Concerned about confusion and misinformation surrounding Multi-Employer Collective Agreements, or MECAs, Paul Watson explains why he believes they are good for the economy, workers and employers.
MECAS, collective agreements that include more than one company, have been made out to be ill-wishing boa constrictors on good businesses that restrain an employer's ability to be nimble and competitive. This couldn't be further from the truth. Yet we have some groups lobbying for old, timid business models that push to make money through cutting wages, over providing a quality product or service. These groups also claim this approach is the right thing to do for all workers.
But if employers are doing what's right then why do we have up to 180,000 adult working people being paid the minimum wage of $16.50 an hour in this country when minimum is supposed to be a starting rate? If the minimum wage is acceptable then why do we have a panel of experts who've calculated and are pushing for, a Living Wage of $20.55, a wage that allows people to live? Why is it, if employers are doing the right thing, that there is far more precarious, casualised, and less secure, less permeant jobs available for Kiwi workers than at any other time in our recent history?
I'd suggest it's been due to a systemic bias towards old, worn-out, less ethical business models in policy-making over the last 10 years, largely due to some aggressive and sometimes misleading tactics undertaken by business lobby groups. Groups that have been touting doomsday for the New Zealand economy if workers are paid fairly. We have seen a dismantling of the industry bargaining award system in favour of enterprise and individual employment agreements.
Law changes in the early 1990s significantly shifted the balance of bargaining power against working people and just about saw the complete demise of multi-employer industry agreements. It also included a failure to move the minimum wage more than once over that decade. Despite claims otherwise, we are living in a low wage economy and compared to most other OECD countries, New Zealand's labour income share is low due to a series of historic and recent changes.
Despite this, new figures out from Statistics New Zealand show spending power has pumped up Gross Domestic Product (GDP) and will continue to do so as long as hard-working New Zealanders are paid their worth - and we are noticing that companies are more open to this.
It has shown business confidence surveys to be nothing more than emotional fluff, an ideological, knee-jerk reaction to a new government in power. Doomsday has not occurred. In fact, the economy is beginning to thrive once more because when people have money to spend, communities come to life and businesses with good products reap the rewards. The economy becomes flush with cash, cash that is of greater benefit to the wider economy.
But many issues remain. There are companies which seek to drive wages down to undercut competitors in the same industry, competitors that are more progressive and want to pay employees a fair wage. It's then easy to see how strong the case is for better-paying employers to champion MECAs to call to account the low payers and begin to neutralise the competition on wages. It must be difficult though, with business lobby groups telling progressive businesses what's good for them without considering alternative business models. MECAs solve this. MECAs literally and effectively take the competition out of wages. Employers in these agreements enjoy consistent terms and conditions that apply fairly and evenly across employees working in that industry, and thus boosts the self-efficacy of businesses to choose what to pay employees.
The employers who like to risk their workers' wellbeing for the sake of a profit should be ashamed. If the NBR rich list is anything to go by, it's not like the money's not there. Some of the worst-paid workers in our country are supermarket workers, yet some of the highest-paid owners are supermarket owners.
We see similar parallels in retail. People are also scraping by with insufficient hours. How did we get here? These inequalities have real-life ramifications for people, not only on finances but their physical and mental wellbeing too. A supermarket MECA would require owners do the right thing by workers and by progressive businesses.
A MECA gives businesses more stability, and forecasting will become easier when considering payroll. Bargaining related compliance and advocacy costs will be significantly reduced with collective agreements. Pay equity issues will not arise. These sophisticated, agile documents do allow for regional flexibilities (contrary to what some government MPs have stated) while maintaining the essence of individual brands. MECAs also free-up business to consider distribution, research and design, and encourage competition on production, among a raft of other pursuits that would ensure New Zealand has a globally renowned business sector once again. Lastly, MECAs are an excellent place to discuss industry standards like training development, skill-based pay systems and the changing nature of work.
The Employment Relations Amendment Bill, that includes a strengthening of MECA agreements, looks likely to convert into law soon. This will help move New Zealand up in some rather embarrassing OECD rankings, to a place we can be truly proud of.
Paul Watson is the First Union Southern Region Secretary.
