When is Sleeping Working ?

So the so called “sleep over case” is in the news.

First up let me declare a conflict I am effectively the employers representative for an organisation that employees people to do sleep-overs. Nothing I say here represents the views of my employer and are my own personal opinions which may or may not be reflected in my working role.

So to answer the question it is when you are sleeping on your employers premises and have your freedoms curtailed to a sufficient extent. To be more specific the courts talked about your inability to leave, your inability to say have friends over (in other words certain activities are banned) and be available to work at any time.

If we reframe this to say a shop assistant waiting for a customer we still recognise them as “working” while waiting and it is principally because the same tests apply, they can’t leave, can’t do certain things and have to work at any time when a customer arrives. The only difference they have to have their eyes open versus shut.

So I am convinced you are working when doing a sleep-over, in fact in reality despite the legal arguments all the employers were convinced which is why they paid people to do this task. What is mostly at question is the value of the work.

Having decided that the activity is work you then have to abide by our old friend the Minimum Wage Act and this is really what the decision is about, the payment of the minimum wage and not really an argument about work or not work.

Problem is we run into my gardening argument, The government and by extension the employers that it funds do not value this work at the minimum wage level (or they would already be paying it presumably). They value it at a lower level, (as best evidenced by the government threatening legislation to make this issue go away and making specific reference to not paying the amount asked for) now this lower level varies across those employers and as an aside I suspect that if IHC had valued it a bit higher it never would have gotten to this point.

I also find it interesting that despite the Union and Employees agreeing to various payments over time all this is going to be overturned which is effectively the government (via legislation) saying you are not competent to make a bargain between yourselves as we know better. Admittedly in the case of IHC the Union have apparently been discussing this for some time so they may dispute that they agreed, however they did sign up for what they have now one way or another.
But in the case of my employer this has never been an issue but we are now suffering the same outcome.

I am also interested that this is potentially not in the best interests of the employees as there are a number of definite and potential consequences stemming from this but without going into my theories on what might happen next they all amount to one thing. The amount of work available is going to reduce as the cost has now increased. Now in the best case we will find equilibrium from the status quo where the total amount paid will be the same, however there is a real risk that there will actually be a reduction in the overall amount.

Another quick reaction from some of the providers is that they are going to erode the quality of the service they provide (by grouping people into higher numbers) something that has been rightly deplored by the Disability Sector, however it is one of the predictable responses to a need to reduce costs.

So given that the total amount paid to workers will likely stay the same or reduce how did this help anyone other than high priced legal counsel, not the workers and not the vulnerable members of society that they are doing a fantastic job caring for. Oh I remember it is all part of the process.

Mary Mary Quite Contrary

How does your garden grow goes the rhyme and ignoring any issue Mary might have the garden at my house grows too much for my time or interest to keep under control. What I really need is a gardener but I don’t have one because.... potentially for a number of reasons but for now I want to look at the cost or put another way the wages I would have to pay.

New Zealand (as with a number of social reforms) was the first country in the world to introduce a minimum wage rate. This week has seen the government raise the adult minimum wage from $12.75 to $13.00. which produced the predictable claim and counter claim by the vested interest groups of unions and employers. My reflex response was to side with the employers who were running the standard supply and demand argument.

This is where my garden comes in, if I was allowed to pay someone $1 per hour and could find someone willing to work for such a paltry amount there is no doubt that I would employ a full time gardener (and likely as not a cook and housekeeper) but at $13.00 per hour I am not going to do that so there you go case proven. The artificially higher wage rate clearly limits employment opportunities and while the dollar example is not realistic somewhere along the line between $1 and $13 is the point at which I change my mind. Potentially before I reach that point someone may have been willing to do my garden but we will never know.

However I realised I was not well versed in the contrary point of view (the union commentator didn’t help he was operating strictly in sound bites and slogans) So I looked it up and here is a handy table I found on Wikipedia

Supporters of the minimum wage claim it has these effects:

1. Increases the standard of living for the poorest and most vulnerable class in society and raises average.

2. Motivates and encourages employees to work harder (unlike welfare programs and other transfer payments).

3. Stimulates consumption, by putting more money in the hands of low-income people who spend their entire paychecks.

4. Increases the work ethic of those who earn very little, as employers demand more return from the higher cost of hiring these employees.

5. Decreases the cost of government social welfare programs by increasing incomes for the lowest-paid.

6. Encourages the automation of industry.

7. Encourages people to join the workforce rather than pursuing money through illegal means, e.g., selling illegal drugs

So looking at each of these in turn

1 Seems doubtful to me as wages are a relativity exercise a 2% increase for the lowest paid is likely to trickle up to the best paid making the relative standard of living static. If you won’t buy that argument then you would have to agree that wage inflation feeds into general price inflation making the increase payment merely a compensation for inflation at best or the driver of inflation at worse.

2 Nope, not going to buy that one. People don’t work harder if you pay them more, time and time again studies have shown little correlation between pay and performance unless it is a direct system such as piece work.

3 OK I will accept this one as it is more or less my argument in rebutting number 1, but I am not sure this is a benefit for the low paid, it sounds more like a benefit for shopkeepers.

4 Err really? So every time you get a rise your boss finds ways to make you work harder (and in the process needing less of you presumably) Well I am not sure that is true for a start but this cycle between increased productivity and increased wages is the classic economic cycle and doesn’t need the government to intervene.

5 I have no real knowledge of this as a truth or otherwise but it sounds doubtful to me. Most welfare in this country is directed at non workers, not low paid workers.

6 This one I believe, as it is a substitution of labour for capital but it is really at odds with number 4. However regardless of all that how does that help the low paid, now they have no jobs, which if you recall is the argument put forward by the employers, finally it seems both sides are in agreement.

7 In the immortal words of the Tui campaign Yeah Right. People don’t sell drugs to earn $13 an hour, there are different reasons people get involved but I don’t believe for a second they are going to give it up for a $13 an hour job, especially with those nasty bosses in number 4 finding ways to make you work harder all the time.

So I remain unconvinced to say the least. While government intervention in the employment market may be useful for eliminating the worst employment practices, such as low paid child labour, it seems to become increasingly doubtful in its usefulness the closer it moves into the centre of the bell curve of employer behaviour and potentially an infringement on the "right to work" at some times.

As an aside here is the history of the Mary Mary rhyme, have a look.  http://www.rhymes.org.uk/mary_mary_quite_contrary.htm