Speech to CTU Biennial Conference
Let me first thank all the new unionists and members in the room.
There is nothing more important to improving people’s working lives than people making the decision to care, to get on board and help, to take up the reins and get involved.
Congratulations to you.
You bring the hope of the future with you.
Let me acknowledge:
- CTU kaumātua – Kiwhare Mihaka and CTU Rūnanga Co-Convenors Laures Park and Grant Williams.
- CTU President Richard Wagstaff.
- CTU Vice-President – Rachel Mackintosh and Vice President Māori – Syd Keepa.
- Incoming Secretary – Melissa Ansell-Bridges, congratulations on your election
- And to outgoing Secretary Sam Huggard who has done an excellent job working tirelessly with warmth and tenacity.
Thank you all for working so hard to improve the lives of workers in this country.
New Zealand’s economy is in good shape. We have one of the highest employment rates in the OECD, we have near record low unemployment, and are keeping GDP growth in line with our OECD partners. Our economy has solid foundations.
There are specific areas of concern though.
Decades of declining standards
For a number of decades we have experienced increasing levels of inequality and poverty. Too many hard working New Zealanders are struggling, too many children are living in poverty.
Too many parents tell us they are working more than one job to get by and aren’t getting enough time with their children.
I recently have met with security guards who told me about the struggles they have at work. A meeting organised by their E Tu representatives.
Their wages are low because their bosses are competing in a race to the bottom, undercutting each other.
Not only are their wages low though, many don’t have good health and safety procedures. Whether they are working on their own in dangerous situations or there is not enough cover for them – that’s just not good enough.
I’ve also been told about the difference that lifting the minimum wages has made to people’s lives – how they don’t have to work such long hours to pay the rent, how they can now spend time with their children as they should.
We have all heard about issues of migrant exploitation – people not getting paid properly, being abused and having to pay huge costs out of low wages for accommodation.
These issues did not just happen overnight. They are long term problems that have developed and built up over decades.
Significant reductions in support for New Zealanders’ wellbeing were made through the 1980s and 1990s.
Support for businesses and families, healthcare and welfare was significantly cut in the name of ‘market flexibility’.
While some changes may have been useful for GDP growth, we are still dealing with the negative impacts to our wellbeing today.
Within 20 years NZ lost its status as one of the most equal in the OECD, and the inequality has kept increasing since then.
While incomes at the top increased quickly and GDP grew steadily, incomes at the bottom stagnated and child poverty more than doubled.
It is clear that the benefits of economic growth have not been shared fairly in New Zealand.
The wealthiest have seen their salaries grow at twice the rate of our middle income earners since 1998.
For middle and low income earners only the minimum wage, set by government, has increased at reasonable percentages.
It’s also concerning that low wage growth has lagged behind increases in labour productivity increases. Even overall average wage growth is not keeping up with increases to productivity.
New Zealanders are working harder and longer, but are not fairly sharing in the rewards of their work.
Weaknesses in the labour market
New Zealand’s labour market has played a role in this increasing inequality under the guise of ‘market flexibility’, and it now has systemic weaknesses – to summarise:
- workers on low wages are not receiving wage increases of the same proportion as those on high wages resulting in increasing inequality
- those workers are more vulnerable with little access to collective bargaining
- some businesses that pay good wages are having to compete with others who cut wages and conditions to win contracts, meaning fair employers miss out
- wage increases have not kept up with productivity increases in many sectors and occupations
- while New Zealanders work long hours, their productivity per hour is low, likely because we are not investing enough in skills development, training, or research and development to help improve on productivity.
New Zealand is an outlier amongst nations we like to compare ourselves to in not having sector-wide collective agreements.
The OECD recommends countries adopt sector bargaining alongside enterprise and individual bargaining, because this combination is associated with better employment and great equality.
The OECD has also advised that countries where broad framework conditions are set at sector-level and detailed provisions at firm level tend to deliver good employment performance, better productivity outcomes and higher wages for covered workers.
Fair Pay Agreements would create a new mechanism for collective bargaining, to set binding minimum terms at the sector or occupation level.
A well-designed system would ensure workers are rewarded fairly for their work and protect employers from competitors who gain market share by driving down workers’ terms and conditions.
By preventing a race to the bottom you ensure that competition has to be based on better products and services, and investment in skills, training and equipment – all more sustainable routes to productivity growth, and certainly more likely to produce productivity improvements than low wages and poor conditions.
The Government is building a sustainable, productive and inclusive economy. To do this we need modern workplaces that value hard working New Zealanders, invest in people’s training and skills for the future, share their ideas and reward them appropriately.
That means we need to address the difficult long term problems that have led to inequality and unfair working conditions for both New Zealand workers and migrant workers.
So far we have introduced the Wellbeing Budget, lifted the minimum wage, raised Working for Families payments, provided support for families with newborns, increased Paid Parental Leave, access to free healthcare and are progressing pay equity legislation.
We have also increased support for research and development, education and training, and are working with businesses, unions, academics, iwi and the public in key areas.
We are now taking the time to get the design of a Fair Pay Agreement system right, and also taking time to ensure we understand the problems of migrant exploitation so that we can prevent it happening at all.
I want to thank the excellent work of the union members, and in particular Richard Wagstaff for doing the hard yards nutting out the key points with Business and academics on the working group.
I can guarantee he has fought hard, and is still doing it, to ensure that we do everything we can to support workers to get a good result.
In the next few days I will be launching discussion documents that provide options on how we can take further action to build an inclusive economy where more of us receive our fair share at work and businesses can compete on great products and services, not undercutting wages and conditions.
The Fair Pay discussion document is not a proposal, it is a set of policy options. It is the result of policy work that was done to take the working group proposals to the next level of detail.
It is essential that we get broader public feedback in order to finalise this work.
It will be your opportunity to push hard for both what you agree with and what you don’t. Your feedback will make a difference.
We want your feedback on these issues, firstly how to tackle temporary migrant worker exploitation and secondly how to design a Fair Pay Agreements system to protect workers.
Our aim across both these pieces of work is to:
- create a level playing field where good employers are not disadvantaged by providing reasonable wages and conditions.
- build a highly skilled and innovative economy that provides well-paid, decent jobs, and delivers broad-based gains from economic growth and productivity fairly to all.
New Zealanders deserve safe and collaborative workplaces where minimum employment rights are upheld and people are fairly rewarded for their work.
The consultations are designed to help achieve this vision, by exploring ways to ensure workers, particularly our most vulnerable workers, are treated fairly and are protected from exploitation.
These protections will also support good employers to ensure they aren’t being undercut by exploitative ones.
I want to finish by recognising that it is Thank Your Cleaner day today.
- Our cleaners provide the essential services that keep our businesses and buildings going behind the scenes, often through the night. I greatly appreciate their work.
- Prime Minister Jacinda Ardern also appreciates it and I’d like to share with you part of her speech in the Adjournment Debate of Parliament last year.
- There’s a tradition that the Prime Minister starts by thanking the Speaker of the House. But that’s not her style.
- She started by thanking the man who prepares her office in the morning before she starts work, gets everything in order so she can hit the ground running. Here’s it is:
- “Every morning when I come into the office, and even if no one else appears to be there at the time, without fail the floors are clean, the kitchen is clean, and there's a jug of water sitting on my desk. To the cleaners in this place, we say thank you. To the Prime Minister's office messenger, a lovely man called Alex—I can attest he gets up earlier than a newborn—I want to say my special thanks to him for his service and his smiles.
- I say thank you to our cleaners too.
- Many of you in this room today contribute to lifting the lives of working people in ways we aren’t always aware of so, finally, I say thank you – we are stronger together.