John Roughan: Striking state servants will be chilling business confidence

It is going to get worse in the next week or two if hospital strikes go ahead and schools are hit too. Photo / 123RF

With friends like nurses, teachers, public servants generally, the Government must be thinking, who needs enemies?

The Government is on a mission to raise incomes at the lower levels and rightly so. It proposes to do so not just with steeper annual increases in the statutory minimum wage but by strengthening trade unions. This is probably what is keeping business confidence low, and rightly so.

Nurses, bless them, are not low paid. They start at around the national average wage and while their basic scale does not go a lot higher, good ones shouldn't stay on the basic scale.

Public servants generally are not low paid. The public sector average is about a third higher than the private sector, plus they have more job security and fatter staffing. And those such as nurses and firefighters whose work comes free to their customers can always tap mindless public support for a wage rise. It's only when we have to pay for a service that we critically evaluate it.

There is a chill in the air and it is not just climatic. It is going to get worse in the next week or two if hospital strikes go ahead and schools are hit too. Business confidence has forgotten Grant Robertson's sound Budget last month and watched with dismay the turn of events in June.

Trade unions practically disappeared from the private sector after individual bargaining was permitted by the Employment Contracts Act 1991. Where it survived in large companies, collective bargaining was confined to a firm, it could not bind competing firms to the same rates of pay and conditions. That is what the present Government proposes to change with "fair pay agreements" across entire industries in the private sector.

The Employers and Manufacturers Association is trying to campaign against this and it could not have wished for better than a public demonstration of union power at this moment. Any employers who have forgotten, or are too young to remember, life before 1991 are getting a sharp reminder.

The union movement, meanwhile, must be buoyed, not just by public support for the nurses but by the sympathetic reception for a couple of issues the unions ran in the private sector after the change of government.

The first was for mandatory tea breaks. Does anyone take tea breaks these days? In the public sector they still do, I hear, but out here in the economy we're too busy. There's barely time for lunch. Nevertheless, tea breaks got sympathetic coverage.

The unions' next publicity drive was against supermarkets who asked staff to attend meetings outside their paid hours. Imagine that? We heard staff were being asked to stay back 15 minutes after their shift to hear from their managers and discuss things.

That campaign really surprised me. Last time I heard about the "modern union movement" it was all for more communications within the workplace and helping employers make work more meaningful and satisfying for staff. Those unionists sounded less obsessed with the clock.

But that would have been a while ago now, probably in the years following the Employment Contracts Act when unions were rapidly losing members in the private sector and trying to make themselves relevant to a competitive economy open to international markets. Those modernisers are probably retired by now.

Pity. We need them as the political pendulum swings back in favour of the employed. Not before time, either. Average incomes are too low for an economy as strong as ours has become. Employment law needs to strengthen the hand of employees in bargaining somehow but not in a way that prevents companies competing with smarter, more productive working arrangements.

That is a fair summary of the terms of reference for the "working group" of unions, employers and other experts set up to suggest how fair pay agreements might work.

Could there be anything more 1970s than a "tripartite" exercise. Its even being chaired by an ageing Jim Bolger. Reporters like me lost days and nights of our lives sitting on a Beehive floor waiting for Bolger, Minister of Labour, to conclude a session with union and industry leaders deadlocked in a dispute that was tying up some part of the economy.

Jacinda Ardern, born 1980, believes employers have nothing to fear because their representatives will be "at the table" in fair pay agreements. But the people who take most of the risks in this economy, especially the heavy responsibilities of employing people, are too busy to belong to industry organisations let alone sit around tables.

The Government says strikes will not be permitted to enforce industry pacts but good luck with that. The Government should concentrate on doing what it can to lift productivity, the only way incomes rise sustainably. Anti-competitive deals are the road back to fools' paradise.