......But what if they add to inflationary pressure?
One of NZ’s leading economists Cameron Bagrie told the TV3 AM show on Tuesday the increase in wages in NZ is a “success” but we are getting to a point of too much success.
His warning came as the Dominion-Post reported what it called “an avalanche” of fair pay applications are expected to be made over the next few months as unions gather momentum to launch bids for better pay for workers under the new fair pay agreement law.
Fair pay agreements set out specific conditions and deals between workers and employers in an industry or occupation, with the regime for establishing them coming into effect next month.
They can be triggered by support from 1000 workers or 10% of a workforce. The fair pay legislation stemmed from a major plank in the Labour Party’s election policy.
So how will that “avalanche” fit with what the Reserve Bank is trying to do with its action to halt the momentum in inflationary pressure?.
Will it be another economic disaster to be chalked up by the Ardern government?
Here is what Bagrie told AM viewers:
“What we’ve got there at the moment is success. It’s a great story that wages are moving up, of course, but we are now into that zone where it’s too much success because it’s actually adding to inflation.”
It’s only a month since the Ardern government passed into law its flagship fair pay legislation.
Workplace Relations Minister Michael Wood called it an historic moment for New Zealand workers.
“The Fair Pay Agreements Bill will improve employment conditions, by enabling employers and employees to bargain collectively for industry or occupation-wide minimum employment terms,” he said.
“By increasing bargaining co-ordination to agree minimum employment terms within a sector, outcomes for vulnerable employees will be improved and we will see growth in the incomes of New Zealand employees.”
Similarly, the Greens said the passing of the legislation was a “landmark change” and a “huge step forward”.
But will the enthusiasm for the new legislation be as strong if, as Cameron Bagrie says, it adds to inflationary pressure just as the Reserve Bank raises interest rates again in its battle to control the inflation that is pushing up mortgage bills so fast?
As the Dominion-Post reported this week,many sectors are already prepared to get their applications for fair pay agreements through on December 1.
First Union’s Louisa Jones said bus driver and supermarket retail members wanted to initiate the process and put in applications as soon as possible.
“This is massive. Workers are excited to try and do it.”
They already had over 1000 signatures for supermarket workers, she said.
Earlier this month a deal saw Countdown staff receive an average pay rise of 12% over a two-year collective agreement, with the union wanting to see other supermarket workers offered a similar rise.
First Union is working with the Tramways Union on the bus driver application, with secretary Kevin O’Sullivan saying they would have the numbers to kick off the fair pay process, “no problem at all”.
O’Sullivan says people in regional NZ and smaller towns will benefit most from fair pay agreements.
“I’m completely confident we’ll [see] no problem having the numbers. The issue will be once we get down to negotiations”.
O’Sullivan said a fair pay agreement would have the most impact in the regions and in smaller towns.
As Point of Order sees it, it would be fiendishly ironic if the wage increases negotiated under the new fair pay legislation add to inflationary pressure within the economy.
They can be triggered by support from 1000 workers or 10% of a workforce. The fair pay legislation stemmed from a major plank in the Labour Party’s election policy.
So how will that “avalanche” fit with what the Reserve Bank is trying to do with its action to halt the momentum in inflationary pressure?.
Will it be another economic disaster to be chalked up by the Ardern government?
Here is what Bagrie told AM viewers:
“What we’ve got there at the moment is success. It’s a great story that wages are moving up, of course, but we are now into that zone where it’s too much success because it’s actually adding to inflation.”
It’s only a month since the Ardern government passed into law its flagship fair pay legislation.
Workplace Relations Minister Michael Wood called it an historic moment for New Zealand workers.
“The Fair Pay Agreements Bill will improve employment conditions, by enabling employers and employees to bargain collectively for industry or occupation-wide minimum employment terms,” he said.
“By increasing bargaining co-ordination to agree minimum employment terms within a sector, outcomes for vulnerable employees will be improved and we will see growth in the incomes of New Zealand employees.”
Similarly, the Greens said the passing of the legislation was a “landmark change” and a “huge step forward”.
But will the enthusiasm for the new legislation be as strong if, as Cameron Bagrie says, it adds to inflationary pressure just as the Reserve Bank raises interest rates again in its battle to control the inflation that is pushing up mortgage bills so fast?
As the Dominion-Post reported this week,many sectors are already prepared to get their applications for fair pay agreements through on December 1.
First Union’s Louisa Jones said bus driver and supermarket retail members wanted to initiate the process and put in applications as soon as possible.
“This is massive. Workers are excited to try and do it.”
They already had over 1000 signatures for supermarket workers, she said.
Earlier this month a deal saw Countdown staff receive an average pay rise of 12% over a two-year collective agreement, with the union wanting to see other supermarket workers offered a similar rise.
First Union is working with the Tramways Union on the bus driver application, with secretary Kevin O’Sullivan saying they would have the numbers to kick off the fair pay process, “no problem at all”.
O’Sullivan says people in regional NZ and smaller towns will benefit most from fair pay agreements.
“I’m completely confident we’ll [see] no problem having the numbers. The issue will be once we get down to negotiations”.
O’Sullivan said a fair pay agreement would have the most impact in the regions and in smaller towns.
As Point of Order sees it, it would be fiendishly ironic if the wage increases negotiated under the new fair pay legislation add to inflationary pressure within the economy.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
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