Tuesday, September 02, 2014

The Greens on work and wages

The Greens released their work and wages policy today, targeted firmly at improving living standards and reducing inequality. The headline policy is an immediate increase in the minimum wage to $16/hour, followed by annual increases to reach $18/hour in 2017. This is combined with a living wage for public servants (and outsourced contractors). We saw in 1999 - 2008 how this sort of bottom-up pressure lifts wages and living standards across a broad sector of the economy, while reducing inequality. But its not just about direct support for wages - they also want to repeal National's 90-day law, Hobbit law, and other employment law changes to allow workers to bargain once more. And they'll be supporting further moves to promote more collective agreements. Again, as the experience of the Clark government shows, this will be good for most New Zealanders, because better union bargaining outcomes are passed on (both as a direct anti-union tactic, but also by other employers if they want to compete for labour).

All of this is pretty much as expected, and entirely compatible with Labour's policies (and broadly with NZ First's). There are two interesting bits though:

  • statutory redundancy payments: this was recommended in 2008 by the Ministerial Advisory Group report on redundancy and restructuring. The right will already be squealing that this will increase unemployment, but the evidence from Europe is that it doesn't. Instead, it reduces unemployment in hard times, by making employers reluctant to sack workers.
  • Greater transparency over executive pay, and limits on it for government contractors. Again, this will have the right kicking and screaming - but transparency benefits shareholders, and the government is perfectly entitled to insist it gets value for money from its contracts, rather than seeing it support overpaid executives.

Overall, its a good policy. Hopefully they'll get a chance to implement it.