Employers have long bemoaned the historically high employment rate, which has removed the whip of redundancy from workers’ backs. For workers, a tight labour market, is one where it is hard to find a job. But for employers a tight labour market is one where they can't lay off workers as freely as they like for fear of not being able to replace them.
For the last few years, employers have harked back to the days of Rogernomics where thousands of jobs could be slashed at a single blow. The Rogernomics policies saw large sections of the economy privatized and downsized, with huge resulting rises in productivity, due to getting fewer workers to do more. On average the productivity rate of workers in NZ has grown by about 1% per year since 1945, except during the Rogernomics period 1985-90, which saw rises in productivity of annually 2.9%.
The Rogernomics era was followed by the Ruthanomics period, where these attacks on working people were legislatively cemented in place though the notorious benefit cuts and the Employment Contracts Act. These laws made it very hard for working people to fight back to recover their losses under even a growing economy. This allowed record profits to be made by the rich, while workers and beneficiaries real incomes declined.
In fact, even under the present so called "Tight Labour Market" productivity per worker has still been growing at 1.1%. But this is not enough for employers. This is because they’re in competition with other employers in oppressive regimes like China and Thailand, who are paying their workers even less to do more.
In his famous works 'Wage Labour and Capital', and 'Value Price and Profit', the 19th century economist, philosopher and activist Karl Marx dissected the economics behind the competitive drive for increased labour productivity. Marx, instead of using the employers term "increasing labour productivity", instead called this phenomenon what it really is "increasing the rate of exploitation. "
Marx said that if workers (or their organisations) join in this race to increase productivity they are joining what would later come to be called the race to the bottom. In Marx's own words "every worker is competing against every other worker, and in the end competing against himself as a member of the working class."
Marx recognised that the rate of exploitation (productivity) per worker can be increased by two main ways, by increasing the use of automation and technology, and secondly and more bluntly by lengthening the working day or getting workers to work harder and faster for less money.
Marx wasn't a Luddite. He wasn't against the use of technology, but suggested that increasing automation should be used to increase workers leisure time and wages instead of creating, as it does now; greater profits and unemployment. He also recognised that this would require a determined struggle between labour and capital.
Overall the productivity of NZ workers has increased over 60% since the end of the Second World War, due to automation, computerisation etc. In that same time relative incomes for workers have stayed stable or even declined. It’s mainly the massive growth in employers’ profits which has benefited from this huge increase in productivity.
These huge increases in productivity haven't increased workers welfare. Only seizing more of this increased production off the bosses can do that.
This has been achieved through fighting for higher wages through the unions, or imposing higher taxes on the rich which was the policy of the first Labour Government.
In fact nowadays most of the tax burden falls on working people, and is rightly seen as an imposition, originally it was only the rich who were taxed. Income tax for workers was only brought in, in this country in 1958.
In EPMU News, 20 March, (see below) Peter Conway, the CTU’s economist, was quoted as saying that unions and workers should be looking to boost productivity in partnership with employers. But as Marx pointed out this is to embrace the bosses’ logic and be caught in a competitive race to the bottom for workers.
So what’s the alternative to Peter Conway’s plan for unions to get behind the employers drive for greater productivity, in the hope of being gifted a few more crumbs from the rich man's table?
Here are my suggestions:
1) Practically, workers and their organisations should be fighting for the removal of limits to the right to strike which was the base of the Employment Contracts Act and the current Employment Relations Act.
2) We should be actively opposing and not quietly supporting the Free Trade Deal with China.
3) We should be organising mass events to put pressure on the government to heed to the CTU's call for $15 minimum wage in '08.
4) We should be calling for the cancellation of the tax cuts. Because this is being tied to the employers call to cut government spending which is part of the social wage. If there are to be any tax cuts they should be only for working people and beneficiaries.
5) Productivity agreements and partnership deals with the employers, which have been shown to be so disastrous for the workers at Air New Zealand and Fisher and Paykel, should be replaced with resolutions to protect the independent interests of workers.
6) Current plans by employers to bring in indentured low wage work teams from China under the free trade deal, be countered by union resolutions that these workers be paid no less than unionised workers doing the same work. In this way we can undermine employers plans to get workers to compete against each other.
And so undermine the competitive model, which underpins the race to the bottom. And replace it with a model of international workers solidarity.
Overall, the collaborative model of unionism being promoted by Peter Conway needs to be dumped and replaced by a more combative and unashamebly pro-worker model, independent of employers profit driven interests.
More can be done to lift labour productivity
From EPMU News, March 20, 2008
Productivity statistics released this week show that lifting labour productivity in periods of relatively low unemployment remains a challenge.
The figures show that labour productivity rose by 1.1% on average each year in the 2000 to 2007 period.
This compares with 2.9% in the 1985-90 period, when labour inputs fell and there were large scale redundancies and rising unemployment.
CTU economist Peter Conway says that while 1.1% is not a bad result, if we can lift the level of capital investment, focus on up skilling the workforce, and foster best practice at a workplace level, then labour productivity can rise.
“The CTU has been working with Business NZ and the Government to raise awareness about the importance of productivity, develop appropriate tools for productivity improvements and support pilot projects.
“Lifting the skill levels of the workforce, including new entrants, applying the best technology, and building decent workplaces is where the focus needs to be. This includes the need for improved levels of literacy and numeracy.”
Peter Conway says unions recognise that creating a high wage economy will require not only good collective bargaining arrangements, but sustainable increases in productivity.