Sunday, March 17, 2013

Quote of the Day - 17 March 2013

Stuff reports:

Small businesses that cannot afford to pay their staff a living wage should probably not be in business at all, a union leader says.
First Union general secretary Robert Reid said while the movement supporting a living wage of at least $18.40 an hour was generally targeted at large corporations and city councils, some undercapitalised small to medium-sized enterprises (SMEs) needed to think about their business practices as well.
"Why should a worker suffer for being employed by a business that maybe shouldn't exist? One which won't invest in technology but thinks it can exist because it pays staff starvation wages?" said Reid, whose union covers workers in the finance, industrial, retail, stores and transport sectors. 

Robert Reid has a long history of involvement in left-wing causes, and at the far left end of the spectrum.  He has formerly been involved with the Workers' Communist League, and was one of the founders of Matt McCarten's Unite Union. Let's just say that his opinions are hardly mainstream.

But we have a question for Mr Reid. If those businesses who cannot afford to pay his "living wage" of $18.40 did indeed cease to exist, what would become of all the staff they employ? Over 80% of New Zealand's businesses employ five or less FTE staff. Employment in small businesses comprises around 30% of all New Zealand employment.

Small businesses have done it especially tough in the last five years. The 2012 report of the Small Business Advisory Group noted that more small businesses closed in the period 2009/10 than there were start-ups, and the overall number of small businesses in New Zealand fell by 1.9%.

We wonder if Robert Reid has actually taken the time to read this report. If he had, he would know how tough it is to be operating a small business at the moment, and how with the best will in the world, small business owners simply cannot afford to pay staff a minimum of $18.40 per hour.

The living wage is a nice concept, but it is utopian thinking in the current economic environment, and completely unaffordable for the vast majority of small businesses. Pardon our naivety, but we always thought that the first (or should that be First?) priority of a union was to protect its members' jobs, not to see the employers go to the wall and the workers sent to join the dole queue.   

1 comment:

Rafaella said...

A family member has recently invested in a cleaning business.

Three women are employed earning $18.00 per hour. One is a uni student, one a new immigrant and the other a middle-aged woman who had been on the unemployed benefit for some time.

They are loving being employed and overjoyed at earning $18.00/hour. The owner values their honesty and hard work by paying well above the minimum wage for unskilled labour.

According to a hard-nosed unionist the business should cease and these three woman plus the owner have no income just because the business can only afford to pay $18.00/hour.

Mr Reid of First Union needs to get out of his ivory tower and talk to small business owners.