So what has this meant for workers in terms of their material position?
Well, in 2003 a Canadian research report found that a drop of 6.5 percent in real hourly earnings occurred between the years 1980 to 2001, the worst of the sixteen OECD countries studied (in the same study Australian workers were up by 69.4 percent(Osberg and Sharpe, 2003: 22, cited in: Wilson, 2004: 178).
This is in spite of high levels of GDP growth, averaging 3.5 percent (well in excess of the OECD average) over the entire post labour market liberalisation period (1991-2004) (NZIER, 2006: 3, Statistics New Zealand, 1997, Statistics New Zealand, 2005: 76, and OECD, 2006).
So where has all the benefits of New Zealand's robust economic growth over the last 20 years gone if not to workers? The answer of course is that it has gone to capital. The is indicated by the fact that labour income share (percentage of GDP paid out in wages) from 53 percent in 1991 to be 49 percent in 2003 (Parham and Roberts 2005: 5).
Thursday, July 26, 2007
Sunday, July 22, 2007
Why New Zealand needs its Unions back #2
Ok, so this section follows on from my last post ..
During the 1990s, an extensive shift occurred in both structure and content, in the determination of employment conditions for most of the workforce (Harbridge et al., 2000: 74). The Awards system disappeared, along with the controls on the use of non-standard employment such as casual and part-time work, resulting in a rapid increase in part-time employment (see Appendix 2) (Anderson, 1999). In the absence of Awards, the primary protection against exploitation that existed for most workers was the bare statutory minimum standards (ibid). With the predominance of enterprise bargaining under a purely contractual regime, the balance of power had tipped. decisively in the direction of the employer. This allowed employers greater flexibility in organising the supply of labour to their enterprises and in managing the labour process within them (ibid). Decisions regarding recruitment, redundancy, dismissals and the allocation of labour effectively became the domain of managerial prerogative (Deeks et al., 1994).
The ECA did not require employers to negotiate with an employee’s designated representative. This allowed employers to take unilateral control to determine who would bargain for their workers … because the law permitted it and the environment did not constrain them (Report of the Minority. 1993 cited in Danin 1997: 177). Indeed, a Labour Select Committee Minority Report found that no real negotiation was occurring, and that in most cases employers insisted and workers gave in out of fear of not being accepted for employment (Report of the Minority, 1993 cited in Danin, 1997:176).
During the 1990s, an extensive shift occurred in both structure and content, in the determination of employment conditions for most of the workforce (Harbridge et al., 2000: 74). The Awards system disappeared, along with the controls on the use of non-standard employment such as casual and part-time work, resulting in a rapid increase in part-time employment (see Appendix 2) (Anderson, 1999). In the absence of Awards, the primary protection against exploitation that existed for most workers was the bare statutory minimum standards (ibid). With the predominance of enterprise bargaining under a purely contractual regime, the balance of power had tipped. decisively in the direction of the employer. This allowed employers greater flexibility in organising the supply of labour to their enterprises and in managing the labour process within them (ibid). Decisions regarding recruitment, redundancy, dismissals and the allocation of labour effectively became the domain of managerial prerogative (Deeks et al., 1994).
The ECA did not require employers to negotiate with an employee’s designated representative. This allowed employers to take unilateral control to determine who would bargain for their workers … because the law permitted it and the environment did not constrain them (Report of the Minority. 1993 cited in Danin 1997: 177). Indeed, a Labour Select Committee Minority Report found that no real negotiation was occurring, and that in most cases employers insisted and workers gave in out of fear of not being accepted for employment (Report of the Minority, 1993 cited in Danin, 1997:176).
Why New Zealand needs its unions back
Some may not remember but 1991 was a disastrous year for workers in in New Zealand, for it was in this year that the newly elected National party instituted the 'Employment Contracts Act' (ECA). The ECA was purposefully designed to limit the involvement of unions, by literally destroying the union movement, and it did this with great success as it was only three years after the introduction of the ECA when the union movement was all but an irrelevancy in New Zealand's labour market. For workers, the destruction of the union movement has meant two decades of pathetically low wage growth. This is demonstrated by the figure below, which shows a drastic reduction in wage growth relative to economic growth in the years following the introduction of the ECA.
For example, during the 6-year period prior to 1992, wage growth held consistently above GDP growth, whereas, during almost the entire ECA decade, annual GDP growth was higher than wage growth. This fall in wage growth relative to economic growth during the decade of the ECA seems to have resulted from the stultifying effect that the ECA had the industrial strength of unions, which was reflected in declining rates of industrial action.
For example, during the 6-year period prior to 1992, wage growth held consistently above GDP growth, whereas, during almost the entire ECA decade, annual GDP growth was higher than wage growth. This fall in wage growth relative to economic growth during the decade of the ECA seems to have resulted from the stultifying effect that the ECA had the industrial strength of unions, which was reflected in declining rates of industrial action.
Sunday, July 8, 2007
Peak Oil Revisited
Ok, I've just re-read my last post on peak oil and decided that, for the benefit of people who haven't read a lot a bout peak oil I should provide a more detailed rescripition of peak oil. The explanation below comes from a fantaistic energy-focused website called "energy-bulletin". For a full explanatoin of peak oil I recomend visiting the page linked to below.
What is Peak Oil?
Peak Oil is the simplest label for the problem of energy resource depletion, or more specifically, the peak in global oil production. Oil is a finite, non-renewable resource, one that has powered phenomenal economic and population growth over the last century and a half. The rate of oil 'production,' meaning extraction and refining (currently about 84 million barrels/day), has grown in most years over the last century, but once we go through the halfway point of all reserves, production becomes ever more likely to decline, hence 'peak'. Peak Oil means not 'running out of oil', but 'running out of cheap oil'. For societies leveraged on ever increasing amounts of cheap oil, the consequences may be dire. Without significant successful cultural reform, economic and social decline seems inevitable.
What is Peak Oil?
Peak Oil is the simplest label for the problem of energy resource depletion, or more specifically, the peak in global oil production. Oil is a finite, non-renewable resource, one that has powered phenomenal economic and population growth over the last century and a half. The rate of oil 'production,' meaning extraction and refining (currently about 84 million barrels/day), has grown in most years over the last century, but once we go through the halfway point of all reserves, production becomes ever more likely to decline, hence 'peak'. Peak Oil means not 'running out of oil', but 'running out of cheap oil'. For societies leveraged on ever increasing amounts of cheap oil, the consequences may be dire. Without significant successful cultural reform, economic and social decline seems inevitable.
Of the 65 largest oil producing countries in the world, up to 54 have past their peak of production and are now in decline, including the USA (in 1970/71) and the North Sea (in 2001). Hubbert's methods, and variations on them, have been used to make various projections about the global oil peak, with results ranging from 'already peaked', to the very optimistic 2035.
Combined oil and gas, are expected to also peak around 2010. Other researchers such as Kenneth Deffeyes and A. M. Samsam Bakhtiari have produced models with similar or even earlier projected dates for oil peak. Other quite different types of analysis have provided supporting evidence to these 'early peak' scenarios, most notably UK Petroleum Review editor Chris Skrebowski's Oilfields Megaproject reports, and energy banker Matthew Simmons' analysis of Saudi Arabian oil fields.
But it's just oil - there are other fossil fuels, other energy sources, right?
To evaluate other energy sources it helps to understand the concepts of Net Energy, or the Energy Returned on Energy Invested ratio (ERoEI). One of the reasons our economies have grown so abundant so quickly over the last few generations is precisely because oil has had an unprecedently high ERoEI ratio. In the early days of oil, for every barrel of oil used for exploration and drilling, up to 100 barrels of oil were found. More recently, as oil recovery becomes more difficult, the ratio has become significantly lower. Certain alternative energy 'sources' may actually have ERoEI ratios of less than one, such most methods of industrially producing biodiesel and ethanol. That is, when all factors are considered, you probably need to invest more energy into the process than you get back. Hydrogen, touted by many as a seamless solution, is actually an energy carrier, but not an energy source. Hydrogen must be produced using an energy source such as natural gas or nuclear power. Because of energy losses in transformation, the hydrogen will always contain less energy than was invested in it.
To evaluate other energy sources it helps to understand the concepts of Net Energy, or the Energy Returned on Energy Invested ratio (ERoEI). One of the reasons our economies have grown so abundant so quickly over the last few generations is precisely because oil has had an unprecedently high ERoEI ratio. In the early days of oil, for every barrel of oil used for exploration and drilling, up to 100 barrels of oil were found. More recently, as oil recovery becomes more difficult, the ratio has become significantly lower. Certain alternative energy 'sources' may actually have ERoEI ratios of less than one, such most methods of industrially producing biodiesel and ethanol. That is, when all factors are considered, you probably need to invest more energy into the process than you get back. Hydrogen, touted by many as a seamless solution, is actually an energy carrier, but not an energy source. Hydrogen must be produced using an energy source such as natural gas or nuclear power. Because of energy losses in transformation, the hydrogen will always contain less energy than was invested in it.
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