2. Edwards: Unravelling the 'back to the 70s' view

Claims that we are headed back to 1970s levels of strikes and stoppages are absurd, writes Dr Bryce Edwards. Photo: Lynn Grieveson

Dr Bryce Edwards of Victoria University argues the recent surge in industrial action it’s not necessarily down to the change of Government.

Industrial muscle is currently being flexed across a number of sectors. This was almost inevitable, given the years of austerity and low levels of wage and salary progress for many workers. Having been on the back-foot for a generation, workers are now seizing the chance to assert themselves.

In the public sector there is little doubt that most union members would have had their expectations for pay rises boosted by the change of Government. They will see current negotiations as an opportunity to make real gains that doesn’t come about too often.

But any increase in private sector industrial action is harder to explain, because the new Government has not yet actually produced any changes to the industrial relations framework. And so, legislative changes couldn’t have any direct effect on bargaining between employers and unions.

The Government’s decision to increase the minimum wage will undoubtedly have an impact. However it could be argued that forcing employers to increase wages by law – very significantly in the case of low wage workers – will actually make it less likely that unions will need to strike to achieve significant pay rises.

Levels of industrial action are still relatively low

While we don’t have figures for this year, strikes and stoppages are at a very low level historically and have been for some years. Compared to other OECD countries as well, the level of industrial disputes is low.

Claims that we are headed back to 1970s levels of strikes and stoppages are absurd, as even the most casual glance at the actual statistics shows. In 2017, there were six work stoppages involving 421 employees, losing 370 person days of work. Compare that to 519,000 days lost on average from 1983 to 1990. So even if there does turn out to be an upswing in industrial action, it’s off an extremely low base, and does not constitute anything like a return to what we’ve seen in the past.

Employment disputes would also have occurred under National

Many of the public sector disputes at the moment are a result of various collective contracts coming to an end around the same time. It’s simply a coincidence that this is happening during the beginning of a new Labour-led Government.

It may also be simply part of the historic political pattern whereby National-led Governments constrain pay and public sector spending while they are in government, and focus on tax cuts, while Labour-led Governments focus on increasing public expenditure and expanding services while in office.

Even then, pressures cannot be resisted indefinitely. For example, there is little doubt that National would have faced as strong, or even stronger, demands for pay increases from public sector workers such as nurses and teachers. If Labour had not been elected, nurses were clearly in no mood to wait another three years for the chance of a more sympathetic Government.

And both the pay equity settlement and the changes around zero hour contracts that National was forced into making show that Governments of all hues can be influenced by union campaigns and activity.

There is another reason why 1970s levels of strikes are unlikely to eventuate. Unions are less inclined to flex their industrial muscle when “their” party is in power. The links between the Labour Party and the unions historically meant that unions have tried not to embarrass their political allies with too much strike activity and, particularly in the public sector, they will have a much better access to the levers of power than they would under National.

What happens next

The next phase for this Government may see some real long term change, however. The proposed fair pay agreements, if successfully put in place, could harbour a major shift in employment relations for large number of workers.

However, this won’t be achieved through industrial action – both because it won’t be legal under the framework and, more importantly, there will have to be cooperation and agreement from major employers in each sector before they can be put in place.

That’s not to say that many employers and employer organisations won’t push back hard and campaign strongly against them, but it certainly won’t be as simple as unions and the Government vs business.

Furthermore, there are increasing numbers of large and small businesses who recognise that the growing inequality that resulted from policies that were previously accepted as good for business is, in fact, a real problem for them as well as for wider society.

Businesses in Auckland and Queenstown, for example, are only too aware that the spiralling cost of housing for their employees creates significant recruitment, retention and pay problems for them. Mass consumer businesses, especially those competing for discretionary expenditure, need customers with cash to spare. For the vast majority of consumers in New Zealand that cash comes from wages and salaries.

The Government’s move to implement a living wage for all core state sector employees and expand that out to contractors as well may be an early sign of broad based change on the horizon. Nearly all major improvements in pay and conditions have traditionally been led by the public sector and then flowed through to the private sector.

That hasn’t been the case for a generation, but the signs are that the tide is turning.