Monday, February 28, 2005



5% in 05

So, the unions are getting militant and pushing for a minimum 5% pay rise. It's about bloody time. Over the past few years, the economy has boomed while wages have remained stagnant. How stagnant? Over the past five years the economy has grown by 20%, but wages have only increased by half that. The difference is reflected in soaring corporate profits, and consequently higher corporate tax receipts. And while wages are keeping pace with inflation in the long-term, there has been no compensation for increased productivity. Instead, the fruits of all of us working harder and smarter have been taken as profit by capitalists. To get an idea of how much has been taken, in the early 90's, wages and salaries were 55% of gross national income. Now that proportion has been reduced to 50%. The difference - 5% of everything we produce - now goes to business-owners. It's time workers took that 5% back. And if it can't be done now, in a time when unemployment is at a twenty-year low and businesses are screaming out for workers, then when?

8 comments:

It's interesting how angsty the right have got on my blog about this. They are constantly challenging the framing of the debate, rather than the substance. I can't decide whether that is a defensive reaction or a clever one.

Posted by Jordan : 2/28/2005 05:31:00 PM

Well, they see that the game is up. After years of promises, people finally want their jam. Squirming is a natural reaction...

As for "framing", this is a simple issue of rewarding people who work harder. Employers constantly say "if you work harder, you will be paid more". But the dirty little secret of the NZ economy is that workers have been working harder - and employers have not lived up to their end of the bargain. Instead, the fruits of that increased productivity has gone straight into their pockets, or the pockets of their shareholders.

As for tax cuts, it's a non-starter. For better or worse, we've decided that people in our society will generally support themselves through the market, either by working for a business or owning one. Sadly, it seems our business-owners don't want to live up to this bargain either, and instead they want the government to let them off the hook and boost worker's in-the-hand incomes with a tax-cut, while they laugh all the way to the bank with record (and lower-taxed) profits and executive salaries. Fuck that for a joke. Those who live by the market can die by the market - and if the market suddenly doesn't seem like such a good idea when the shoe is on the other foot, they have noone but themselves to blame.

Posted by Idiot/Savant : 2/28/2005 08:50:00 PM

Yes, but a small business owner having invested a 6 figure sum over the past few years it is now a "luxury" to start making some profit.

I don't disagree that wealth distribution is important and we are increasing gradually ages across our small (14 people) company.

But it's a mistake to make gross generalisation about all companies - some of us have worked long and hard with substantial risk to make it. Getting a job would have been the easy (and probably more logical) road ...

Posted by Lawrence : 2/28/2005 08:52:00 PM

OK, a follow-up post. In general I think the ideas in No Right Turn are a great balance to other "right aligned" blogs.

So it's shame to see the response to Jordans post by Idiot/S. It's the same ol' mentality - business is bad, them vs us. It’s outright B/S and I find the sweeping statements offensive – in the same way that you obviously find the business mentality offensive. .

Tell you what, I presume from your righteous comments that you are one of the "workers" and I presume also that you have never started a business let alone run one.

Since the economy is booming give it a go - put your balls on the line and start making those fantastic profits. As a business owner you have nothing to lose – in fact you can work even less than if you have a real job, there is no financial risk, and you’ll have a huge expense account. Of course you’ll have to get a few clients and you may need some staff, and you’ll have a number of taxation obligations to meet - but they are minor issues.

And then promise me you’ll come back to this post in 5 years time and honestly post those same comments. If you did so I’d be fairly confident in calling you a liar.

I don’t disagree that there are some ratbag employers out there – we have laws to help deal with that and while they do place pressure on employers and make our life hell at time I don’t complain about them – they are there for a reason. And of course employees do also have an option – they can leave their job for a better paying one.

This is a complex issue and I think it is a shame that it gets debated with some emotive rhetoric by people who have little experience in what they are talking about. Jordons blog is testimony to that.

Posted by Lawrence : 2/28/2005 09:57:00 PM

as an owner operator you are both a worker and a capitalist quite likely you are mroe of the former. The "evil capitalists" are the people who make money only out of money (capital) ie anyone who buys a house and gets capital gains or buys shares (particularly index funds) or similar.

Posted by Genius : 2/28/2005 09:58:00 PM

Lawrence: statistics such as average wage and labour productivity growth or corporate tax (and therefore profit) growth are by their nature generalisations - and looking at them, the argument is a powerful one: on the average, workers have been ripped off. And if this isn't true of your particular business, you'd better hope your employees know and appreciate it.

As for small business owners in general, I expect them to have less direct trouble with strike action, but they'll still have to cope with wage pressure simply from competition for workers, and this will no doubt drive a few under. Sucks for them, but that's markets for you...

Posted by Idiot/Savant : 2/28/2005 10:42:00 PM

Genius: spoken like a true Marxist :)

Posted by Idiot/Savant : 2/28/2005 10:42:00 PM

Isn't it interesting how any critique of right wing economic thinking gets turned into some full scale attack on all business everywhere?

For the record: no, I have not run a business and I currently have no intention of doing so. I am not interested in making money, and I have not yet got to the position where I might set up as a self-employed consultant.

I do not hate business or business people. That does not mean I put them first in public policy considerations. I put workers first; that is why I'm in the Labour Party not the National Party.

You can interpret that as bashing business however much you like, but you're wrong. I don't interpret your point of view as bashing workers; why you apply the reverse logic to me is something I don't understand.

Posted by Jordan : 3/01/2005 10:13:00 AM