National Prepares to Make War on the Poor

In the previous post, I looked at what the practical legal implications of the "Probationary Employment Bill" would be, should National come to power. In this post, I look at the likely victims of this legislation, and just as I had suspected, it's NZ's poorest and most vulnerable.

According to the 2007 Labour market report (pg 56) 466,000 people are employed in the Retail Industry, and the Hospitality Industry combined. This amounts to 23% of all people employed. Now, the vast majority of these workplaces employ less than 20 people. For instance, in 1990 the Service Workers Union (cleaners etc) covered 12,000 work sites, with an average of only 7.5 workers each - and there's no reason to believe this would have changed much since then. Also, in 1990 the Northern Distribution Union (primarily active in the retail industry), represented 7211 workplaces that employed 5 staff or less and only 166 workplaces employing 16 staff or more.

So it seems likely that most of the people working in these industries would be subject to National's proposed legislation. These are the people who had their wages hit hardest by National's Employment Contracts Act in the 1990s. In fact the average hourly wage rate in these industries went from being 75% of the national average in 1991, to just 65% in 2005.

Also, as can be seen in the graph below, wages in these industries fell in real terms, during the decade of the 1990s, and in the case of the hospitality industry, never recovered, whilst wage growth in the retail industry has recovered marginally since 2002.




Sources: 2005 and 2007 Labour Market Reports, pages 78 and 124 respectfully.

To adjust for inflation the RBNZ CPI calculator was used.

Workers in these industries are also primarily employed on a part-time basis (around 60% of them work less than 30 hours per week). So these workers have the lowest weekly incomes of all New Zealand's workers (see part 6 of the 2005 labour market report). They are the poorest and most vulnerable workers in NZ, and National wants to take all their employment rights away, so they can be more easily exploited by business owners.

New Zealand already has one of the highest levels of income inequality in the developed world (see page 59 of the social report), and National proposes to make this situation worse by eroding the wages and working conditions of the poor even more. Without any enforceable employment rights, unpaid/underpaid work and general denial of statutory employment rights would become common place in these industries, where labour costs are estimated to be around 70% of non-stock spending costs - Pringle (1996: 94) New worlds and fresh choices? : continuities and discontinuities in industrial relations practices in New Zealand’s retail grocery supermarkets.

But what else did we expect from the National Party?