2018 09 – Letter From New Zealand

A Letter From Our New Zealand Correspondent

Feargus O’Raghallaigh


Hi Ho Hi Ho, Its Off To Work We Go!!

‘The race to the bottom is a socio-economic phrase which is used to describe government deregulation of the business environment, or reduction in tax rates, in order to attract or retain economic activity in their jurisdictions’. Wikipedia

A recent experiment at a New Zealand company, Perpetual Guardian, has attracted considerable local attention and some international media interest.

The company reduced the working week to four days – but without cutting pay – over the months of March and April. The experiment was tracked by some academics.

The claimed results were dramatic.

It was according to The Guardian newspaper, “an unmitigated success, with 78% of employees feeling they were able to successfully manage their work-life balance, an increase of 24 percentage points.” (headline, date)

According to the New Zealand Fairfax online news service Stuff, “The company claimed productivity had increased by 20 per cent, and staff were more engaged and enthusiastic.” Managing director Andrew Barnes is to bring the results to his board for further deliberation.

As it happens there was another jobs and working conditions story that broke the same week. It was mainly pursued by a daily RNZ drive-time programme, Checkpoint with John Campbell. It related to working conditions in what is a significant business sector here, the courier delivery companies.

These companies, including a New Zealand Post subsidiary, CourierPost, do not employ (most of) their delivery drivers. They are in modern management parlance, ‘partners’. The drivers buy their own vans (according to the company’s spec), supply their own uniforms (again as specified), purchase their own mobile phones and scanners, pay their insurances and petrol costs and taxes and depreciate their vehicles.

They are at CourierPost (the only company to openly explain the situation) required to work 12 to 14 hours a day typically (with a 5am start), must also work Saturdays and are expected to do some Sunday shifts in the course of any month.

When all is said and done it is now being claimed by many of these ‘partners” that their take-home incomes are less than the statutory minimum wage NZD 16.50/hr. (about Eur 9.50/hr., GBP 8.25/hr.) The drivers are also contracted exclusively to their ‘partner’ company whether CourierPost, Fastway, PBT or whichever.

Many find aspects of the Campbell style offputting, cringing, ingratiating. On the other hand he is a campaigner – and it has to my mind cost him. He had a nightly TV prime time programme some years ago on TV3 and used it to expose the mess made by the then government in cahoots with builders (including the country’s biggest builder, Fletcher) and insurance companies of the post-earthquake reconstruction of damaged houses in Christchurch. Many people believe his persistent pursuit and exposure of the Christchurch scandal cost him his show and job at TV3. It certainly attracted the loathing of government ministers and the insurance business.

On the couriers he makes a single simple point: in the end these drivers are in a servant/master relationship with the courier companies. In any sensible interpretation, they are employees. The ‘partnership’ is a fiction that sweats the drivers and denies them rights they would otherwise have (holidays, sick leave and so on). Quite how IRD has gone along with this is a mystery – if it even knew about it. It is having its own staffing and pay problems and that dread term, “network upgrade issues” as a new computer system … makes a mess of things.

To be fair to Kiwis they are not unique. Every western economy including the UK and Ireland has for perhaps twenty years or more now experienced some version of this phenomenon. It goes under various labels – the precariat, casualisation, the gig economy, flexibility, productivity. The scale does vary from country to country and between industries. Age and training and gender of workers may also be aspects. The law of the land in its definition or otherwise of “worker” and “employee” for example, can be critical.

There are aspects to it all that tend to go unreported by the mainstream media. For example the links with poor health, fuel poverty and the like. Central to it all though has been the wide adoption by mainstream politics and by public servants of liberal market ideology in relation to workplace and employment law. The buzz words were ‘flexibility’ and ‘productivity’. And no, none of it would amount to a ‘race to the bottom’. Yeah, right.

Actually politicians are now chasing their tails as are tax departments, treasuries and social protection agencies and departments. In the latter case, for example, Ireland’s Department of Employment Affairs and Social Protection is stretching definitions to the limit to extend elements and aspects of the welfare (payments) system to hard up and beggared sole traders and self-employed contract workers. It is also pleading with workers to blow the whistle on suspected false self-employment. Tax collectors and workers are lining up court cases (and winning). Pimlico Plumbers and Uber are British cases in point. It is always good and interesting to read about an employer or business that makes that extra effort, even experimentally, that sees business beyond getting the most (out of people) for the least.

Perpetual Guardian is in a line of business that is highly professionally demanding – trustee services, wills, estate and wealth management. Maybe this business-cum-professional milieu is what prompted Andrew Barnes to experiment and address work/life balance and ideas of fairness at his business. It is (by the way) a line of business equally as competitive as courier delivery (and as it happens has a state agency, the old and respected Public Trust as a major player). But clearly in this case at least we have an outbreak of civilisation.

Meanwhile however, in too much of New Zealand commercial life, it is still about the race to the bottom. It is an approach to business that hasn’t worked even in its own terms for the Kiwi economy. New Zealand is a low- and sporadic growth, low productivity and low-wage economy, despite having arguably the most liberalised labour market in the developed world. Maybe Andrew Barnes has spotted something – without John Campell having to tell him.

Certainly, the new Labour-led NZ government seems also to see the light. It is proposing in effect to re-regulate the labour market; reinstall collective bargaining rights; and provide for a collective agreements framework to be called Fair Pay Agreements (FPAs). FPAs could ,depending on circumstances, be national, industry-wide or by an occupation. They would set minimum terms and conditions for all workers covered.

The government is, of course, going about all of this very cautiously, preoccupied with keeping good relations with the business sector and proving it is on the economy, a ‘safe pair of hands’ as they say. It fails to recognise or refuses to admit publicly at least, that it is loathed by business, regardless, that there is nothing it can do about this hatred and that the safe hands thing is a chimaera.

That said, there is now a working group that will thrash out the micro details, bargaining rules, dispute resolution procedures, the precise scope of agreements and so on. Employers have been roped in, the unions are represented, there some academic and legal types and chairing it all, a stroke of genius it has to be said, a former National Party leader and prime minister, Jim Bolger.

Bolger is a wily character, an old-fashioned Irish Catholic believer in Catholic Social Teaching, a Christian Democrat in effect. He is out of line and tune with the current Nats leadership and its continuing neo-liberalism. He never did believe in it even though some of the worse aspects were put in place while he was prime minister. Jim Bolger is no Red (he’s a farmer and his parents were Wexford farmers). But he never believed in the free markets in everything stuff – if he had to go along with it. He has some scores to settle with the National Party – and neo-liberalism more generally. Nice one, whoever came up with it.

“ They [neo-liberal policies] failed to produce economic growth and what growth there has been has gone to the few at the top…that model needs to change.” Jim Bolger