Bryce Edwards Analysis: Massive and positive victory for low-paid workers

Has it become fashionable to support big pay increases for low paid workers? That’s how it appears, given the almost-blanket positive coverage of the Government’s settlement with unions to increase pay for care and support workers in the aged care and disability sectors.

The agreement involves a significant transfer of money to low-paid workers, and potentially has quite a few ramifications for the rest of the labour market. Yet it’s hard to find any criticism or negativity about this landmark win for workers.

Most of the commentary is entirely jubilant and full of praise for the workers who have taken on an industry and economy and won a massive victory, seemingly against the odds. For perhaps the best example of this, see Mark Sainsbury’s Care workers’ historic pay rise tempered by decades of exploitation.

Sainsbury says: “This is a historic day. It’s not often that more than 50,000 low-income care workers get some good news – a 43 percent pay rise. But let’s be brutally honest – the reason the pay hike is so massive is that these workers were being exploited to begin with.”

He goes on to sing the praises of trade unions (“yes, there is still a vital place for groups representing workers’ rights”), and paint the picture of a “David and Goliath battle” in which working class hero, Kristine Bartlett, managed to change history. And although the $2 billion settlement money still has to be found, “that’s no excuse for underpaying human beings. We owe so much to Kristine Bartlett and the other cases the Service and Food Workers’ Union took on; workers struggling for all those years because of the mentality it was ‘women’s work’, doing work we couldn’t or wouldn’t do, for a pittance.

This view seems to be shared by all the main newspapers, who have published strongly supportive editorials today backing the settlement.

The Otago Daily Times says “the settlement remains a giant step towards giving some low-paid New Zealand women (and men) the dignity, respect and financial reward they deserve” – see: A giant step for womankind.

The editorial also sells the settlement as positive for everyone, as it is “redistributing the wealth in a more equitable manner. More money to women means more money to families and children (and it is likely to be money spent locally). It also means women have more chance to put money towards vital retirement savings and the like. Surely everybody wins? The message the settlement sends about value (of women, their work and those they look after) reaches far beyond the pay packet.”

Today’s New Zealand Herald editorial says “Nobody will begrudge residential carers the big pay increase agreed yesterday between their union, employers and the Government. The carers, predominantly women, provide services to the elderly and disabled that are not always pleasant but need to be performed with patience, compassion, professionalism and a good deal of common sense. On all these requirements they have deserved to be paid much more the minimum wage” – see: Pay equity deal could lift all low incomes.

The editorial even positively suggests that the settlement could have flow-on effects in other sectors, increasing wage rates, and “If the decision starts to lift all low incomes, it will do a great deal of good.”

Todays’ Dominion Post editorial points out that “This is quite simply a huge change in New Zealand’s approach to wage setting, and nobody knows where it will lead”, but that it is “wholly welcome” – see: Justice for women in the workplace will cost, but it is welcome.

The Press editorial gives a good background explanation of the case, and has a simple message: “It is about whether New Zealanders are paid enough, full stop” – see: Aged care settlement an important pay equity milestone. And it suggests that even more needs to be done: “The settlement does not solve all issues that could be said to fall under the umbrella of pay equity and access to work. There are still barriers to working parents and more attention must be paid to making childcare affordable and easily accessible. Workplaces must become more family-friendly for both men and women.”

Articles that explain the settlement focus on the difference it will make to those workers – especially women – at the bottom of the labour market. Accounts about the plight of those earning around the minimum wage are an eye-opener. In Audrey Young’s article, I haven’t had time to breathe or let it all sink in, says victorious rest home worker Kristine Bartlett, Kristine Bartlett – the aged-care worker taking the original court action against her employer – recounts why this decision “will be a life changer” for the workers.

Bartlett says: “I’ve seen them come to work sick, they haven’t been able to afford to go to doctors, I’ve seen them walk in the rain, I’ve seen them come without lunch, and that’s what breaks my heart.” And “This case is going to be a big life changer. It is going to let them live with a little bit of dignity and hopefully bring them out of poverty that a lot are in.”

Another aged-care worker, Mavis Pearce, is interviewed in Brittany Baker’s ‘New era’ ushered in with equal pay deal for care workers. She recalls how the low rate of pay has impacted on her life: “It was such a low income that Pearce would often miss meals just to feed her three children”. She says “Nine times out of 10, you’d feed the kids and went without yourself”. See also Cate Broughton’s Pay equity deal a ‘monumental step forward’ for social justice.

National Party blogger David Farrar has suggested that the settlement is “probably the biggest victory for unions in the last 30 years” – see: $2 billion and not one extra service provided. And he’s the unique voice of opposition to the deal, saying “I can’t support something that costs $2 billion and doesn’t result in a single extra person being provided care.”

But it’s Farrar’s own National Government that is implementing this huge victory for low-paid workers. So what’s going on?

Leftwing political analyst Gordon Campbell is also bemused by a National Government taking such an apparently radical decision, especially one that furthers the goal of gender pay equality: “”Strange indeed to hear a National Prime Minister not only singing the praises of raising the wages of the lowly paid, but also preaching that this will enable employers to reap future benefits from reduced staff turnover via upskilling their workers and offering them a viable career path. Wow. Can this really be the same National Party that threw the workforce to the wolves of the free market when it championed the Employment Contracts Act? Can it be the same National Party whose first act after winning the 2008 election was to scrap the pay equity unit within the Labour Department? Similarly, wasn’t it an incoming National government that began its term of office in 1990 by scrapping the Employment Equity Act that had allowed for intersectoral pay comparisons?” – see: On the aged-care settlement.

Campbell suggests that the answer may be that this sort of settlement could only actually occur under a National Government: “perhaps only a centre-right government could have pulled off the politics of this large pay rise to workers in the aged care, disability care and home support sector. (A Labour government would have been accused of colluding with its union mates, and of recklessly putting the economy at risk for ideological reasons.)”

National’s unusual move is also examined by Audrey Young, who says “It’s National, but not as we know it”, and asks: “So what motivated National, the party of the bosses, to give some of the lowest paid workers $2.048 billion over five years? And how did the least militant action by a union result in the biggest win in living memory?” – see: A stunning deal that fits the times.

She suggests that National had options to fight the claim, but “That would have been unacceptable to many in the Cabinet, not least because of the essential truth of the claim.” Young points to the likelihood of “Paula Bennett, Judith Collins or Anne Tolley” leading the charge for these low paid women in the caucus, and against the ideology of market forces that has made these workers poorly paid.

She also argues that National’s pay equity settlement can be understood within New Zealand’s political culture, which she says is about rectifying inequities: “These days, in a country where addressing grievances is part of the core of what we are, it would have been unacceptable to have either ignored the grievance going through the courts or to have overridden it with law.”

Young also praises the union movement: “The Government had the good fortune to be dealing with a realistic and smart union. The activism over decades by feminists and unionists helped to shift views about women in unions, women as workers, and pay equity.” Furthermore: “The union was not hung up on dealing with National or back pay. It was not hung up on only union members getting the benefits. The result was the best evidence of the best that unions can do.”

In line with this, Claire Trevett reports that Prime Minister Bill English “acknowledged the unions for a ‘constructive approach’ in what he described as tough negotiations and said the increases were just reward for a dedicated workforce which had been underpaid in the past” – see: Prime Minister Bill English warns other health workers not to expect pay hikes after careworkers’ pay equity victory.

And writing for the NBR, Rob Hosking suggests that the settlement shows just how much this government has moved away from an earlier neoliberal labour market approach – see: What to worry about from the $2b pay equity settlement (paywalled).

Hosking says: “Tripartite negotiations of the kind normally associated with the drag-down, late-night-whisky-and-sausage-roll meetings in the Prime Minister’s office back in the 1970s have been going on in those back rooms for some time. While these talks were not quite as crudely political as the days in which Sir Robert Muldoon and the Federation of Labour president of the day would emerge and blurrily insult each other for the cameras, there is certainly a sense in this settlement of the government taking a much more hands-on approach to such matters than has been the norm for a generation. And this, really, is the most significant part of the announcement by Prime Minister Bill English and Health Minister Jonathan Coleman yesterday. The government is engaging in something of a ‘back to the future’ approach to such negotiations.”

What’s more, there seems to be a surprising degree of positivity about the settlement from private sector – see Aimee Shaw’s Government funding for healthcare workers welcomed.

Finally, for some serious satire about these issues, see my blog post of Cartoons about pay equity in New Zealand.