Continuing strikes and job losses may not be due to the economy

Salvatore Rigione joins staff from Farmers picketing outside Farmers' department store in Hastings on Thursday. PHOTO / DUNCAN BROWN

Hawke's Bay retail workers at Farmers and The Warehouse were this week respectively, striking and fearing for their jobs but while economists have previously noted that retail would be the first to predict an economic slowdown, Hawke's Bay Today's Andrew Ashton takes a closer look at the situation to see if there are other factors behind the discontent.

Last month Westpac chief economist Dominick Stephens said retailers were suggesting sales were "flattening off", adding that the New Zealand economy's relationship with consumer spending meant a slowdown in retail would slow the local and national economy.

Some in Hawke's Bay are now asking if the issues with the Farmers strike and reported proposals to cull jobs at The Warehouse were an indication that was beginning to happen.

However, recent figures from Paymark, which processes three-quarters of the nation's electronic transactions, showed the company processed $133.3 million of transactions in Hawke's Bay last month, a rise of 5.5 per cent on the same month last year. That was higher than the national average of 4.4 per cent.

With retail still on the rise in Hawke's Bay, workers' unions are pointing to issues beyond the economy as to why we are seeing strikes - and why we will probably see more.

E tu union assistant secretary John Ryall said there was "a lot of pent-up frustration" brought on by nine years of low wages an "endless restructuring".

"Especially in manufacturing but more so in retail, we see positions are disappearing at The Warehouse, so the bulk of people are on very low wages, and I think that strike action, if people are able to, will happen."

Ryall said workers in industries with similar issues - a large proportion of minimum wage employees, working for companies for which business was booming - were already bordering on strike action.

"The other thing that's happening as well, is the success of the Living Wage movement, in the fact that there is now a general acceptance by the public that people should get enough from their wages to live on, not to have an excessive lifestyle but to have the necessities in life.

"So, a lot of workers, like the dispute around the Farmers workers, is around the Living Wage."

Ryall said the prominence of the Living Wage movement, had now given workers and the general public a figure ($20.55 per hour) that reflected what people should be paid.

"A lot of councils for instance are already moving towards that. So, these strikes don't happen in a vacuum."

New Zealand Council of Trade Unions secretary Sam Huggard said: "One of the issues that affects retail and has come up in some of the economic confidence surveys that I've seen in recent months is that retail is one of the sectors that's a little bit more anxious than the others. We know retail is reliant on workers and families having resources to put into the shop, so actually lifting the wages of members of the community, making sure they have enough to live on will have a direct impact on retail. We'd much rather see money circulating in our retail shops up and down the country than being kept in high-level corporate profits or returning to overseas owners, so there's a real argument to support our retail sector that employs well over 250,000 people, by having better wages and living conditions for everyone and not just those at the top.

"If you look at most of the most reliable indicators the economy is in very good touch. The economy is in very good heat but what we're seeing at the moment from some aspects, not all, but some aspects of the business community, is trying to reference some law changes that are coming down the pipeline as being the reason for huge levels of business uncertainty.

"Actually, if you unpack that a little bit further, what those law changes are about, is on one level making sure we have fair rates of pay across whole industries. So, we support the very best employers who are doing right by their workers and make sure there's not a race to the bottom on wages from some of the others on the margins."

Huggard pointed to the bus transport industry as a prime example of that disparity amongst employers.

"There's some excellent employers who have very productive relationships with their employees but because there's a few others on the margins trying to drag down the rates as a result of the contract system, wages are coming down.

"We do need to make sure that workers are getting a better share of their income because there is a problem in New Zealand around low wages and there's various ways we can fix that - minimum wages increases are helpful, Fair Pay Agreements, when they come on-board in a couple of years will be useful too - but we also want to make sure we are supporting good employers who are already paying a decent rate not being undercut."

Huggard said while there had been a bot of "noise" from some employers' associations that paying workers properly, by making sure that women were paid properly, in terms of pay equity and fixing up the Holidays Act were detrimental to costs, in fact those initiatives were all quite sensible.

"But because a few of them are happening at the same time, it has really been used as a bit of an opportunity for some, not all, but some in the business sector to say this is what's leading to a lack of business confidence, and I just don't think, if you look through the economic data, it's just not real."

That was why CTU was keen to work with employers about progressing an agenda that would ensure firms could be successful and generate good returns, while still paying workers properly.

"Once you get past some of the hollering from the Manufacturers Association, there's plenty of goof firms around the country that are doing good work and just getting on with business."