Tag: union power

Friedman (1951) thought the union wage premium was overstated because it can’t be as big as doctors’ extract from occupational licensing

US union membership in public and private sectors and federal, state and local governments since 1983

Unions are dead on their feet in the private sector in the USA but going strong as ever in the public sector, especially in local government.


Source: Bureau of Labour Statistics Table 3. Union affiliation of employed wage and salary workers by occupation and industry

#TPPA CTU @FairnessNZ appeals to secretive @ILO committee to challenge NZ sovereignty over employment law

The unions are very much against investor state dispute settlement provisions of trade agreements, but are happy to be serial complainants to secretive International Labour Organisation (ILO) committees about employment law amendments they do not like. A fair defeat in the floor of parliament was not good enough for them.

As far back as 1993 the Council of Trade Unions has complained to secretive ILO committees about labour market deregulation in New Zealand. These secretive committees are formed under ILO conventions in New Zealand signed decades go.

Source: Submission of the New Zealand Council of Trade Unions Te Kauae Kaimahi to the Transport and Industrial Relations Select Committee on the Employment Relations Amendment Bill Part, Wellington 25 July 2013.

The competence of these ILO committees are clearly in question if they hear an appeal under a convention New Zealand has not ratified. Imagine the outrage if an investor state dispute settlement panel heard on appeal despite New Zealand having a carve-out for the topic concerned. An example would be tobacco regulation.

Justice Scalia has a fine critique of those who believe in activist judges and living constitutions that applies just as well as to activist international adjudicators and living international treaties:

You think there ought to be a right to abortion? No problem. The Constitution says nothing about it. Create it the way most rights are created in a democratic society. Pass a law. And that law, unlike a Constitutional right to abortion created by a court can compromise. It can…I was going to say it can split the baby! …A Constitution is not meant to facilitate change. It is meant to impede change, to make it difficult to change.

Rather than use normal democratic means – trying to persuade each other and elections – the union movement threatened to go to a secretive ILO committee made up of members of uncertain competence and impartiality over the recent laws on collective bargaining.

Source: Submission of the New Zealand Council of Trade Unions Te Kauae Kaimahi to the Transport and Industrial Relations Select Committee on the Employment Relations Amendment Bill Part, Wellington 25 July 2013.

The union movement was outraged at the fact that New Zealand laws it likes could be questioned at international forums. It said this in a recent submission to the Health Select Committee of Parliament.

Source: Submission of the New Zealand Council of Trade Unions Te Kauae Kaimahi to the Health Select Committee on the Smoke Free Environments (Tobacco Plain Packaging) Amendment Bill, Wellington March 2014.

The unions were equally outraged about dispute settlement procedures in the recent free trade agreement with Korea. The unions were absolutely affronted at the idea that the sovereignty of the New Zealand Parliament could be challenged at a foreign forum.

Source: Submission of the New Zealand Council of Trade Unions Te Kauae Kaimahi to the Foreign Affairs, Defence and Trade Select Committee on the Free Trade Agreement between New Zealand and the Republic of Korea, Wellington 24 April 2015.

These protestations of the union movement would have much more credibility if union did not run off to a UN or ILO committee every time they were on the losing side of a vote in parliament. The unions are happy with those parts of international economic law that serve its interests but behave hypocritical about the other parts that do not. As United States Supreme Court Justice Antonin Scalia said

The virtue of a democratic system [with a constitutionally guaranteed right to free speech] is that it readily enables the people, over time, to be persuaded that what they took for granted is not so and to change their laws accordingly.

Nothing stirs up the impassioned (and most other people as well) more than depriving them of their right to support or oppose what is important to them through political campaigns and at an election.

The losing side, and we all end up on the losing side at one time or another, are much more likely to accept an outcome if they had their say and simply lost the vote at the election or in Parliament. Power to the people as long as I am on the winning side instead is the motto of the union movement.

The unions losing on labour market deregulation is no different from any other political difference within New Zealand. Both sides passionately but respectfully attempt to persuade their fellow citizens to accept their views.

Win or lose, advocates for today’s losing causes can continued pressing their cases, secure in the knowledge that an electoral loss today can be negated by a later electoral win, which is democracy in action as Justice Kennedy explained recently in the US context:

…a democracy has the capacity—and the duty—to learn from its past mistakes; to discover and confront persisting biases; and by respectful, rationale deliberation to rise above those flaws and injustices…

It is demeaning to the democratic process to presume that the voters are not capable of deciding an issue of this sensitivity on decent and rational grounds.

The process of public discourse and political debate should not be foreclosed even if there is a risk that during a public campaign there will be those, on both sides, who seek to use racial division and discord to their own political advantage.

An informed public can, and must, rise above this. The idea of democracy is that it can, and must, mature. Freedom embraces the right, indeed the duty, to engage in a rational, civic discourse in order to determine how best to form a consensus to shape the destiny of the Nation and its people. These First Amendment dynamics would be disserved if this Court were to say that the question here at issue is beyond the capacity of the voters to debate and then to determine.


@FairnessNZ shows how everything is getting better in NZ @FIRST_Union

The union movement posted two excellent charts during the last election showing how well things have gone since the 1980s economic reforms and their consolidation in the early 1990s.

The charts show that real wage growth returned in the early 1990s after the passage of the Employment Contracts Act and the consolidation of government finances. This was after two decades of wage stagnation in what the unions regards as the good old days.

Furthermore, as the union chart shows, the average incomes of the top 1% in New Zealand is a pretty stable for several decades. Whatever else is happening New Zealand, you cannot blame it on the top 1% because they are lazy. What increase there was in average top incomes in New Zealand was followed by the return of real wage growth in New Zealand and a long economic boom where the unemployment rate drop below 3.5%

The main bugbear is housing affordability which is a result of the Resource Management Act passed in 1993 as the union chart shows. The unions, the Labour Party and Greens all support the laws that result in this housing unaffordability.

Collective bargaining coverage across the OECD, 1990 and 2011

Despite all the hullabaloo, collective bargaining agreement coverage is not declined by that much outside of the English-speaking countries. Outside of the USA, the top 1% are very lazy so they have not benefited from this decline of union power. Within the USA, so few people are covered by collective bargaining agreements for so long that it would not figure in the rising top incomes over the last 30 or more years.


Source: Economic Policy Reforms 2015: Going for Growth – © OECD 2015 and OECD Employment Outlook 2002.

As for New Zealand, the main difference between 70%  collective bargaining agreement coverage in 1990 and less than 20% collective bargaining coverage in 2011  is real wage growth returned to New Zealand in the early 1990s after 20 years of wage stagnation. The major economic event of the time was the passage of the Employment Contracts Act.