Wednesday, August 22, 2012

Australia's Mexico

When the US signed NAFTA in the 90's, US businesses began using Mexico as a threat. Workers were told to accept cuts in wages and conditions, or see their jobs go south of the border. Now, the same threats are being used by Australian employers about New Zealand:

Food-sector unions say Australian employers are using the threat of cheaper labour costs in New Zealand as a bargaining weapon when negotiating with their workers.

James Ritchie of the International Union of Food Workers says it has been told companies in Australia are using the threat of relocating their operations as a bargaining weapon with workers.

Mr Ritchie says this has motivated unions here to work more closely with their counterparts in Australia. He says they will share information and alert each other when a company begins to investigate moving.

Hooray! We're Australia's Mexico. Isn't National's low-wage, low-skill economic model great?

(I should add that Mexico has since improved its level of development markedly, and has been overtaken by other countries as the relocation-threat-of-choice).