Will dinosaurs roam again?

When I started out on my career, I was never a great fan of unions.

When I started out on my career, I was never a great fan of unions.

I grew up in strife-torn Seventies Britain and saw the economic damage they had caused to my old country.

It culminated in the 1979 "Winter of Discontent" strike-fest when Britain was practically ungovernable. There were power cuts, rubbish piled high in the streets and the dead remained unburied.

The "Union Barons" needed "sorting out", and they were. Even the miners could not defeat Margaret Thatcher.

By the 1990s, it was a different story. Employers could and did "de-recognise" unions, collective agreements were over, and it was a "take it or leave it" regime of individual contracts and count-yourself-lucky-to-have-a-job attitudes.

New Zealand's story is pretty much the same. I've heard all the tales about how Christmas wouldn't be Christmas without the airline pilots and inter-island ferry staff going on strike.

Thus, New Zealand introduced the Employment Contracts Act, just as Britain had had its own various employment acts.

ECA supporters like economist Gareth Morgan, who writes about the ECA in this month's Unlimited, points out how the low-paid were apparently "overpaid" in pre-ECA times. He also says that where union membership declined the most, so did members' wages relative to everybody else.

Thus, in a roundabout way - and Morgan does not say it - his evidence shows that for workers, unions work. Where they operate, they bring higher wages to their members. No wonder employers do not want them.

Many people would agree that over the past 15 years or so, living standards have barely changed. Wages have been kept down and economic growth has been pretty sluggish.

We're told wage growth has been slow because economic growth has been slow. But could it be the other way round?

After all, workers are not just workers, but consumers as well. If industry pays its workers badly, they are then unable to afford to buy the products their employers make. Therefore, people have to buy second-hand Japanese imports instead of new Toyotas made at Thames and cheap Chinese knickers, instead of those made at Te Aroha or Hamilton. No wonder the Kiwi trade deficit is horrendous.

If I was paid more than I currently am, I would like to buy a place of my own. If I did so, I would be creating commission for the real estate rep, work for the builder, work for the timber company who supplied the frame and the furniture, and work and profit for whoever else was involved.

But I am not (paid more or buying), and therefore they miss out - and through "the multiplier effect" (yes, I am a degree-level economist) so does my current employer, IDG.

The real estate firm, builder, brickie, etc, would in turn buy things off people, who in turn would buy computers and maybe subscriptions to this magazine. Let's face it, if times are hard, the thing you cut back first is discretionary spending like books, newspapers and magazines.

Thus, by not paying decent wages to its workers, industry is, eventually, slitting its own throat.

And never mind poor wages exacerbating the brain drain, as my colleague Paul Brislen excellently argued last week.

There are also issues of motivation. "You pretend to pay us and we'll pretend to work," as they used to say in Soviet Russia.

A few days ago, I spoke to Andrew Little, National Secretary of the Engineering, Printing and Manufacturing Union, which covers the IT industry. I was hoping for a blood-curdling story about "dinosaurs" about to rampage through the IT sector and how it was "payback time".

Maybe it was an act, but he seemed the voice of moderation. Yes, the EPMU would campaign to attract members, but there was nothing specific aimed at IT. Apparently, it is up to the workers to want to be represented and the union will do its best to represent them, but only if they want it to. The unions were not going to "get the jackboots on and stamp around," he says. "Our job is about giving employees the choice."

He stressed the line about "good faith" in the workplace and how unions were not same beast as they were. Voluntary membership means they can only survive by truly representing their members, not by doing what some union official wants. Thus, it seems, we are not going back to the pre-ECA days, when the worker unions "held the country to ransom". And gone are the ECA days when the "Bosses' Unions" - the Business Roundtable, Employers Federation, etc, did likewise.

Hopefully, there will now be some kind of happy medium, with one side realising the business has to make a profit to survive, and the other realising workers have to be treated well to do their best, which is actually in the long-term interests of the enterprise.

I have worked for some bad employers who treated staff like slaves, maintained sweatshop conditions and from where the poorly paid people left as soon as they could. One Kiwi who did this was not a success and his "empire" is but a shadow of its former self, with one failed business and another badly shrunken.

These employers often talk with great fear about unions and claim they bring industrial anarchy. But if you treat your workers well, what have you to fear?

In my experience, the old ECA simply kept the industrial pressures, worker dissatisfactions and other problems under a lid, with a cowed workforce too terrified to do anything but find another employer. The new Employment Relations Act simply gives employees the tool to address issues in the workplace, issues that no doubt existed before.

Thus, if you are an employer with industrial trouble, you only have yourself to blame.

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