Lowering wages in NZ should not be the response to redundancies

The Council of Trade Unions is cautioning against a race to the bottom in wages, as a response to two major job offshoring announcements this week.

"The solution to offshoring is not to lower wages and conditions such as annual leave here. The solution lies in lifting the value of goods and services," CTU president Helen Kelly said Sunday.

"Investing in manufacturing opportunities, carrying on with programmes to lift skills, and leveraging new technologies will create high value jobs in New Zealand at a faster rate than a business model which outsources production."

"The CTU's immediate concern right now is with the workers affected by the job losses, in what is a very distressing time for them. They need the support of government agencies and other groups such as industry training organisations to ensure they are getting all possible assistance. Unions will challenge employer decisions to relocate offshore and will also work closely with affected workers."

"Both ANZ National and Fisher & Paykel are profitable companies in New Zealand, and these were good New Zealand jobs that didn't need to be lost. In the case of ANZ National, whose profit last year was $1.1 billion, the Reserve Bank should step in to prevent this unnecessary move."

"The CTU has also submitted to the select committee enquiry into the future monetary policy framework on ways to relieve pressure on the exchange rate and reduce interest rates. Fundamentally, the Official Cash Rate should not have to be the only tool to address inflation."

"Monetary policy needs to have specific reference to the impact of a high exchange rate on export performance and employment, and the OCR decision should be made by a small number of people as is the case overseas, rather than the Governor alone. In addition, other options such as interest-linked savings, removing loss ring-fencing for rental property investors, and capital gains tax on investment need to be considered."

"Workers in many countries face the threat of off-shoring" said Helen Kelly. "Unions are also part of an international movement of workers, and just as we stand up for decent jobs for New Zealand workers, we also stand up for the rights and conditions of workers in developing countries. The goal needs to be lifting everyone's income, not a race to the bottom," she said.