January 23, 2009 Media Release

Freezing pay would deepen recession - EPMU

The Engineering, Printing and Manufacturing Union says it has no problem with John Key’s plan to freeze his own pay but the calls for this move to be followed by the private sector are dangerously misinformed.

The EPMU says any moves to freeze wages, which would in effect be real wage cuts, would further weaken the economy and the EPMU will continue to seek above-inflation pay increases to ensure its members don’t bear the brunt of the recession.

EPMU national secretary Andrew Little says higher wages are one of the key elements to avoiding a vicious economic cycle.

“We saw in the 90’s that meeting a recession with wage cuts only deepens the recessional cycle by taking much needed money out of the economy, a better approach is to maintain and strengthen a framework of work rights that encourages higher wages and a better chance for a ground-up recovery.

“New Zealand’s low wages are legacy of the last recession and they helped create a climate in which Kiwis supplemented their income with debt. That has formed a major part of our vulnerability to the current recession and any move to freeze wages would only sow the seeds for the same problems through the next economic cycle.

“It’s fine for the National/Act government to freeze their own pay but if, as many commentators are claiming, it is meant as a tacit instruction to undermine the pay of New Zealand workers in the public and private sector then it is economic foolishness that would only dampen an economy desperately in need of stimulus.

“We will be continuing to push for above inflation pay rises throughout 2009.”

This year the EPMU will negotiate 570 collective agreements covering 25,000 of its 45,000 members.

ENDS

© Scoop Media