Yesterday was Labour Day — a day symbolic of a deep divide in our politics.
Folklore traces it back to Samuel Parnell’s demand in 1840 for an eight-hour working day. The first Labour Day was in 1890, actually a year of defeat for the union movement. It was Mondayised in 1899.
The Labour party owes its name to the wage labourers, skilled and unskilled, it was formed to represent. Unions channelled that support into the party organisation and Parliament.
Now unions’ principal weight in the party is as recruiters of footsoldiers for election campaigns, though they are set to get, at next month’s conference, a formal minority say in electing the leader. The party still takes notice of, and often aligns with, union policy positions. Note, for example, its deference to teacher unions.
History still infuses Labour’s policy on jobs, wages and the organisation of and safety in the workplace. Despite four decades of erosion of the old industrial working class on which Labour was founded, the line which divides Labour from National, left from right, runs through the workplace.
Labour sees wages as households’ sustenance. National sees wages as business cost. It is actually not as black and white as that and once, when National leader, English took angry umbrage at this description. But it is a valid marker of the direction in which the two parties instinctively lean.
For example, National last week, Labour Day looming, set down a bill to cut young people’s wages. It presented this as furnishing job opportunities for the young. The actual rationale (which has some logic) is that businesses should not have to pay a straight-out-of-school know-little the same minimum as an adult who has been about a bit in the world.
Ministers, especially English and Steven Joyce, have also argued the value of our lower, more flexible wage structure vis-a-vis Australia. That is not the only reason some Australian and global companies have moved some operations here. There are other efficiencies, specialties and locational merits. But a more flexible labour market is a significant motivation.
By more flexible is meant less regulatory constraint in setting wages and conditions, including for sackings. Legislation still in train will make negotiating multi-employer contracts harder. This follows several flexibility enhancements in the first term.
The rationale is that companies will make higher profits and then invest more, which will create jobs and over time raise real wages. That is, flexibility promotes socioeconomic “mobility”.
The mobility argument has been losing persuasive weight because the modern global labour market has eaten away at well-paying male factory jobs in rich economies, most recently in the United States, once but no longer the exemplar of mobility. (For a serious right-wing discussion of the economically corrosive effects of the resultant increase in inequality and need for political adjustment, see last week’s Economist magazine.)
Labour brings to this argument a suite of mixed-economy state interventions in the market designed to protect and manufacture jobs in manufacturing: the sort of jobs that pay men well.
Labour can point to Germany, which maintains a high-wage manufacturing-heavy economy (though helped by a relatively weak euro exchange rate that keeps its real wage costs below where they would be on an open market). Germany has a more cooperative union-management arrangement, despite considerable loosening of its labour market over the past decade.
David Shearer banged on in this vein in a speech last week, echoing earlier speeches by David Parker and David Cunliffe. Expect a lot more as Labour seeks to differentiate itself from National (and its own 1980s past) by highlighting the sagging supply of good-wage jobs.
But raising real wages is not a one-trick wonder. Building an economy that delivers higher-paying jobs of the German — or, Cunliffe’s favourite, Danish — sort is a two-decade journey if policymakers start now and (a bigger “if”) find an effective formula.
That is part of the reason that there is also a long journey ahead for Labour to corral dubious voters into its camp.
National has been losing ground. In TV3’s poll, for example, it was polling between 49 and 55 per cent in the second half of 2011 but this year has been in the 40-46 range. John Key, its star attraction in 2011, has dropped as preferred Prime Minister from 49-55 per cent to 40-46 per cent. Percentages positively assessing him have fallen from 68-76 to 54-61. Those saying he is more honest than other politicians have slipped from 49-64 to 48-49 per cent.
But these are still strong numbers. And Labour has still not risen to a party-vote poll rating of 35 per cent, which was what its electorate vote was in 2011. That is not, or not yet, a track back to office.
So Labour could commemorate Labour Day yesterday but not celebrate it. The workplace is National’s still. Labour has its work cut out, so to speak.