I would rather be poor and debt free then living in a fools paradise by borrowing againt a non existing cashflow.

    Who will be poor? All of us? I do not think so!

    I’m all in favour of increased wages. Minimum should be $30 per hour.

    All we need to design is a SUSTAINABLE economic model that will achieve that.

    Is that all?

    $30 an hour is probably unattainable for the whole working population. But what is attainable is a decent standard of living (warm house, good food, decent clothing and public services) for the whole population.

    Yes we need to adjust our economy to be sustainable. Yes we absolutely need to do some thing about our current account deficit (at least stop the free flows of speculative capital that keep our exchange rate so high). We (the Greens) have been banging on about this, in one form or another, since 1972!

    the first world living standards New Zealand HAS enjoyed, with third world economic income levels

    Some facts: Here it says that NZ is between 27 and 38 in the list of world rankings of GDP(PPP) per capita.

    USA: $47,440
    NZ: $27,083

    NZ is 57% of USA. Could do better but not really third world yet. A few more years of commodity exports and neo-liberal policies and we will get there.

    Incidentally the estimated GDP/Capita for Cuba is $9,500. And they have a health and education system that is better than ours. I would not want to live there though, I would be in jail for being political. But the point is you do not need to increase GDP to increase standards of living. We have been banging on about that, too, since 1972.

    Yes I know about the Green economics postion as outlined by Russel Norman in October. But to have any substance that policy needs to be budgetted and presented with at least a 3 year forecast, to be considered an option.

    You know a BUDGET that every sustainable household has, where outgoings are equal to or a little less then incomings and where large ticket items are bought on borrowings with principal and interest repayments funded from the little that is left over after outgoings have been payed.

    We have debated that. The cost of producing an alternative budget is *huge*. But our latest economic policies are costed. See this PDF.

    Gerrit must be a Green, as the Green Party is the only party taking the issues he is highlighting seriously.

    peace
    W

  13. I heard a head of one of the Unions say – in all seriousness – that the way for workers to earn more money is to pay them more.

    I blinked in disbelief.

    So his idea was that employers should simply hand workers more money. Marvellous! Why didn’t anyone else think of that?

    It’s a wonder his union members aren’t paying him a wage of $2 million. The fact they don’t have the money to do that – much like the employers – is apparently irrelevant.

  14. Greenfly,

    Judging by one negative ratings someone has given the economic comment above, at least one person is not alarmed.

    Focussing on the small stuff is not helping a focus on the big stuff.

    Nor will it get the minimum wage up to $30 per hour.

    That is what the focus should be on and how to structure the economy so that the $30 minimum wage is SUSTAINABLY achieved.

    Not many comments on HOW to achieve that, short of SPC saying tax more borrow more. Minimum wages are sure to rise, not.

  15. Gerrit – I agree with you entirely. Lack of honesty around the Government’s ETS is appalling. Bill’s stupidity pales into insignificance beside that, but never-the-less is worthy of comment, because we shouldn’t let minor stupidities pass just because there is a greater one unfolding.
    As for Bill’s stupid names – some enjoy the opportunity to reduce the swelling caused by priviledge in our ‘chosen ones’ by assigning a deflating title, and I am one of those who does.

  16. Greenfly,

    Not alarmed, just greatly disappointed that he would do such a stupid thing.

    Alarmed I am about the state of the economy with the added burden of an ETS that no one can forecast incoming/outgoing figures for.

    Alarmed that those figure are not included in any budget, nor in the deficits being forecasts for the next 10 years.

    That is what people should be alarmed about if you care just a little bit about our children future.

    Whether or not Bill English parks his entourage in an stupid place is not alarming. Just stupidity on Bill English’s part.

    And a sad reflection on politicians who sign up for stuff without any costing and without even placing any provision for any cost in any budget. Noticed treasury forecasts lately? Try setting a budget to those.

    And giving politicians stupid names is even sillier. Reflects badly on the name caller.

  17. Judging by greenflys’ comment above I think you are right.

    I’ve tried explaining it to left-wing friends of mine, but I can’t find the language. I’ll agree with them that free education is a great idea, free healthcare for all is a great idea, increased benefits are a great idea, eliminating poverty is a great idea, and then ask them how they intend to pay for it.

    Blank looks.

    Then it is suggested that increasing tax will pay for it, until it is pointed out that raising taxes will likely decrease the tax take.

    Blank looks, again.

    I’ve never understood the disconnect. To me, it is obvious that you can’t buy things if you don’t have the money, or can’t afford the repayments.

  18. Gerrit – not alarmed by Sir Double Dipton’s haircut spend and the arrogance that surrounds it? Are you a supporter of priviledge and waste?

  19. Imagine if it had been Helen Clark!
    A limosine, plus the car of English’s bodyguards, parked for 50 minutes on a disabled persons park, arrogantly refusing to move and all this only six minutes, six minutes from the Beehive!!! And all so that Billy could have his locks permed! Two cars! A team of drivers and guards, for a haircut!! Bill’s sore back prevented him from making the epic journey – bullsh*t!
    Imagine the shrieking that would start from the Rabid Right, had it been Helen and how long that caterwailing would last – it’d run for years! They’re still talking about her signature on a painting for Gaia’s sake!
    Bill, Bill, Bill!!!
    You Toff.

  20. Starting to feel like BJ with him having to explain climate change over and over again. I will carry the sceptre regarding economics.

    SPC, we discussed this at length on another posting. You want to borrow from your children and childrens children to pay for the first world living standards New Zealand HAS enjoyed, with third world economic income levels.

    You cannot borrow against non existing cashflow (New Zealand wont be in the black for at least 10 years) without the lenders demanding that we dig up coal, mine for gold in the coromandel, etc.

    Now if you want to trade away New Zealands sovereignty go ahead and keep borrowing.

    What is the correlation between borrowing and mining New Zealands reserves?

    Well once you are “on the borrowing wagon” – like any addict, the lender can make demands. Dig up that coal, or we wont lend you any more, oh by the way interest on what you owe is now 15%.

    I would rather be poor and debt free then living in a fools paradise by borrowing againt a non existing cashflow.

    First we have to get government expenditure down from 36% of GDP down to at most 20%. That way we get more productive without that drag of non productive (as in not paying taxes except GST) state servants.

    May I suggest you read this essay on how to measure productivity and how wrong it is to treat borrowing as wealth.

    http://thearchdruidreport.blogspot.com/

    Think about that last statement. Is borrowing wealth?

    I’m all in favour of increased wages. Minimum should be $30 per hour.

    All we need to design is a SUSTAINABLE economic model that will achieve that.

    And borrowing to pay for todays lifestyle choices is simply not an option. We are simply going to have to bite the bullet (either this generation, the next or any afterwards) and stop spending what we dont have.

    Yes I know about the Green economics postion as outlined by Russel Norman in October. But to have any substance that policy needs to be budgetted and presented with at least a 3 year forecast, to be considered an option.

    You know a BUDGET that every sustainable household has, where outgoings are equal to or a little less then incomings and where large ticket items are bought on borrowings with principal and interest repayments funded from the little that is left over after outgoings have been payed.

    In New Zealand our outgoings are way, way, way too high.

    Time for this and the next generation to cut back (and yes go cold turkey if we have to – New Zealand has done it in the past and can do so again) to enable the future generations to have a better lifestyle.

    And yes, the Green economic model might actually work, IF we cut our expenditure now. It will never work on continuing borrowing.

  21. The government is borrowing an additional $250 million dollars every week to pay for an inflated public service (40% increase in spending when over the same period gdp AND inflation only increased by 15%).

    So if pay goes up, WHERE or WHO will you take the money from?

    Health? Education? Benefits?

  22. Why is it that those with property regard this as something they own and so resent any government intrusion diminishing their ownership.

    Yet labour owned by the worker can be diminished (in real terms) by a wage freeze.

    It’s akin to imposing a CGT and taxing any rise in value without adjusting for CPI movements while the prpoerty is owned, or taxing interest on income without deducting the CPI over the time the deposit is saved (which we do and this should stop, or otherwise a compensating reduced flat rate witholding tax charged, say 1/2 the tax liable at the highest rate of income tax paid).

  23. What wage freeze? The government’s declared intent has yet to be put into effect. The campaign should be opposing the “imposition” of a wage freeze.

    The idea of a wage freeze “singling” out state workers needs to be challenged. Equal pay for equal work, includes an equal right to seek a wage increase with other workers.

    The government’s case is based on its claim of an inability to pay (and restricting budgets for departments who say they cannot afford to pay) – this is not true (they are not bound by their deficit and even if they were, they could still prioritise the payment of wages over other spending rather than effectively cut their wages to afford it) – they have chosen not to. Their choice is not just, especially for those already struggling on low wages.

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