Will the Labour Party's proposed Fair Pay Agreements do the business?

by Jane Clifton / 14 June, 2018

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The tsar: Jim Bolger. Photo/Getty Images

A mechanism like Fair Pay Agreements is overdue, but it's hardly a comprehensive future-proofing or even future-looking device.

The rule in politics goes that your enemy’s enemy is your friend. It’s way more vicious, though, when your enemy makes friends with your friends. It’s called “up-yours poker”.

Jim Bolger landed in the National Party’s dogbox for bestriding the last Labour Government’s NZ Post and Kiwibank empires. National later “saw” its blue ex-Prime Minister and raised it a red peer, giving Sir Michael Cullen, Labour’s old Finance Minister, Bolger’s gigs in 2010.

But Labour has just swept the table: Sir Michael is now chairman of its Tax Working Group, and as of this week, Bolger is now presiding over potentially massive labour-market reforms.

Other countries tend to call these grand policy co-optees tsars. To the Nats, Bolger is now more of a Rasputin. Nothing strikes at the heart of core National-voter fears like a resurgence of worker power over business. That one of its own most illustrious grandees is the chief viper in that bosom is pretty hard to take.

Normally, it’s good manners for MPs to grin and bear these inter-party swapsies, knowing that the public greatly approve when party politics at least seem to be put aside for the sake of enduring policy fixes for serious problems. This time, National’s response has been openly spiteful, warning of a return to the 1970s tripartite merry-go-round, in which, as Minister of Labour, Bolger and his then splendid sideburns figured memorably.

Tripartite talks were like today’s post-election coalition marathon, except each of the three parties behaved like Winston Peters and it could go on all year every year. The Federation of Labour, Employers’ Federation and the Government traipsed endlessly in and out of meeting rooms emitting blokey monosyllables – “Mumble-hrrrumph gummint; no comment; fdrshinalabour-no-seddlmint” – until some mutually unsatisfactory and impermanent accord could be grudged. Then, that duly failed and everyone began again.

Eventually, political orthodoxy decided “gummint” didn’t add much value and unions and employers were left increasingly to their own devices, subject to each decade’s see-sawing legislative framework. Under Labour, organised workers had more clout, under National, less.

Thus far, the Nats are winning. From a historic high in the mid-1980s, membership of unions has declined to the point that fewer than one in 11 private-sector employees are believed to belong to one. Long periods of high unemployment, contracting and the “gig economy” have increasingly made unions seem either irrelevant, a luxury or an actual risk to vulnerable work-hopefuls. The public-sector unions have maintained a membership of more than 50% of the workforce in the state’s biggest sectors, but many members, like teachers and nurses, have still fallen well behind the median wage.

The union movement’s beacon of hope is the success of the E tū union’s court action to recalibrate the earnings of care workers, and doubtless there will be more pay-parity rebalancing work to come.

Retro reform

But where National has a reasonable grievance – and some in Labour may, too – is that Bolger’s labour-market reform working group has a worryingly retro look.

It’s vital to consult the unions and employers, of course, but the workforce is no longer tripartite. It’s governed by rather more powerful factors such as the internet and geopolitics, with artificial intelligence (AI) bearing down fast. Retail, transport, design, communications, construction, manufacturing, even highly specialised careers like medicine and law are constantly changing as a result of new technological capabilities. And, just when we thought we had a broad global consensus on free trade, we’re in for a tariff war (admittedly, that’s utterly retro) and a white-knuckle global reckoning between sovereign governments and multinational companies over tax.

If that’s not enough uncertainty for the average person, then even the evidence behind the most well-understood individual decisions people make about their work lives is being upended. University degrees, vocational or otherwise, are no longer reliable predictors of future income or sustained employability. Trades may offer more certainty, but for how long? Which ones will AI affect? Today, this country is chronically short of truck drivers; tomorrow, we’ll need people to fix driverless vehicles.

Labour in Opposition was widely derided for its policy in this area, but its Future of Work report, released in late 2016, surely provides a superior founding document to resetting our workplace policies than what was outlined this week.

Mexicans with cellphones

Future of Work looked far forward. The focus of this new 10-person working group seems more on fixing what is, without apparently considering how impermanent this will inevitably be.

The centrepiece is a newly coined mechanism called Fair Pay Agreements, which, it appears, will be imposed on or accepted by a few sectors a year in which there are a high number of low-paid workers. This is overdue, but it’s hardly a comprehensive future-proofing or even future-looking device.

Admittedly, Labour is speaking to its core voters when it talks, in the fair-pay context, of strengthening unions and restoring fairness to workplaces.

We’ve seen the nadir of worker exploitation with the rise of zero-hour contracts in recent years and in our policing of the dismayingly widespread near-slavery of immigrants.

There’s also little dispute that past governments have utterly failed to make New Zealand a high-wage economy, let alone prevent its sag towards official low-wage status. Remember how it stung – and not just for the ethnic slights – when the great Hobbit dispute disclosed that some employers regarded Kiwi workers as “Mexicans with cellphones”?

This exercise looks like a missed opportunity to engage the traditionally Labour-resistant business community on common ground. Workers, bosses and governments should figure out how to work together to avoid being steamrollered by global titans. Continue our traditional cat-and-dog patterns of enmity and we may as well restyle ourselves AotearoaApple-Google-AmazonTM and have done with it.

Business will not miss the symbolism of a new workplace tsar who talks about neo-liberalism and greed and doesn’t quite get around to not lumping them into those categories.

Together with Workplace Relations Minister Iain Lees-Galloway’s barb that employers who can’t afford whatever is going to be deemed fair pay can just go out of business, the recruitment of Bolger is all too resonant a gesture. Even Gareth Morgan would have been less objectionable.

Besides, who’s next? Ruth Richardson? Mike Moore? Let’s hope they de-escalate this “up-yours” ante before someone makes Michael Laws tsar of something.

This article was first published in the June 16, 2018 issue of the New Zealand Listener.

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