Recent comments by Paula Bennett regarding introducing tipping to New Zealand are more revealing of National’s contempt for workers than most realise.
On 22 May, Bennett was reported as promoting tipping for reasons that – on the face of it – sound reasonable, but are questionable;
“ If you receive excellent service, you should tip. I don’t think that tipping should be mandatory in New Zealand, but I do think that we shouldn’t tell people not to tip when they come here, which we did for a while.People will enjoy their work more and get paid more – it’s plus plus plus.I don’t want us to turn into that mandatory tipping for people just to survive, but I do think if we reward good service it’s going to make everyone smile a bit more.”
“Smile a bit more”? “People will enjoy their work more”?
Perhaps in Bennett’s narrow world, hermetically-sealed in Parliament with her ministerial salary; perks; golden superannuation; and tax-payer-funded housing.
To put Bennett’s comments into some context, in March 2012 NZ Herald journalist, Fran O’Sullivan gave us a glimpse of her privileged life;
My sense is that Bennett always knew how to work the system to her advantage – and good for her. Let’s face it, at the time she went on to the domestic purposes benefit in 1986, knowing how to rort the system was a national sport.
At just 17, she gave birth to her only child, a daughter she named Ana. Just two years later, she got a Housing Corporation loan to buy a $56,000 house in Taupo. All of this while on the domestic purposes benefit.
Bennett was also fortunate in getting a training allowance to go to university when her daughter was 8. Her backstory suggests that she was still on a benefit while studying.
The Training Incentive Allowance that paid for Bennett’s university education meant she was not lumbered with any of the $15 billion debt that 728,000 other Kiwi students are now facing. Her tertiary education was free.
This would not be a problem – except that one of Bennett’s first acts on becoming social welfare minister was to remove the same Training Incentive Allowance that she used to put herself through University;
Evidently, Bennett’s working life was “too exhausting” and she made a “career move” back onto the DPB;
“ Then I pretty much fell apart because I was exhausted. I went back on the DPB.”
In opting to chuck in her paid job and return to the DPB, she became an oft-parroted cliche that many on the Right – especially National/ACT supporters – often accuse welfare beneficiaries for.
From being an on-again-off-again beneficiary on the DPB, in 2005 Bennett became a beneficiary of the Parliamentary Service and she entered Parliament on the National Party List.
Today, as Deputy PM, the tax-payer is responsible for meeting her $326,697 p.a. salary, plus free housing, and other perks.
It would be a fair guess that Bennett does not require tipping to make up her weekly pay packet, to meet the necessities of life that many other New Zealanders find challenging in the 21st Century;
In 2007 – and for the following five years – the former Dear Leader, John Key, constantly made eloquent speeches on raising the incomes of New Zealanders;
“We think Kiwis deserve higher wages and lower taxes during their working lives, as well as a good retirement.” – John Key, 27 May 2007
“We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.” – John Key, 29 January 2008
“We want to make New Zealand an attractive place for our children and grandchildren to live – including those who are currently living in Australia, the UK, or elsewhere. To stem that flow so we must ensure Kiwis can receive competitive after-tax wages in New Zealand.” – John Key, 6 September 2008
“I don’t want our talented young people leaving permanently for Australia, the US, Europe, or Asia, because they feel they have to go overseas to better themselves.” – John Key, 15 July 2009
“Science and innovation are important. They’re one of the keys to growing our economy, raising wages, and providing the world-class public services that Kiwi families need.” – John Key, 12 March 2010
“We will also continue our work to increase the incomes New Zealanders earn. That is a fundamental objective of our plan to build a stronger economy.” – John Key, 8 February 2011
“The driving goal of my Government is to build a more competitive and internationally-focused economy with less debt, more jobs and higher incomes.” – John Key, 21 December 2011
“We want to increase the level of earnings and the level of incomes of the average New Zealander and we think we have a quality product with which we can do that.” – John Key, 19 April 2012
Who would have thought that Key’s goal of raising wages would be achieved… with tips.
It speaks volumes about National’s disconnect with the working men and women of this country, that the best that our generously paid Deputy Prime Minister can come up with is that raising wages should be dependent on the largesse of others.
Is this the essence of National’s ambition for New Zealanders? That not only should we be tenants in our own country –
– but that we should be paid as such?
On 18 April, our new Dear Leader, Bill English announced a $2 billion pay increase for under paid care and support workers in the aged and residential care sector.
However, there appears to be a ‘fish hook’ in the much trumpeted announcement;
“ Cabinet today agreed to a $2 billion pay equity package to be delivered over the next five years to 55,000 care and support workers employed across the aged and residential care sector.”
The pay increase will be “delivered over the next five years“.
On 22 April I wrote to Health Minister Coleman asking, amongst other things;
” You state that the amount of $2 billion will be “delivered over five years” and increases will be implemented incrementally over an annual basis. If so, how will that incremental amount be determined?
… will the planned increases be inflation-adjusted, to prevent any increase being watered-down by inflation?”
To date, Minister Coleman’s office has put off replying, stating that his office was busy and “response times vary between 4 – 6 weeks but also depend on the Minister’s schedule and availability“. (More on this later.)
Perhaps aged and residential care sector workers should ask for tips in the meantime, from their clients?
According to the website Numbeo.com, New Zealand wages have not kept pace with our nearest neighbour;
Former Dear Leader Key’s grand ambition of matching Australia’s income levels have remained illusory.
In fact, despite heightened economic activity through immigration and the Christchurch re-build, wages have remained suppressed. As Head of Trade Me Jobs, Jeremy Wade, said in April this year;
“ We’re seeing small increases in average pay across growth industries such as Construction and Customer Service, but overall wages aren’t matching demand.
The number of roles advertised has exploded in recent months which in turn means that the average number of applications per role has dropped 13 per cent on this time last year. Job hunters can be more selective, which makes it harder to fill these roles.
Some employers have looked to immigration channels to address this shortage. Immigration alone won’t correct the shortfall, though it may be suppressing wage growth… ”
“Immigration… may be suppressing wage growth“.
There is no “may” about it. Immigration is suppressing wage growth. The simple laws of market supply & demand dictate that in times of “low” unemployment, wages will rise as the supply of workers does not meet demand.
This is not some marxist-leninist tenet. This is core doctrine of the Free Market;
The law of supply and demand is the theory explaining the interaction between the supply of a resource and the demand for that resource. The law of supply and demand defines the effect the availability of a particular product and the desire (or demand) for that product has on price. Generally, a low supply and a high demand increases price, and in contrast, the greater the supply and the lower the demand, the lower the price tends to fall.
The only way that the price of labour can be suppressed is to increase the supply of labour. National has opened the floodgates of immigration, increasing the number of workers, and hence the price of labour has remained suppressed (also incidentally fuelling increasing housing demand, ballooning prices, and construction in Auckland).
There is a grim irony at play here.
National has exploited high immigration to generate economic activity and National ministers continually boast to the electorate that they have boosted economic activity;
“ Despite the dairy sector continuing to be under pressure, other sectors are performing well and contributing to an overall solid rate of economic growth.” – Bill English
“ We are the fifth fastest growing economy last year in the developed world. That’s unexpected.” – Steven Joyce
“ That’s why the good economic growth we’re seeing with rising incomes and a record number of jobs available is the best way this Government can help New Zealanders. ” – Paula Bennett
“ The New Zealand economy is diverse and dynamic. Strong GDP and job growth, together with the impact of technology, is driving change in every sector.” – Simon Bridges
But the same immigration that has generated that economic “growth” has also suppressed wages. National’s exploitation of high immigration to pretend we have “high economic growth” may have worked. But the unintended consequence of suppressed wages is now starting to haunt them.
What to do, what to do?!
Enter Paula Bennett and her desperate plea for New Zealanders to tip each other.
Unfortunately, tipping each other is simply a band-aid over low wages. In the end, like a pyramid scheme, the money-go-round of tipping fails to generate long term wage increases and we are back at Square One: low paid jobs and no prospects for improvement.
To compensate for chronic low wages, Labour introduced Working for Families in 2004. This became a means by which the State subsidised businesses to ensure that working families had some measure of a livable income.
Bennett’s lame suggestion – tipping – does not even pretend to come close to Labour’s solution.
Perhaps that is because National are in a quandry; cut back immigration to raise wages? That would wind back economic growth. Increase immigration to boost economic growth – and have wages stagnate.
This is what results when a political party with the unearned reputation of being “good economic managers” is revealed to being a fraud. Their short-term, unsustainable, “sugar-hit” policies eventually catch up with them.
Here’s a tip for you, Paula; saying silly things in election year is not helpful.
Fairfax media: Deputy PM Paula Bennett calls for more tipping
NZ Herald: Bennett rejects ‘hypocrite’ claims
Scoop media: John Key – Speech to the Bluegreens Forum
Beehive: John Key – Speech from the Throne
Fairfax media: Key wants a high-wage NZ
NZ Herald: PM warns against Kiwis becoming ‘tenants’
Investopedia: Law Of Supply And Demand
Kapiti Coast Chamber of Commerce: Minister of Economic Development Announces New Economic Data Tool
Wikipedia: Working for Families
The New York Times: Why Tipping Is Wrong
The Huffington Post: 9 Reasons We Should Abolish Tipping, Once And For All
Wikipedia: Paula Bennett
The Standard: Tipping vs fair wages
Previous related blogposts
Hat-tip for above cartoon: Anthony Robbins
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