Big story out today about Air New Zealand and the rates they are paying their Chinese cabin crew. Shanghai based crew flying on the Shanghai-Auckland route, alongside NZ cabin crew, are being paid less than the NZ minimum wage.

This is nothing short of disgraceful and ANZ will get a deserved roasting in the media. Given that they are majority owned by the Government one can expect a serious review of policy.  But it raises some serious issues: where should the line be drawn?

What about staff working locally on the ground? I would say they are in a local designation and so should be paid local rates but the cabin staff are working in an international space and should be paid the same rates as their NZ based counterparts.

Whilst this issue seems clear cut and a PR fiasco for ANZ, how the international labour market works is not so clear. We send manufacturing offshore, an issue that rankles with many,  in order to take advantage of cheaper labour and other costs. So one could argue that ANZ should be employing as many Chinese cabin staff as possible as their labour is cheaper.

One could also take the argument that working for ANZ is a great opportunity even with the local rates of pay and as the local Chinese airline market expands, as it surely will do, then pay levels will rise as competition kicks in.

The internationalisation of labour is going to bring some interesting issues to the surface as well as unexpected consequences. Previously we have had huge barriers to the movement of labour but with the EU expanding and both China and India developing huge domestic markets, the door will be opened wider to a freer and more efficient labour market.

We’ve had the polish plumber in London so how about the Chinese electrician in New Zealand.

As Ben says “welcome to the global village”.