And the Nats want to screw these workers?

I didn’t think it would happen so fast! News today that the pay packets of the lower paid workers are already shrinking in current conditions. The Herald says:

“A new survey of pay rates shows a dramatic deterioration for those at the bottom of the heap, while rates for skilled workers are outpacing rampant inflation.”

The figures are alarming, and confirm some anecdotal evidence we’ve heard that things are already starting to bite in the ‘secondary labour market’.

Basically, to understand what’s been happening in NZ employment relations over the past 20 years you need to understand that there are two ‘worlds of work’. You’ve got the better paid, higher skilled workers enjoying job security and better conditions in the primary labour market, and lower paid workers with crappy work conditions, casual and irregular hours, less job security in the secondary labor market.

For the latter, think domestic industry in particular, focussed on cost competition: restaurants and cafes, small shops, rest homes, petrol stations, cleaning contractors, etc. Workers in these industries also have lower rates of unionisation.

Invariably, they’re the ones who suffer first and suffer most when the economy sours. And so it is this time. An analysis of 73,000 jobs listed on the Trade Me website shows that, “comparing the first half of this year with the last quarter of last year, … average pay rates had gone up by 3.7%.”

But that’s only good news for primary labour market workers:

“The unskilled groups at the bottom of the heap went backwards in nominal terms before even taking the annual inflation rate of 4% into account.

Kitchen staff were the worst paid at $28,831 and went down from $29,625 while waiting staff wages fell to $30,296 from $30,826, caregivers to $30,894 from $31,967, shop assistants to $31,668 from $32,565 and cleaners to $31,704 from $31,964.”

And National wants to strip these workers of their protections against arbitrary employers for the first three months of employment, leaving them to their own devices in a declining job market. It took years for these workers to recover from the full-scale assault under Ruth Richardson & Jenny Shipley, with the ECA/benefit stand-downs delivering a fearful left-right jab. Shameful.

Postscript: Obviously, the Herald haven’t been to Zimbabwe or even the US recently if they think that we have “rampant inflation”. Rampant Heraldese perhaps? What’s their game?

Update: The Standard posts in a similar vein.



5 Responses to “And the Nats want to screw these workers?”

  1. roger nome Says:

    May I degrade myself by “linkwhoring” my blog? 🙂

    I think this posts adds a little context to what you’re saying, though you’ve pretty much got it all there.

  2. MacDoctor Says:

    Actually, JP, these statistics don’t mean that individual workers are being paid less, but that employers are taking on less skilled staff at a lower wage. This is a standard response to the difficult conditions in the hospitality industry. If you think this is because evil bosses are exploiting workers then you are off your tree. Most employers in the hospitality industry are barely making ends meet.

    The Nats 90-day probation policy will change this not at all. Why would an employer want to rotate his basic staff every 90 days? Especially when s/he can employ low-wage people on a “casual” basis who, effectively, permanently have no rights and are easily “dismissed” simply by not offering them work.

  3. jafapete Says:

    MacDoc, You won’t find any references to “evil employers” in the post; rather, it’s about the low-paid workers getting hit first by deteriorating labour market conditions, and being last to feel the benefits of any recovery, and suffering the most during the bad times.

    To some extent the employers of such workers have no option but to try and cut costs any way they can. Note my reference to “domestic industry in particular, focussed on cost competition.”

    I am intrigued by the idea that such employers might be substituting lower skilled workers. This may be true to some extent, and I’d be interested in any research that shows this, and maybe doing some myself when I have the time. But it’s also the case that many such employers will feel compelled to offer less to replacement workers simply because they can, should unemployment rise.

    I have a few doubts about the method here, and should probably have included a caution to that effect. Good academic practice, I understand.

  4. ak Says:

    Macquack: Actually, JP, these statistics don’t mean that individual workers are being paid less, but that employers are taking on less skilled staff at a lower wage.

    Got any evidence whatsoever for that blurt Mac? (can’t wait to see how you idntify “less skilled” kitchen staff, waiting staff, caregivers, shop assistants and cleaners)

    Why would an employer want to rotate his basic staff every 90 days?

    Why would someone who claims to have a medical degree actually be so dumb as to think such a pathetic and screaming red herring would be taken seriously?

  5. MacDoctor Says:

    JP: I don’t know of any research in this area so my observation is purely anecdotal. However, it does make perfect sense. Given poor economic conditions, an employer can hire people who have not done the job before, pay them less than someone with experience, and then allow them on-the-job training. Because the employment is of a low-skill, practical type, his/her more experienced staff can effectively train up the less experienced, thus saving money in wages.

    This, of course, means you have to retain at least some of your experienced staff, otherwise you will have to expend resources training new staff. Hence, I don’t see employers using the 90-day probation rule to rotate all their staff and avoid the rest of the ERA.

    AK47: Try to keep up with the actual arguments, old son. When you descend into mockery, you just look like a prat… 😉

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