Labour’s divide and rule pay freeze

by Don Franks

Last week, on the anniversary of Karl Marx’s birthday, Public Service Minister Chris Hipkins had good and bad news for workers. His good news – twenty-five per cent of public servants can expect pay rises. His bad news – for the next three years, public servants earning more than $60,000 will only get rises under special circumstances.Those on over $100,000 will get nothing. As housing and other living costs keep rising, Hipkins’ pay freeze is effectively a pay cut.

Public Service Minister Chris Hipkins

Retired unionist Ian Powell commented: “The Government probably thought that it could divide-and-rule with the gesture of focussing on lower paid employees although most appear to have seen through this ruse. There would have also been hopes that the influence of the compliant Council of Trade Unions President Richard Wagstaff would help. A promptly published opinion piece from him so soon after the announcement suggests collusion. Wagstaff whitewashed the implications of the Government’s decision, refusing to acknowledge that it was a pay freeze (https://businessdesk.co.nz/article/opinion/public-sector-bargaining-must-be-in-good-faith).The state sector unions saw through this and their response was strong. Reportedly some were furious with Wagstaff’s response, including an email to affected affiliates arguing that the Government’s decision wasn’t a pay freeze. This meant that Wagstaff found it necessary to make a u-turn with a subsequent statement more expressly critical of the Government.”

The CTU leader’s u-turn took the form of a request to meet government leaders over the issue, dressed up by the Herald as: ” an enormous amount of backlash over its decision to freeze public sector wages… unions are demanding ministers come to the negotiation table and act in ‘good faith’.”  “Don’t expect us to take this lying down,” CTU President Richard Wagstaff told the Herald. Finance Minister Grant Robertson is obviously hoping for exactly that, cheekily defending the Government’s pay cut as a move to reduce inequality. 

On form, the smart money would be on Grant Robertson getting his way without much trouble. The CTU national office has functioned as little more than a Labour Party cheer leader since the government was elected. As a typical example, its press statement on May 7th:  “The Council of Trade Unions says the future for working New Zealanders looks much brighter thanks to today’s announcement that Fair Pay Agreements are much closer to becoming a reality. The announcement was made by the Minister of Workplace Relations and Safety Hon. Michael Wood.“

“Fair Pay Agreements will provide a framework for fairness, they will allow for an industry-wide set of minimum standards for employment terms and conditions. These standards will include minimum pay rates, penal rates, and other conditions. Any sector or industry which has a Fair Pay Agreement will now have a better base of employment conditions, and all employees will now require employment agreements that recognise these standards as a minimum. We expect employers and employees to negotiate terms and conditions that better what is included in a Fair Pay Agreement if possible,” CTU President Richard Wagstaff said.

Away from this fantasy of bosses and workers set to play happy families, the real world is not so kind. New Zealand workers, even those on $100,000 a year, are increasingly unable to afford a decent home. In the country’s largest city, Auckland,  housing prices climbed 90% from 2008 to 2018. About 1% of New Zealanders are homeless and our homelessness rate is the highest among the 35 high-income countries in the OECD. Homelessness has increased since Jacinda Ardern became prime minister. 

It’s to be hoped that there actually is an enormous amount of backlash over Hipkins’ pay freeze. That’s what it will require to alter the government’s mind. A polite deputation of union officials to the minister’s office is not a backlash. A backlash means angry people filling the streets. If unions aren’t going to genuinely organise against the relentless downward drift into poverty, workers will somehow have to set their own agenda. 

One comment

  1. It now appears the government has backed down from their pay freeze ambush somewhat, allowing negotiation on cost of living increases. I’m pleased to be proved partly wrong on what some shift would take. Bodies in the streets were not required to effect the partial retreat, although pressure on union officials from below was obviously strong enough to modify their usual tune.
    In 2018 Listener interview Public Service Association national secretary Erin Polaczuk said on the subject of strike action: ” I don’t think we’ll ever go back to the way things were. Maybe we are in the mature era and the feminisation of the union movement has changed things. We are not guys coming in and having a punch up any more.”
    In her latest message to members on the PSA site she was moved to say:
    “We’re talking to the Prime Minister tomorrow and if the Government do not change their position, we will discuss with members what forms of action to take in response. Nothing is off the table.”

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