Matt McCarten: Key signals another attack on workers

The bargaining system John Key suggests has been tried before. Photo / APN

John Key's cockiness is showing - he announced this week he intends to weaken workers' rights even further. He will create bargaining agents to negotiate company employment agreements for workers rather than having a trade union do it.

A previous Jim Bolger government brought in this system and almost without exception the workers were shafted. That's because a freelance negotiator is more interested in getting any deal as promptly as they can.

In effect the bargaining agent "sells" any deal as the best they can get. Workers feel they have no choice but to accept what's on offer then pay the negotiator's invoice.

Let me give one example under the old system Key wants to bring back. A few years ago I was approached by a group of workers from a large, foreign-owned call centre with several hundred workers. They thought they had a union but couldn't remember which.

After making inquiries I found the human resources manager from another company based in Christchurch had done the negotiations for these workers at the request of their employer.

The contract had no termination date and specified no wage rates - let alone any annual wage increases. Every worker had a dollar deducted from their weekly wages as a "contract fee" that was then forwarded to the negotiator.

If a worker got into trouble they had to engage a lawyer at their own expense.

The overwhelming majority of these workers hadn't had a wage increase in three years.

During this period this HR boss, parading as a bargaining agent, had received more than $75,000 in fees and, unless we had stepped in, he would have continued to supplement his salary by a tidy $20,000 every year for no work.

All this was legal and the company's HR boss and her mate, the negotiator, told me with a straight face that, as every employee had signed up at their employment interview, they had freely agreed to this arrangement.

And this company, a household brand I might note, wasn't the worst. I won't name it here as it has new owners and none of the guilty parties work there now.

When a right-wing government wants to change employment laws it's never intended to help workers.

It's about giving bad bosses more control so they can drive down wages.

Key has also announced he wants to reintroduce youth rates and many of his colleagues want the minimum wage abolished.

The conventional employer wisdom is that wage reductions are good for the economy and allow bosses to take on more workers. No one has been able to point to any reliable research to back it up.

Even our own Labour Department found when youth rates for 16 and 17-year-olds were abolished youth employment actually went up - presumably because more teenagers offered to work. This department also hinted that if the minimum wage went up to $15 an hour, there could be 6000 fewer jobs. They couldn't back this assumption up and admitted it was a guesstimate.

Well, here's some good news for them. A well-respected think tank, the Center for American Progress, this week released a report containing 15 years of research that found raising minimum wages (and consequently all low wage rates) didn't cut job growth and flushed more money into the economy.

Its director Michael Reich, a senior professor at Berkeley University, said their research showed businesses didn't suffer from paying slightly higher wages.

In fact, he argued it benefited employers as it reduced turnover, allowing a larger pool of workers to be more experienced and productive.

As well, low-paid workers spend their money so the result is that it stimulates the economy. Finding solutions to creating wealth for shareholders as well as workers seems beyond the capacity of our business elites.

It's easier to remain intellectually lazy and get the Prime Minister to screw workers again to maintain profits.

Key this week exposed himself as just another political hack helping the greedy at the expense of the workers who actually create the wealth.