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John Key’s track record on raising wages – 7. Part 6A – stripped away

11 November 2012 6 comments

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Continued from: John Key’s track record on raising wages – 6. Youth Rates

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7. Part 6A – stripped away

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One of the most far-reaching aspects of National’s covert agenda to make the country’s workforce  “more flexible” (translation; more exploitable)  is their stated intention to remove Part 6A  of the Employment Relations Act (ERA),  which continues (or transfers under similar conditions and pay) the employment of  low-paid employees such as caretakers, cleaners, catering workers, hospital orderlies and laundry workers,  after a business is restructured or sold.

See: Part 6A – Continuity of employment if employees’ work affected by restructuring

Part 6A gives vulnerable, low-paid workers, the right to keep their jobs on the same terms of employment when  transferred to the new contractor.

See: Labour law changes announced

Labour Minister Kate Wilkinson has assured the public that this law-change will apply only to  small and medium-sized businesses with less than 20 employees.

Pardon me? Didn’t they say the same thing for the 90 Day Trial Period law? Oh yes, I believe they did,

Trial employment periods for up to 90 days for workplaces with fewer than 20 employees will be available from April 2009.” – Kate Wilkinson,  11 December 2008

See: National policy – 90-day trial period to provide job opportunities

Once National’s so-called “reforms” were bedded in, they changed it, implementing the policy they they had wanted all along,

The 90-day trial period is to be extended to enable all employers and new employees to have the chance to benefit from it.” – Kate Wilkinson,  18 July 2010

See: National Policy – 90-Day Trial Period extended to all employers

Sneaky, these Tory politicians. Ya cain’t take your eyes offa them, even fer a minute, Jethro!

This blogger has zero doubt that the same means of  removing Part 6A will first apply to small business with fewer than 20 staff – and then later (a year?) will be extended to all employers.

Once Part 6A is removed from the lawbooks, the lowest-paid workers in our communities will be vulnerable. A new employer will  be able to re-write their contracts at whim; reduce  their pay; change their conditions, or dismiss them altogether. There are many such small business and the impact on their workers could be severe.

Are we detecting a common them with National’s labour “reforms”?

Green Party industrial-relations spokeswoman, Denise Roche, was 100% on-the nose when she described these – and other “reforms” as,

This decision is straight from the Bill Birch era of industrial relations.”

This is indeed a return to the Employment Contracts Act – by stealth. National is too gutless to face the country by honestly presenting a manifesto returning to the ECA.

Remind us,  Mr Prime Minister, how scrapping Part 6A  will raise wages, as per your promises?

Next chapter: 8. An End to Collective Agreements

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John Key’s track record on raising wages – 6. Youth Rates

11 November 2012 6 comments

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Continued from: John Key’s track record on raising wages – 5. The Minimum Wage

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6. Youth Rates

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When Labour was elected into government in 1999, replacing the highly unpopular Shipley-led National administration, one of their first actions was to radically reform the  Youth Rate,

  1. From 2001 to 2008 the adult minimum wage applied to employees aged 18 years and over. Prior to that, the adult minimum wage only applied to those aged 20 years and over.
  2. From 1 April 2008, the adult minimum wage applies to employees aged 16 years and over, who are not new entrants or trainees.
  3. The youth minimum wage applied to employees aged 16 and 17 years. From 1 April 2008, the youth minimum wage was replaced with a minimum wage for new entrants, which applies to some employees aged 16 or 17 years.
  4. The training minimum wage was introduced in June 2003.

See: Dept of Labour – Previous minimum wage rates

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Source

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It did not appear to unduly impact on unemployment, which consistantly tracked downward in the 2000s, until the down-turn caused by the Global Financial Crisis began to impact on our economy, in 2007/08.

On 9 October, Labour Minister Kate Wilkinson announced that National intended to introduce a new Youth Rate, to take effect in April, next year. The rate would be set at $10.80 an hour – compared to the minimum rate of $13.50 an hour currently, and would include 16 to 19 year olds.

As Scoop.co.nz reported,

That equates to $10.80 an hour, or $432 before tax for a 40-hour week. From April next year, the ‘Starting Out Wage’ will apply to 16- and 17-year-olds in the first six months of a job, to 18- and 19-year-olds entering the workforce after spending more than six months on a benefit, or 16 to 19-year-olds in a recognised industry training course.”

See: NZ teens face $10.80 an hour youth wage rate

It is doubtful if National’s Youth Rate will actually create new jobs. More likely, a drop in youth wages will simply create more ‘churn’ in employment/unemployment numbers.

As David Lowe, Employment Services Manager for the Employers and Manufacturers Association, inadvertently revealed,

Without an incentive an employer with a choice between an experienced worker and an inexperienced worker will choose experience every time.”

See: Starting-out wage will help young people onto job ladder

So there’s no new job for the  younger worker – s/he is merely displacing an older worker. Which probably results in  older workers joining the migration to Australia.

End result; a loss of skill and experience for New Zealand, and a gain for our Aussie cuzzies.

Nice one, Mr Key. Remind us when you took on the role of staff recruiter for Australia?

On top of this, we have this bizarre rationale from Kim Campbell, CEO of the Employers and Manufacturers Association, who is arguing that young people should be paid less because they have less to pay for. I kid you not.

She said,

Remember these people are not raising a family or running a household on this money –nobody expects them to – but it does give them some money to get started on.”

Campbell’s remark are offensive on several levels.

Firstly, National’s intention to return to  Youth Rates for 18 and 19 year olds, as well as 16 and 17 year olds, is simply unreasonable. These people are  young adults, and those studying  at  polytech and  University Students will soon be earning less,  even while having to pay Student fees; course-costs; and living expenses like rent, food, power, and other financial committments.

Secondly, 18 and 19 year old are as able to have families as their older counterparts.

Thirdly, by what logic is it of  Ms Campbell’s business  that “these people are not raising a family or running a household on this money“?! It’s none of her damned business what 18 and 19 year olds spend their wages on.

Conversely, does that mean Ms Campbell will encourage companies to pay a higher,  living wage,to those workers who do happen to have families?!

Yeah, right.

If  National has a secret agenda to motivate more young people to head overseas, such a plan will succeed beyond their wildest dreams.

18 and 19 years olds – old enough to get married; old enough to get drunk; old enough to get killed in a warzone – but not old enough to be paid the same adult rate as a 20 year old?

National should take note;  it’s true that 16 and 17 year olds can’t vote.

But 18 and 19 year olds can – and do. I bet they just can’t wait to vote at the next election.

And precisely how does this raise wages, as per Dear Leader’s promises?

Next chapter: 7. Part 6A – stripped away

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Addendum

In June last year  Prime Minister John Key said the prospect of a new youth rate was unlikely,

“I don’t think there’s a high probability. Whether we’d actually bother embarking on that it’s far too early to say.”

Source: Govt reintroduces youth wage

Ten months and one election later, preparations are under way to legislate.

Is ten months “to early to say“?

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A lethal lesson in de-regulation…

18 August 2011 1 comment

More here.

De-regulation and an open, unfettered economy was the big fashion in the late 1980s (“Rogernomics”) and 1990s (“Ruthenasia”). It was argued by neo-liberals; the wealthy; and by segments of wannabee-rich middle class, that de-regulation was the new paradigm that would create an efficient; highly productive; wealthy society.

We would become the “Ireland” of the South Pacific – and Ireland at the time was doing extremely well, economically.

So the National government of the day, led by Prime Minister Jim Bolger, and with Ruth Richardson as his Minister ofFinance, continued what a Labour cabal consisting of Roger Douglas, Richard Prebble, Peter Dunne, Michael Bassett, et al, had started: de-regulating the economy.

The new mantra was “De-regulation, good. Government regulation, bad”.

It was a childishly simplistic notion, and one that would cost us dearly in terms of vast sums of money; destroyed dreams; and lives lost.

The years passed. The 20th Century turned into the new 21st Century. The public became tired of National, and elected a new, Labour government, led by Helen Clark. Labour had a hard task of paying off a decade of accumulated debt and resolving deep social problems that were afflicting the country; growing poverty; high unemployment; increasing cases of poverty-related disease; lack of support for the country’s mentally ill;  a loss of state housing (National had sold off 13,000 state houses during it’s tenure); and other pressing matters.

There were also two silent time-bombs waiting in the shadows.

In the early 1990s, changes were made to the Building Act 1991/Building Regulations 1992  with several  subsequent amendments.

Effectively, these amendments de-regulated much of the industry, permitting untreated timber to be used where, previously, only treated varieties could be using for house construction. New materials could also be used that had not previously been common in residential building, including a newly fashionable “Meditteranean style”.

Similar de-regulatory events were to take place in Health & Safety, in 1992,  with regards to mining. In 1998 seven dedicated OSH mines inspectors were absorbed into OSH.  The disbanding of the mines inspectorate group, and moving its functions to the Department of Labour, had saved about $1 million. Health and safety (mines)  inspector, Michael Firmin,  was the sole inspector of mines left.

The bombs were set, and the fuses lit.

On 26 May 26 2001, the first “bomb” went off, with a NZ Herald article  revealing that a growing number of new or near-new houses were rotting because of lack of water-tightness.

On 19 November 2010, the second “bomb” went of at Pike River mine, as a methane explosion killed 29 mine-workers.

Investigation into both the “Leaky Homes Syndrome” and the Pike River disaster have one, inescapable common factor: regulations that were once in place, had been removed; altered; or watered-down. In both cases, de-regulation had meant a lack of direct responsibility for ensuring that whatever regulations did remain, were not observed.

Hopefully, New Zealand has learnt a harsh, expensive, and deadly lesson about de-regulation. Regulations are there for a reason. Like the road speed limit. We may not always like the nuisance that rules and regulations provide – but they exist for our safety and our financial security. (When the Huntly West mine blew up in 1992 there were no fatalites. (Former) Chief coal mine inspector Harry Bell had closed it down 36 hours before.)

If we give away regulation for expediency, or because it fits some trendy political free-market ideology – then be prepared  for the consequences. Because as sure as day follows night; there will be consequences.

One thing I have noticed about my generation, the “Baby Boomers”; we seem to be child-like in so many respects. We are  impatient – we want it now. Until the Cullen Fund – we didn’t want to save for our retirement (the Fund had to bribe us with a $1,000 kick-start from the government – ie, us, the taxpayer). We accepted tax-payer funded free education from our parents – only to abandon it and force User-Pays on our own children, through Student Fees. Charming.

We ignore complicated social issues – in favour of displaced penguins and “Wellywood” signs. We lose interest in matters that demand our long-term attention – a fact that politicians are aware of, and exploit to their benefit.

By god, we need to grow up. Because, collectively, we are still making incredibly bad or stupid decisions based on self-interest and short-term gain.

Our lack of collective wisdom; our inability to see things long-term; our willingness to accept short-term gain – and never mind the consequences – should give us cause for concern.

Unfortunately, I am pessimistic that we will “grow up” any time soon. In fact, I await the next silent “bomb” that is ticking away, somewhere, in the shadows. How much will it cost us? And will we pay dearly, in lives?

Postscript: following the global banking crisis, Ireland is now bankrupt and a fiscal basket-case needing bail-outs from the EU to survive.