Meet Ken Shirley;
Most folk won’t remember who Ken Shirley was, prior to his current ‘gig’ as CEO of the Road Transport Forum (RTF), representing road transport interests since July 2010.
From 1984 to 1990, Shirley was nominally a Labour Party MP. He was closely aligned with the likes of Roger Douglas, Richard Prebble, and other right-wingers who had seized control of the party during the 1980s.
From 1996 to 2005, Shirley was an ACT Party MP. As such, he was an acolyte of the neo-liberal school of economics and a strong adherent of free market forces. Part of ACT’s policies is to scrap the minimum wage.
Indeed, to under-score ACT’s abhorrence of the minimum wage, ACT’s current leader (and sole MP), David Seymour, condemned a recent rise in minimum wage levels. On 26 February this year, Seymour was scathing;
“The new $15.25 minimum wage will hit regional employers especially hard… In Auckland, $15.25 might not sound like much, but small businesses in the regions who generally charge less will struggle to bear the cost. Hikes to the minimum wage will discourage new employment, and lead to more lay-offs and business failures.
The first employees to suffer will be young, low-skilled workers who won’t be offered a chance to prove their worth. Pulling up the jobs ladder will only add to poverty in low-income areas.
This is a wage set for the distorted Auckland economy. Why should the rest of the country have to bear the same costs?”
[Fun Fact: As a Parliamentary Under-Secretary, Seymour is currently a taxpayer-funded beneficiary on a salary of $185,098 p.a. – which equates to nearly $89 per hour. One wonders if “small businesses in the regions who generally charge less will struggle to bear the cost” of Seymour’s salary?]
But returning to Ken Shirley; as an ex-ACT member of Parliament he is still most likely an advocate for the abolition of the minimum wage.
On 5 May, Shirley was invited to be a commentator on Radio NZ’s afternoon Panel, hosted by Jim Mora;
“Ken Shirley of the Road Transport Forum discusses what’s behind logging truck crashes and what needs to be done.”
At one point in the discussion, a suggestion was made that low wages in the trucking industry is not attracting the most highly-skilled and experienced workers;
Jim Mora: “How bad do you think, Ken, is this situation with truck driving?”
Ken Shirley: “Oh, the spate we’ve had in Northland is just unacceptable. There’s no excuse for roll-over[s]. We know we have some difficult roads in New Zealand with topography, Northland’s is particularly difficult.
But there’s an obligation on the drivers and the forestry companies who hire the drivers to make sure they drive to the conditions. That’s the obligation on all drivers, and the spate we’ve had is just unacceptable, and I think inevitably it seems it’s not mechanical failure, it is driver error.
Whether it’s speed, inattention, or fatigue.”
Jim Mora: “So, it’s a…what, is it a hiring of drivers problem, hiring the wrong drivers, or is it a keeping-costs down problem, Ken? What do you think?”
Ken Shirley: “Well, the two are related of course. We have a chronic shortage of H5 drivers in New Zealand. That’s the heavy combination driver, the truck and trailer. It’s a global problem, but it’s particularly severe in New Zealand at this time. We’ve had it for many years, but with the activity in the economy now, that we are currently having, there is a chronic shortage of drivers.
Many of our members throughout the country are just saying they simply cannot get drivers. And I guess inevitably, you can, in that situation, such a tight situation, out of desperation, you can perhaps hire someone who’s not as skilled as you would like or need, out of sheer necessity. But at the end of the day, there’s no excuse. This should not be happening. We’re taking it very seriously.
We’ve actually instigated a series of roll-over prevention seminars in conjunction with NZTA around the country. They started some six weeks back. And these are actually very good seminars. But we have to educate the drivers, the loaders, the dispatchers, the transport operators themselves, but we must not have this level of roll-over.”
Jim Mora: “Ken, is it the… what is it deep down? Is it the meager wages paid, as some people are saying? You’re just not attracting the skills to the industry?”
Ken Shirley: “Ah, no, you do, it’s, you know, you can have a driver error. But it’s, it’s… you have to have better training, better awareness, that has to be the answer.”
Jim Mora: “So, there was this work-force development strategy, wasn’t there, ah, put into place a wee while back to try and try to entice more people to become truck drivers because of that shortage. But what is the point of a work-force development strategy if we know what the problem basically is, which I’m interpreting as maybe a lack of training and a lack of procedures put in place in the industry – [garbled].”
After a further exchange between Jim More, Peter Elliot (one of the panelists), and Ken Shirley, the host returned the discussion to the matter of wage rates;
Jim Mora: “It does seem though, with the wage rates that we see talked about, that you might not be getting the optimum recruits for the job? Is that a fair criticism, or not?”
Ken Shirley: “Well we know that the skilled labour market across the economy, whether it’s a diesel mechanic, a skilled driver, all of of those industries are, are, reporting severe chronic shortages. And because they are so highly skilled, reliant on a high level of, of, of, experience, when there is a chronic shortage, there is a temptation to often, out of desperation [to] take what you can get. And, and, that’s, that’s when you start to get into issues that like we are seeing and that’s when you start introducing potential road safety problems.”
Jim Mora: “I understand, but would you solve your chronic shortage if you paid higher wage rates?”
Ken Shirley: “Well, indeed, and all the members I speak to want to, but there’s been a race to the bottom, it’s –
[panelist scoffing (?) noise]
… such a fiercely competive industry…”
Shirley’s admissions are astounding.
His comments appear to be a frank admission that the free market has experienced a spectacular failure on a key point in the Northland logging industry; that if there is a shortage of skilled labour, the price of that labour (heavy-truck drivers in this case) should rise – not fall – to attract skilled labour. That is a basic tenet of supply and demand in the free market system.
As the guru of free market economics, Milton Friedman put it;
“But when workers get higher wages and better working conditions through the free market, when they get raises by firm[s] competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody’s expense. “
And Investopedia described a free labour market thusly;
Assuming there are a large number of employers in a region, or that workers are highly mobile geographically, the wages that a company will pay workers is dependent on the competitive market wage for a given skill set. This means that any company is a wage taker, which is simply another way of saying companies must pay competitive wages in order to obtain workers.
None of which seems to be happening in Northland at present.
To the contrary, logging companies – according to their own spokesperson, Ken Shirley – are engaged in a “a race to the bottom” with drivers’ wages.
To compound the problem, in April of this year, Shirley specifically opposed and condemned outright any attempt to increase the wages of drivers;
“The link between remuneration and road safety is highly questionable and as a recent PWC report highlights, the system will result in a net cost to the Australian economy of more than A$2 billion over 15 years.
It is therefore very concerning that the Labour Party here advocated for the same policy and campaigned on it during the last election.”
National awards and government-imposed orders are not the way to lift industry wage rates or make the industry safer. All they do is saddle the industry with inflexible and time-consuming obligations and additional costs.
Let’s not repeat Australia’s mistake in New Zealand. It has been proven that national awards burden the economy and cost jobs and I hope that Labour and other political parties here will accept that reality and ditch the concept once and for all.”
Shirley’s comments last month are in stark contrast to his public lamentations on Radio NZ.
Not only has the free market failed in one of it’s key tenets – but Shirley is actively opposed to raising wages by any means necessary, to attract skilled, experienced truck drivers.
This should serve as a clear lesson that the innate contradictions of the free market ideology – many of which are little more than articles of faith – will eventually become more and more apparent.
Shirley has inadvertently helped with the slow dismantling of the neo-liberal fantasy.
Unfortunately, knowing how the system operates in this country, it will takes catastrophic events with several tragic deaths, before the government acts on this growing problem.
That’s how we roll in New Zealand.
Wikipedia: Ken Shirley
ACT NZ: Welfare and family
Parliament: Current MPs – David Seymour
Good Reads: Milton Friedman
Investopedia: Breaking down ‘Demand For Labor’
Road Safety Remuneration Tribunal: About road safety remuneration orders
This blogpost was first published on The Daily Blog on 10 May 2016.
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– Radio NZ, Nine To Noon –
– Wednesday 25 February 2014 –
– Kathryn Ryan –
On Nine To Noon, Kathyrn Ryan interviewed Labour’s leader, David Cunliffe, and asked him about coalition negotiations, policies, polls, and other issues…
Click to Listen: Election year interviews (27′ 50″ )
A major policy statement by David Cunliffe;
@ 22.00: “We will create incentives for private employers to be certified living wage employers, who pay the living wage to all their employees, by giving them a preference in Crown contracts.”
This will not only support firms that pay their staff properly – but will de facto give preference to local businesses to supply goods and services!
If this doesn’t motivate Small-Medium Enterprises to switch their allegiances from the Nats to Labour, I don’t know what will!
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– Politics on Nine To Noon –
– Monday 10 February 2014 –
– Kathryn Ryan, with Matthew Hooton & Mike Williams –
Today on Politics on Nine To Noon,
Click to Listen: Politics with Matthew Hooton and Mike Williams (22′ 58″ )
- John Key’s meeting with Tony Abbott
- CER, Aussie supermarkets boycotting NZ-made goods
- migration to Australia
- low wages, minimum wage
- National Party, Keith Holyoake
- paid parental leave, Working for Families, Colin Espiner
- Waitangi Day, Foreshore & Seabed, deep sea oil drilling, Nga Puhi
- MMP, “coat tailing”, Epsom, Conservative Party, ACT
- Len Brown, Auckland rail link
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Rest home care workers are amongst the lowest paid in the country. At around $14-$15 an hour, they are paid a pittance for the important work they do; caring for aged New Zealanders in the twilight of their lives. They tend to our parents and grandparents, keeping them safe, clean, and offering human companionship at a time when many elderly have less and less contact with the community.
On 1 March of this year, rest home workers went on strike, campaigning to raise their wages from the pathetic $14.61 an hour they were being being. The following pics were of striking rest home workers in Upper Hutt,
See previous blogpost: 1 March – No Rest for Striking Workers!
A month and a half later, Ryman Healthcare – one of the largest providers for aged care in New Zealand – announced a record $84 million profit, for the year ending 31 March 2012. This was an increase of 17% on the previous financial year.
For ten years in a row, Ryman had posted record profits. Quite clearly this industry is not short of a ‘bob or three’.
Chairman Dr David Kerr said “the company faced some major challenges in Christchurch over the past 18 months given the earthquakes, and had responded with a performance which had exceeded its own targets “.
So obviously productivity was not a problem for Ryman. A 17% increase in products – in an otherwise stagnant economy and continuing global financial downturn – shows that the aged care industry is doing very nicely.
On 28 May, Human Rights Commissioner, Dr Judy McGregor, did something that few office-bound state sector workers do; she went undercover to discover for herself what kind of working conditions rest care workers put up with for $14.61 an hour,
As Dr McGregor stated,
“The complexity of the job was actually a surprise for me. It’s quite physical work, and it’s emotionally draining because you are obliged to give of yourself to other people. Saint-like women do it every day so that older New Zealanders can have a quality of life.
I’m not sure if I could have. I’m not sure I had the physical stamina and I didn’t want to hurt someone.
On any given shift you would be in charge of six, seven older people, and you would have to wake them, get them up, get them showered, get them toileted, feed them, and the whole time you were conscious that you had another five to go on your shift. It’s like working constantly to deadline.
The reliance of New Zealand, of all of us, on the emotional umbilical cord between women working as carers and the older people they care for at $13-14 an hour is a form of modern-day slavery,” she said in the report.
It exploits the goodwill of women, it is a knowing exploitation. We can claim neither ignorance nor amnesia.”
National’s Associate Health Minister Jo Goodhew replied,
“It is important that we take this seriously, that we look at it carefully and we look at what we are doing and what we can do before we provide a considered response.”
However, Dear Leader Key would have none of that, and firmly squashed any suggestion of paying rest home care workers decent wages. Only a few hours after Jo Goodhew announced that this was a problem demanding that “ we look at it carefully “, her boss stated bluntly,
So there we have it. According to Dear Leader,
“It’s one of those things we’d love to do if we had the cash. As the country moves back to surplus it’s one of the areas we can look at but I think most people would accept this isn’t the time we have lots of extra cash.”
Falling in line, Goodhew, conceded that whilst aged care workers were paid at “lower end“, she rejected suggestions that they were being exploited,
“I personally don’t believe we should be describing it as modern-day slavery.”
Gosh, that’s ‘big’ of her. It’s not “ modern-day slavery “.
I wonder what she’d call it?
Especially when it was announced todat that Lo! And Behold! Ryman had posted yet another profit!?!? This time a record half-yearly profit (from 1 April),
“The company added another notch to its 10-year sharemarket performance of climbing profits by posting a record half-year profit after tax of $69 million. Its share price rose 6 cents to close at $4.14.
Shareholders will receive an 18 per cent higher dividend for the half-year of 4.6 cents a share. All up, about $23 million in dividends is going to shareholders in the first half. “
“Since listing in June 1999, Ryman Healthcare has delivered its shareholders a total return, which includes share price appreciate and dividends, of 1,043%, or 24.3%pa. By cracking the 1000% mark (i.e. returning 10 times the original investment) brokers will, with a good deal of admiration, refer to Ryman as a’10-bagger’.” – Craigs Investment Partners
Wouldn’t it be nice if the $23 million being paid to shareholders was instead paid to the care workers who actually did the hard work?
Who is it that looks after granny and/or grandad – the “Saint-like women do it every day so that older New Zealanders can have a quality of life“?
Or some shareholders sitting on their arses and sipping chardonnay?
Here’s a thought for Middle Zealand, politicians, and Ryman shareholders; the course of Nature will not be deviated. Every one of us is growing older.
(You can see where I’m heading with this.)
There will come a time when Middle Zealand, politicians, and Ryman shareholders, and the rest of us will eventually require the services of aged care facilities.
Do we really want to be cared for by underpaid workers who may eventually give up any semblance of dedication to their job, and lose any measure of empathy for aged folk in their charge? That rest home workers may finally one days have a gutsful of being exploited?
If we want to be treated well in our twilight years – shouldn’t we first be looking after those workers who will be caring for us?
John Key sez that paying rest home care workers is “one of those things we’d love to do if we had the cash“.
Rubbish. The money is there.
It’s just going to the wrong people.
C’mon New Zealand – sort it out!
Previous related blogposts
1 March – No Rest for Striking Workers! (1 March 2012)
No Rest for the Wicked (23 March 2012)
Roads, grandma, and John Key (18 July 2012)
John Key’s track record on raising wages – 4. Rest Home Workers (11 November 2012)
Record profit for Ryman (17 May 2012)
PM: No money for aged care workers (28 May 2012)
Resthome spy hails saint-like workers (28 May 2012)
Ryman plans cautious Aussie debut (16 Nov 2012)
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