Now job growth is a bad thing

I thing politics has got to a farcical level when the Opposition complain about jobs moving from Australia to New Zealand. The SMH reports:

HUNDREDS of Australian jobs have been shifted to New Zealand as local producers try to avoid the impact of high wages, a soaring Australian dollar and restrictive labour laws.

Woolworths is the latest to transfer jobs across the Tasman. It transferred 40 contact centre jobs to Auckland this week. Imperial Tobacco has also announced it will move cigarette manufacturing from Sydney to New Zealand.

The companies are following in the footsteps of the food production industry, which has been shifting jobs out of Australia to take advantage of New Zealand’s lower wages.

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Heinz Australia recently scrapped more than 300 jobs across three states in favour of its large plant in Hastings, New Zealand’s largest food processing and food producing centre.

The International Labour Organisation says Australian manufacturing workers earned more than $US35 an hour in 2008. In New Zealand the rate is under $US20 an hour.

Average weekly earnings for manufacturing workers in Australia are higher than those in Canada, Britain, New Zealand and the United States, says a study which put Australian earnings at more than $1000 a week, versus about $700 in NZ.

Now Labour for four years has gone on about jobs. It has said that the number one priority must be more jobs. If you try to discuss welfare reform, they say “what about the jobs”. No matter what the issue, they say “what about the jobs”.

So what do they say to jobs moving from Australia to New Zealand:

“Labour does not want New Zealand to become Australia’s Mexico, yet with lower value jobs such as making cigarettes that is exactly what is happening.

“Bill English has been misdirecting his energy on praising the advantages of low wages to attract Australian jobs rather than coming up with real ideas to grow the economy.

“There are record numbers of Kiwis leaving for Australia. They are not going so they can work in call centres or cigarette-making factories,” David Parker said.

This is just bullshit elitism, that must be unique to the Wellington beltway. Go out to a provincial town with high unemployment and tell them that a job in a call centre is not worth having, and they should remain on welfare.

Anyone who buys into this sort of bullshit is seriously out of touch with reality, and reflects more their elitist views.

They are also economically ignorant also. If you argue against Australian companies creating jobs in New Zealand because our wages are lower, you don’t understand the basics of supply and demand. Remember it is the market which broadly sets wages – not Goverments.

Now if you have more jobs created in New Zealand, it increases the supply of jobs. What does increasing the supply do? It pushes wages up. Just as when the supply of jobs diminishes, then wages drop or at least do not increase in real terms.

Next time Labour complains about unemployment, remember how they think some jobs are not worth having. They’d rather people be on welfare than working in call centres.

As for closing the wage gap with Australia. There is only one sustainable way to do that – greater productivity including labour productivity. The very thing that Labour is fighting against at the Ports of Auckland, where the union is striking rather than accepting a 10% pay increase in return for greater labour productivity.