8 Aug 2016

Employers refuse to give pay rises because they 'can't afford them'

7:35 am on 8 August 2016

Employers are rejecting calls for higher wages, saying they can't afford to pay them.

But unions argue higher wages will not just be good for low paid workers but will also help boost struggling regions and the economy.

Money in pocket

Wage increases slowed to 1.5 percent in the year to June, and have now been below 2 percent for the last four years. Photo: 123RF

Pak'n Save workers in Christchurch have been on the picket line, agitating for a $2 an hour pay rise that would bring them in line with their North Island counterparts.

FIRST union national organiser Bill Bradford said strike action was a big step for workers on low wages who were struggling to make ends meet.

"They would never in the past have even considered doing those things.

"It's a measure of the desperation of people who are faced with this never-ending grind of having to work very hard, or seeing prices going up all around them, of struggling to pay the food bill, and yet their pay barely moves," Mr Bradford said.

Wage increases slowed to 1.5 percent in the year to June, and have now been below 2 percent for the last four years.

FIRST Union general secretary Robert Reid said it shouldn't be that way, particularly for the lower paid.

He said meaningful pay rises benefit not just workers, but businesses too.

He points to the extra $1.25 an hour Pak'n Save workers received in Whakatane last year.

"That was an extra quarter of a million dollars going into the Whakatane economy, now that was good for our members, that has to be good for Whakatane," Mr Reid said.

"If it was anyone else saying that they were going to give another quarter of a million dollars to the lowest paid in Whakatane so that they could spend more and get the local economy going, they'd probably get an MBE or an OBE."

That doesn't hold much water with employers.

EMA chief executive Kim Campbell.

EMA chief executive Kim Campbell. Photo: RNZ / Todd Niall

Northern Employers and Manufacturers Association chief executive Kim Campbell said firms were also being squeezed, and could not put up their prices.

Mr Campbell said workers understood that, and industrial relations were mostly harmonious.

"The fact that we don't have such a strong union movement anymore is, I think, reflective of the fact that most of the unions have got what they were actually looking for.

"We've got very good paid holidays here in New Zealand, we've got working conditions which by law need to be safe, and there's a long list of benefits that accrue to employees that in many jurisdictions just aren't there," Mr Campbell said.

Certainly, strike action has waned over the last decade.

Stoppages in 2014, the last year available, totalled 13 involving 1564 employees.

That compares with 60 stoppages and 17,752 workers in 2005.

In that time bargaining power has tilted in favour of employers.

But it doesn't mean grievances have gone away.

Strike action by workers in airport security, Auckland hospital, catering and call centres has been averted by employers upping their offers.

Those caring for elderly people are the next test.

The industry co-ordinator for the community sector for E tū, Alastair Duncan said care and support workers, who are mainly middle-aged women, were fed up with excuses year after year about why they couldn't be paid more.

"The work force is now saying enough is enough," Mr Duncan said.

"A combination of terrible government funding, of perceived profits by listed employer companies, and the fact that when you're caring for elderly people the job gets harder every day simply because the resident is getting a bit slower every day."

Council of Trade Unions president Richard Wagstaff said after years of flat wages, patience had worn thin among workers, and more were now prepared to flex their muscle.

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