CTU Economic Bulletin
Is the recession over? We're on the way, many economists say. The government gives mixed messages - John Key emphasises things are improving; Bill English that the economy is still fragile.
The Tax Working Group (TWG) report which was made public this month has been widely discussed. There are some positive aspects of its recommendations, and some disappointments.
To begin with the disappointments: it limited its view of the taxation system largely to its revenue gathering purpose. Yet there are other purposes for the taxation system, notably to redistribute income in an unequal society. Given the substantial rise in inequality and poverty in New Zealand, particularly over the 1980's and 90's, this review was an ideal opportunity to look for ways to use the taxation system for this important social purpose - what is called a progressive tax system.
There is considerable evidence that union members get better pay than non-unionists because of their coverage by collective agreements.
One survey of over a thousand studies of the economic effects of unions and collective bargaining in 2002 found that "Union members and other workers covered by collective agreements in industrial as well as in developing countries do, on average, get a wage markup over their nonunionized (or uncovered) counterparts." The survey found other benefits as well: for example collective bargaining and high union density reduced income inequality.1