Behind the official strike statistics

Press, 7 November 1978, Page 18

Behind the official strike statistics

NORMAN MACBETH, the author of this series, i; a former editor of “The Press.” He left journalism early this year to engage in economic research, and was commissioned by the New Zealand Employers’ Federation to make a study of industrial unrest. This is the first of four articles in which he reports on his assignment.

Industrial stoppages cost wage-earners an estimated SI 1.4 million in lost wages in the year ended June, 1978 — not far short of the record $11.7 million lost in the previous 12 months.

The latest year’s, figures involved 168,571 workers, compared with 209,449 last year. The strikers lost $67.62 each on average, compared with $55.75 last year.

Even in the record 1976-77 year, wages lost represented scarcely 1.5 per cent of all wage and salary payments. Much more production time is lost, according to Labour Department surveys, from industrial accidents, absenteeism and sickness than from industrial stoppages. A 1.975 survey showed that only one day of every 65 days’ absence from work was because of an industrial stoppage. The figures quoted are, however, only the tip of the iceberg. “Political” strikes and unauthorised stop-work meetings for protests are not “industrial stoppages” in the Labour Department’s definition of the term. Many stoppages are not reported, and few of the suspensions of workers in other companies who lose their employment while a strike runs its course are reported. “There are too many difficulties involved in trying to collect information on indirect worker involve-

ment in other establishments,” the department says. Not only are the official statistics inadequate, but the definition of an industrial “stoppage” excludes the type of activity considered by some employers to be more disruptive than a strike; withdrawal of co-operation (usually) stopping just short of sabotage.

Industrial unrest, in the widest sense, contributes to absenteeism, and perhaps even to occupational illness or accidents. No statistical measure of these effects of industrial unrest has been, or perhaps ever could be, devised.

“The amount of wages lost does not measure the economic disruption brought about by industrial stoppages because it does not take into account losses in production orders that cannot be met locally and overseas, and the unquantifiable social costs that accompany any stoppage of work,” the department says. As a rough measure of production lost through strikes, the value of wages lost (as officially — and conservatively— estimated) may be multiplied by five. Salaries and wages, according to the statistics of industrial production, have averaged between 19 and 20 per cent of the value of production in

the last decade. Recorded “industrial stoppages” must have cost the country at least $6O million in lost production in each of the last two years. The Government loses tax revenue from every strike, and the forgone revenue must then be made good by extra borrowing; in the end, the lost tax revenue has to be made up by other taxpayers. When striking workers lose $11.4 million in wages, the Government must lose about $5 million in tax on wages, and perhaps $2 million in tax on company profits. Shareholders in the companies employing the strikers lose (roughly) -the same amount as the Government. If the company is an exporter, the country’s overseas earnings are affected. Probably the biggest loss in export earnings by a single New Zealand company

through industrial action wi the $l2 million of sales c newsprint and wood pulp b. the Tasman Pulp and Pape Company in 1976. Comparison of New Zealand statistics with those of other countries does not suggest that New Zealand has an unusual level — high or low — of industrial unrest.

"An international comparison using 1974 stoppage figures shows that while New Zealand did not have the exceptionally low level of stoppage activity of some Western European countries, it rieverthless fared better than such countries as Australia, Canada, Italy, the United Kingdom, and the United States,” says the 1975 report of the research and planning division of the Department of Labour. (The most recent report in this series is 1976. The 1977 report is still being prepared — an indication of the low

priority assigned bv the department to the subject of industrial unrest). The report lists the number of working days lost per thousand workers employed in 18 countries, ranging form one working day per 1000 workers in Switzerland o 1093 per 1000 in Australia, lew Zealand, with 156 days per 1000, was ranked seventh — between Belgium (153) and France (160) — in 1974.

Even 100 per cent compliance with the department’s requirements would fall well short of providing a reliable indicator of the real costs attributable to industrial strife in New Zealand. How can the loss of business opportunities — to the individual company in New Zealand, or to the country as a whole in forgone export sales — be measured? A potent cause of industrial unrest (“conflict. ' if you prefer). — to be examined in subsequent articles in this series — is rivalry among New Zealand's 292 trade unions. It shows up in arguments about “preserving relativities” and in demarcation disputes Whether the rivalry results in a higher level of wages throughout industry is arguable. but what is beyond dispute is that it lowers productivity.

The report, based on figures in the 1975 Yearbook of Labour Statistics published oy the International Labour Office, notes the difficulties in making international comparisons, but nevertheless makes the comparison quoted above. From ■ pre* liminary inquiries, I aril prepared to assert that no-one in the department knows whether the statistics of the 'other countries listed are as inadequate and misleading as the New Zealand statistics.

It is my contention that reduced productivity attributable to industrial unrest is more serious than has been officially, or publicly, acknowledged: and that more determined efforts should be made to remove these causes of conflict. Barring an early (and unlikely) improvement in New Zealand's terms of trade, I suggest that increased productivity is New Zealand’s best way of trading its way out of its present economic difficulties.

Departmental officials readily admit that, lacking anv statutory authority to force employers to supply full and accurate details in the printed forms giving notice of industrial stoppages, their information must be incomplete. Employers admit that they do not give the forms more serious attention than anv of a dozen other questionnaires they are periodically invited to fill in.