SkyCity workers are going on strike asking for a cost-of-living increase, and many other workers are struggling to get a fair-wage boost from their employers. Photo / Tom Dillane
SkyCity workers are going on strike asking for a cost-of-living increase, and many other workers are struggling to get a fair-wage boost from their employers. Photo / Tom Dillane
Opinion
OPINION:
Last year, Magnus Groth made 23.5m Swedish Krona, that's about $3.6 million in Kiwi money.
Good for Groth, I hear you say - why should we care? Well, Groth is the president and chief executive of Essity, owners of the Kawerau mill where workers have been locked out forthree weeks with no pay.
While the 145 Kawerau workers have been asking only for a pay raise to match inflation, Groth has been telling investors that wage rises are putting too much pressure on production costs.
The need for austerity only seems to apply to the people working the mills, though - his pay packet appears to be safe.
Essity is even stopping the workers accessing their retirement savings to pay the bills. In my opinion, the company is doing its utmost to starve out the workers.
I was born and raised in Kawerau and it isn't a wealthy town, but it is a proud town of hard workers. What little our whānau have, they have earned through tough physical toil in the mills for generations.
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Essity posted a billion-dollar profit last year. In my opinion, Essity is now turning around and implying the workers who helped created that wealth are greedy – and that's a disgrace.
Magnus Groth is the president and chief executive of Essity, owners of the Kawerau mill where workers have been locked out for three weeks with no pay.
Essity is just one example. SkyCity workers are going on strike asking for a cost-of-living increase, and many other workers are struggling to get a fair-wage boost from their employers.
Why is it that CEO pay and company profits are expected to go up year after year, but workers getting a wage top up to match the cost of living is called "wage inflation"?
The idea that workers' wages need to be held down, to go backwards in real terms, while inflation rises is deeply entrenched in our national conversation on the economy.
The opposition and bank economists are sternly telling us that we must reduce "cost pressures" on business and that workers getting a cost-of-living increase risks causing a "wage spiral". Funny, I don't hear the same concerns about company profits.
The scary thing is that, when National says the economy is "overheated" and that the Reserve Bank needs to "drop its full employment mandate", what they are actually saying is we need more unemployment so that workers won't have the bargaining power to demand wage increases.
And when the Reserve Bank says the country is above "maximum sustainable employment", they're agreeing that more Kiwis should be out of work and wage increases should be lower. That's why it is raising interest rates - to make whānau spend less and get businesses to cut back on growth plans, leading to fewer jobs and lower pay.
Essity posted a billion-dollar profit last year. Photo / Mead Norton
In other words, they think the cost of inflation should be put squarely on the shoulders of working people.
Lower real wages means workers spending less, forcing businesses to cut back and ultimately cut jobs, which can easily spiral into a recession. If there is a recession, you know it won't be those of us with good office jobs who bear the brunt. Once again, it'll be the blue-collar workers.
The truth is, workers didn't cause this cost-of-living crisis, and paying them fairly won't make it worse. What will make things worse is if workers get poorer.
I'm no fancy economist, but it seems mad to me that our reaction to a cost-of-living crisis is to make things worse for working people. Inflation has been driven by international oil prices, the shipping shortage, and the war in Ukraine increasing food costs. Why is the solution that ordinary Kiwis, like the workers at Essity's mill, have to pay the price?
Why don't we, instead, look at the windfall profits being made by oil companies and banks as they suck billions a year out of our economy?
And, while we're at it, let's get fair pay agreements going as quickly as possible to strengthen workers' hand at the bargaining table.
I stand in solidarity with the Essity workers and everyone asking for a cost-of-living increase. It's not too much to ask.
• Shane Te Pou (Ngai Tuhoe) is a commentator, blogger and former Labour party activist.
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