Maybe a fair wage model is better found by taking a steer from Mainfreight

Workplace Minister Iain Lees-Galloway scored something of a political  coup when he enlisted  former PM Jim Bolger to head the Fair  Pay Agreement Working  Group   which will make recommendations on the  design of a  sector-level bargaining system.

Bolger thus has  a  key role in  shaping Labour’s policy on  “fair-pay” agreements.

It  is an understatement to say National mandarins were hardly chuffed by Bolger’s enthusiasm  for the  task.  National strongly opposes Labour’s plan which – in effect – turns the clock back on industrial  bargaining.

Labour believes it must re-weight bargaining between employers and unions, returning  powers to the workers’ representatives which were  lost under the  Employment Contracts  Act.  This  legislation – of course – was passed under the then  National  govt  headed  by  none other than Jim  Bolger in his  first term as PM.

More  recently   Bolger has come to believe the so-called  neo-liberal  reforms of  the  1980’s  and  1990’s went too far  and unions  don’t  have enough  influence  on behalf  of  “those missing out”.

Fair pay  agreements will  set  minimum terms  and  conditions across an entire industry  or  occupation. Bolger says  fair pay  agreements are  “very much a  thing of the future”.

And  who is to say an  83-year-old cannot come  up  with  some new ideas?

Lees-Galloway says  it  is time to  move forward to  new models of  bargaining.  But pay  settlements  labelled  as  “fair pay agreements”  sound  very  much like the national award system  of  the  pre-1980’s.

The  minister  says  strikes and  lockouts will be banned during  negotiations under his   new collective-bargaining system.    But what if negotiations break down?

The  problem  is:   who will be the ultimate  arbiter of what is   “fair”?

What  may  seem a   “fair”   salary   for  a  worker in  Invercargill  could  fall far short  of  what  is  “fair”  in Auckland.  A  worker  who  is twice  as productive as the one standing next to him  probably   thinks  he  is worth  a  bit more than his mate.

The  fundamental issue,  of  course, is ideological and is  rooted  in the  history of the  labour movement,  with its core belief that workers  are   “exploited”  by  ruthless  bosses.

This has  been   re-ignited   by the evidence that corporate  salaries have  soared  in  recent years.

The counter-intelligence lies in the  performance of  companies like Mainfreight, which  at  the end of May reported a  record profit of  $112m.  In  so  doing  it  said:

In recognition of the commitment and performance of our people, this result allows us to pay our largest ever discretionary bonus to our team, up 7.4% to $20.70m.

“In NZ and Australia, we have always paid above the minimum and living wage levels, however we have chosen to further lift salaries for those at the lower end of our pay range, with an additional boost over and above our usual annual salary increase this year”.

Agreed, not  every  company  follows Mainfreight’s example.   But it’s a model  far superior  to   one that  might be devised    by a   politician,   current or  ex.

Mainfreight’s planning is calibrated to ensure it has a 100-year future, based on staff loyalty. That’s  what  NZ  Inc  should be aiming  for.

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