by Russel Norman
The IMF released a study late last year that found that the global financial crisis was, in part, driven by growing inequality. In brief, they found that the American middle classes went into great levels of debt to keep up with the rapidly increasing consumption habits of the wealthiest 5% of American society. The IMF study found that inequality in the United States was back at its pre-Great Depression levels on the eve of the financial crisis.
What’s the IMF’s proposed solution to reducing unsustainable levels of household debt in the lower-and-middle income groups? Reduce inequality by strengthening the collective bargaining rights of workers so that they can work their way out of debt.
Stronger collective bargaining will mean American workers capture a greater proportion of the wealth being created, reversing the trend of the last 20 years whereby the top 5% of society have been capturing it in obscenely disproportionate amounts.
The IMF concludes: “Restoring equality by redistributing income from the rich to the poor would not only please the Robin Hoods of the world, but could also help save the global economy from another major crisis.”
Their advice is highly relevant to the New Zealand economy as well. Inequality is at near record levels and so is household debt. Now is not the time for the National Government to be proposing to further weaken workers’ rights to collectively bargain for higher wages from their employers.
Published in Economy, Work, & Welfare | THE ISSUES by Russel Norman on Sun, June 12th, 2011
Tags: collective bargaining, Debt, global financial crisis, IMF, inequality
More posts by Russel Norman | more about Russel Norman
on the trolls and those who are unable to keep on topic
Russel,
This kinda talk amounts to an ‘Overturning of the money lenders tables’ and gets one into trouble…
http://www.cnbc.com/id/43366947
““This was a very major breach,” said one official, who said that it had occurred over the last several months, even before Dominique Strauss-Kahn, the French politician who ran the fund, was arrested on charges of sexually assaulting a chamber maid in a New York hotel.
Asked about the reports of the computer attack late Friday, a spokesman for the fund, David Hawley, declined to provide details or talk about the scope or nature of the intrusion. “We are investigating an incident, and the fund is fully functional,” he said.
Because the fund has been at the center of economic bailout programs for Portugal, Greece and Ireland — and possesses sensitive data on other countries that may be on the brink of crisis — its database contains potentially market-moving information. It also includes communications with national leaders as they negotiate, often behind the scenes, on the terms of international bailouts. Those agreements are, in the words of one fund official, “political dynamite in many countries.”
Co-incidence, conspiricy? – who knows.
Kia Kaha… mouse.
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Paul Gilding, in _The Great Disruption_, makes the case that people in the top 1-5% should “work less, live more”, and use their hourly rate as a “scorecard”, instead of the bottom line of their salary. ie, don’t brag about how much you earn but how little you have to work to live a high life. Apparently it would take a lot of steam out of the growth economy. Interesting book on many counts.
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Russel,
It is clear that National will win the most party votes in the coming election, and it is quite possible that labor liberalization laws will be a priority on their policy platform.
Is this Green party willing to go into coalition under this scenario? Is it willing to negotiate and extract concessions on environmental policy from National? Extract a greener energy policy? Extract more spending on public transport? Bring forward the timetable on carbon trading? The National party is increasingly marketing itself as Green-friendly, and backing it up with some minor policy. But NZ needs to do so much better. Hold them to their claim, Russel! Tell NZ that if the Nats really are green, then they should be looking to work with the Green Party on environmental issues.
Yet it is posts like this one that remind me that this Green party is still beholden to the traditional left of labour unions and alike. The environment, and future generations of NZers, will continue to suffer.
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The only people the Greens are beholden to is their membership, and their membership endorse policies such as those relating to strengthening collective bargaining. Apart from a Memorandum of Understanding with one union (the SFWU) to discuss matters of mutual interest, the Greens have no formal relationship with any union.
The reality is that if the Greens supported National’s anti-union and anti-worker agenda, even if it were in return for concessions on environmental issues, much of the Green membership and voter support would desert them. I would be one of them.
It is fair enough to go into coalition arrangements in the knowledge that there are some Green policies that the greens are not going to make any progress on. But to go into arrangements of the basis of them requiring the Greens to support policies contrary to those the Green members have endorsed would be a betrayal, and be seen as such by the membership and voters. Sure, it may be the way other parties behave, but I am proud of the fact that the Greens have more integrity.
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Russell is fcatually incorrect when he says “Now is not the time for the National Government to be proposing to further weaken workers’ rights to collectively bargain for higher wages from their employers”
How can giving people the power to negotiate collectively (with or without a union should they choose) be weakening their rights or abilities: they have more choice, and the ability to move outside the limitations of unionist mindset if they choose to.
What this amounts to is the removal of a cosy (union) club of exclusive and captured market. As when unionis was amde voluntray, good unions flourished and poor ones died a death. Now the unions will have to compete and serve theire members better than (for example) any employment consultant.
The people who are objeting to this improved choice are those with a vested interest in duoploy market of collective barginning. Of course the unions will whine about this: they will now have to perform and serve their members (rather than focusing on politiking and breeding Labour MPs)
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So perhaps we need a new environment party for those interested in the environment but who are not part of that minority on the extreme left.
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A right wing green party has been tried before, in 1996. It got 0.26% of the vote and folded shortly thereafter. I think that is indicative of most people who have a commitment to environmental sustainability recognising that it is not going to be achieved through market forces.
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I’m very happy with my current income, could always do with a few more $$$, but the obscene amounts that some people earn, often from the hard work of those that don’t earn enough to put a roof over their heads, but instead are forced to rent from those with all the $$$, just sickens me.
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i think they were a more centrist green party..than a rightwing one..
i did a paper/w.h.y.on them at university..
..and i interviewed a party-founder on bfm..(hello hans..!..)
..they left the greens when the greens hooked up with anderton in the alliance..
(they could only see tears before bedtime..)
..and one of my first (disturbing) experiences in the green party was at a party convention back in the mists of time..held in a classroom at green bay high school..
..this was just after the greens had left the alliance..
..and two of that parties’ luminaries turned up on the day..(hans and simon..)
..(to my eyes..looking for a reconciliation of sorts..)..
..and i was gobsmacked how everybody ..from party co-leaders down..
..cut them dead/closed them out…
..and they ..unable to ignore their ice-box welcome..left soon after arriving..
..(that was when i had my first ‘how ungreen’-moment..)
..phil(whoar.co.nz)
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That’s a very old wound, eh?
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yeah..probably still not forgotten by those it was inflicted on…
..at the time i viewed it as a stupid waste of resources…
..these were/are very talented people…
(‘simon’ was new zealand representative at he first earth-summit..and had lectured to my pol-studies uni-class..so i knew how talented he was/is..)
..people who i felt had a lot to offer to a seriously under-resourced party…
phil(whoar.co.nz)
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Do unions create a more stable economy though? Firstly, I am largely opposed to unions because the chief way in which they get what they want is through strike action – and that has a negative impact on the ordinary lives of people that aren’t the workers and aren’t the bosses (for instance, when bus drivers go on strike, it is the commuter who suffers; when teachers go on strike, it is the student who suffers; when Interislander ferry workers go on strike, it is the holiday making family who suffers). At least those who rely on the market know that if they feel they can get higher wages, they can simply find further employment.
The further problem with unions is that there have been a number of instances where they have been so demanding that their action has been considerably responsible for the collapse of companies. Take for instance the US Car Manufacturing Industry – in the 1960s, unions demanded a raft of conditions and generally got them from their employers. Two decades later, this meant that the US car companies had labour costs twice that of the Japanese car manufacturers and it got to the point that if GM or Chrysler tried to make small cars, they would be selling them at a loss.
The other field where unions have been particularly destructive is in the aviation industry. In the 1980s, we saw a lot of union action to try and prevent airlines from downsizing their operations, in spite of the airlines running up some huge losses. It almost certainly resulted in the death of airlines such as Braniff. The worst case of this was in Australia, where the unions forced Ansett Australia to keep Flight Engineers on their new fleet of Boeing 767-200s – even though those planes had been designed to operate with a pilot and co-pilot only. Indeed, thanks to union action, Ansett was loaded with staff until pretty much the day it died. Even more recently, we have seen unions fight tooth and nail to prevent the downsizing of airline operations in the United States, even though the airlines have themselves been bankrupt.
If unions have been so destructive with the car manufacturing and the airline industries, then surely we must question whether or not a more active union presence will really result in a more stable economy, or whether other things, such as the return of a gold standard might help in that regard.
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John-ston comment that “unions demanded a raft of conditions and generally got them from their employers. Two decades later, this meant that the US car companies had labour costs twice that of the Japanese car manufacturers and it got to the point that if GM or Chrysler tried to make small cars, they would be selling them at a loss” is easily solved in the leftist lexicon: import tarriffs.
The comment that “we have seen unions fight tooth and nail to prevent the downsizing of airline operations in the United States, even though the airlines have themselves been bankrupt” is unfortuanley true here in NZ. rather than work with the employers, the unions have taken an adverserail stance which later blows up in their face: rather than the unpleansant loss of a few workers, the union clings on to them all (in art to bolster their subscription dues and own influence) and then the whole industry dies when comeptive realities are sheeted home, viz shipping, railways et al.
In saying “we must question whether or not a more active union presence will really result in a more stable economy”, a refocusing of unions is requited: unions need to move into a cooperative head-space, and work for their members interests. Unions need to stp working for their own interests, and concentrating on producing more Labour MPs.
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Something that I cannot help but wonder is whether or not unions could evolve as our society changes? We are moving more toward a “contractor” based society, and the days of someone having a fixed employer are slowly coming to an end. Perhaps a union could evolve into an entity where a group of employees come together and co-operate toward getting as many of those “contracts” as possible – somewhat like an Accounting firm, or a Legal firm.
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So Dr. Norman, when I asked you at the last election campaign about what to do when a Union member was abusing me using the power and legal might provided by the Union you hemmed and hawed about a balancing of power. As I had almost zero rights during this debacle you obviously seem to think that since I had some rights I was obviously not disenfranchised enough. Give them more rights to stronger collective bargaining but allow non-union members equal rights to information access and put the skewer in the coming debate about mandatory or compulsory membership. Freedom of association should be respected.
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I strongly agree with Bill, some folks earn an obscene amount of money off the backs of those who do the real work. Unions try to level that playing field and watch out for the everyday man and woman.
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Madison
Where power is the issue, there will always be abuses on both sides. When there are no unions the AVERAGE of the work practices will as a result favor the employer and the most abusive employers will also cop an advantage over the more fair employers until the employee is little more than an interchangeable part, a slave. If the Union is so powerful that no corporation can withstand its demands or risk its displeasure, the position is reversed and the employer is the “slave” to his own business.
Neither situation is long tenable for the society. Not knowing anything of the specifics of your complaint it cannot be addressed any further, but the point that there must be a BALANCE on average is pretty clear.
The difficulty is that “on average” has nothing to do with specific abuses and you can indeed find yourself in a specific and very unbalanced situation. I don’t think that this can be helped in terms of policy. It is probably a matter for courts and lawyers and such when relations have deteriorated to such an extent.
BJ
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Yes, I have no real problem with collective bargaining powers being increased as long as there are increases that look towards restricting the abuses as well. If Mandatory or Compulsory membership is returned (Mana and Labour are encouraging this) then do Unions lose the right to reject members over solidarity issues? Do I get the right of access to the same information that Unions are allowed to access in negotiations? I know my co-worker knew my pay exactly and to the cent despite that information supposedly being confidential. I know Dr. Norman means well and that better bargaining will improve things for all of us but the Unions have lots of power in collective bargaining as they are usually able to negotiate above average wages. Wouldn’t the better way to push this all up be to increase bargaining power of non-union affiliated workers through legal help and assistance (Unions could probably make a mint freelancing with this for a fee per negotiation) which pushes the Unions up as well?
Does anyone also notice that most periods of “stability” in history are also referred to as stagnant for no increase in industrial growth and advancements?
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Toads’s commenst that “A right wing green party has been tried before, in 1996. It got 0.26% of the vote and folded shortly thereafter” are interesting for many reasons:
– it demonstrates a limitation of left-right politics
– it fails to take into account the voting history of the time, and the economic backlash that was occuring
– it fails to acknowleg the signifcance of quite a few thousand people who identify with the green ethos but reject the red ethos that goes with it.
– It fails to be contextualised with the red-green vote of the time
They did this with enough emphasis to effectivly cast their vote away, knowing that on pollingthey would not be represented. How many like-minded people still voted green and let their suport ofr the green ethos overide their rejection of red? As an ex-Green voter (for a few lections now put off voting Green by the bullying and oppressive lunacy of Bradford and Locke et al.) I would have been one.
The harsh and simple reality for the green party is that by having the reds so prominent, they are consigning themsleves to being a minor player in NZ political sceane. If the greens shook off the reds, youd see far more mainstream supprt from people wh aspire to the green ethos, but who reject the nannying the greens have condoned and sought to impose on the populace (like lightbulbs and showers) in the past.
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Toad,
Thanks for your response. It is apparent that this party is better characterized as being a red-green coalition. However in calling yourself the “Green Party” you wrongly usurp the environmentalism banner. In particular you leave little room for a party based solely on environmental issues, which would have more right to call itself “The Green Party”.
The transition to a sustainable economy is by far most urgent problem facing NZ and the world. It is high time The Green Party of Aotearoa either lives up to its name and goes into coalition in order to protect the environment, or else renounce the Green Party label to a party that will.
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