Mahatma Ghandi said the true measure of any society is its treatment of its most vulnerable members. Others say inequality is the measure of fairness in society. The massive levels of inequality in modern capitalist societies reflect badly by any measure. Egalitarian New Zealand is a myth.
Poverty was talked up as a big issue in the recent general election, and rightfully so. UNICEF say almost 300,000 New Zealand children are living under the poverty line. Many of them are from families where one or both parents are in employment. Those not employed are forced to literally live on the breadline.
Last week the media featured the story of Lynlie Beazley, “the face of poverty in New Zealand”. After her fixed costs are met, Lynlie has just $22 a week to live on. That’s enough to buy her two bottles of milk, two loaves of bread and a tray of eggs to last the week. Otherwise she relies on food parcels from the Salvation Army, smokes other people’s discarded cigarette butts, wears discarded clothes, the shoes of the homeless. It’s been two years since Lynlie has been able to afford fresh fruit. Lynlie was one of more than 10,555 individuals the Salvation Army supported with food parcels between April and June this year alone.
Researchers such as Phillipa Howden-Chapman, Professor of Public Health at the University of Otago, say the most pronounced indicator of social inequality in NZ is growth in income inequality. Income disparity is driving disparity in social and health outcomes. People living in poverty have reduced life expectancy, fewer life chances than their wealthier counterparts, they’re forced to scrimp on food, on trips to the doctor, they’re more likely to live in cold and damp housing. According to Treasury 30% of households with dependents earned less than the living wage, currently $20.20ph. When the minimum wage is $15.75 an hour, or $630 for a 40 hour working week, and not enough to live on, poverty is regulated for by the state.
But if Lynlie Beazley, an unemployed, brown woman, is the face of poverty, at the extreme opposite end of the spectrum is Theo Spierings, an icon of obscene earning. As CEO of NZ dairy giant Fonterra, Mr Spierings this year has received a 78.5% pay rise on last year, bringing his total remuneration package to $8.3million. That’s $16,000 per week or more than $1 a second. He gets paid 200 times the pay of Fonterra’s lowest paid workers.
Spierings’ astronomical pay and pay rise leads to questions about value for money for the cooperative dairy company’s shareholders, as well as the nature of income inequality in modern capitalist society. Dr Lynley Tulloch observes that Spierings’ “humungous salary seems incongruous with recent stories of farmer debt, suicide and struggle”. Fonterra’s full year profit was $100million less than in the previous year, in 2015 more than 700 staff were laid off, butter prices rose 11% in August this year to a record high of $5.39 a block. Basic Fonterra commodities like milk and butter are unaffordable to the working and unemployed poor. Agricultural debt has risen over $60billion in the last few years, externalised costs on receiving environments and animal welfare go unmet. How sustainable can Spierings’ pay rate be?
But while Spierings’ pay is incongruous with the plaintive cries we hear about ‘poor farmers’ any time there’s a low global dairy return, and even though he is the highest paid CEO in the country, the scale of his pay isn’t out of keeping with other corporate CEOs here and overseas.
The average pay for CEOs in NZ is over $1million. The 2015 average NZ worker’s income on the other hand, was $57,117. Five other Fonterra staff ‘earn’ more than $1million per annum. 200 earn $500,000 to a $1million. SkyCity’s Chief Executive Nigel Morrison earns $6.4million a year. Fletcher Buildings’ Mark Adamson took home $4.7million until he was unusually sacked for poor performance. The Chief Executive of The Warehouse, Nick Grayson earns $1.4million per annum in his standard salary, and took home an addition of $700,000. Grayson makes more in two weeks what a shop floor worker makes in a year.
There’s no evidence that these CEOs are worth that much more than the floor level workers. I’ve never understood why people doing the worst jobs are also paid the lowest wages. The cleaner’s role is no less important than the manager’s. Economist Max Rashbrooke observes that CEOs are paid considerably more than they were a generation ago, but it’s not proven that they’re more effective. According to international studies, there’s no link between high pay for CEOs and company performance. Professor Tim Hazeldine of the University of Auckland, agrees that growth in remuneration is unrelated to the growth of the company.
Excessive pay rates for CEOs in particular, are justified by ‘international benchmarking’ against comparable Australasian and international companies. “Independent” remuneration advisors help shape wage rates and rises, but grouping pay rates into quartiles and deciles tends to become inflationary, creating a natural wage ‘escalator’ effect, knocking rates up ever higher. The International Labour Organisation’s Global Wage Report 2016/17 says that in most countries, salary bands exhibit a gradual climb across the deciles, until the top ranges where there’s a big jump, especially to the top 1%.
The authors of the report looking at wage inequality in the workplace, found that some wage inequality reflects worker’s individual and productive characteristics, but wage inequality also reflects gender, enterprise size, type of contract and sector. It’s no coincidence that there are fewer women and people of colour the higher up the salary and power ladder you go. On average, men have the highest salaries overall.
Rising CEO wages and growing wage inequality are proof that the promised trickle down of wealth in a growing economy fails to occur. More accurately, wealth rushes up. The pay packets of NZ’s largest company CEOs grew three times that of general workers. ‘Closing the Gap’, a NZ based income equality project, says that CEO pay has risen by 85% in recent decades, compared with 13.5% for regular employees.
Helen Roberts, accounting lecturer at the University of Otago says CEOs earn 15 times the typical worker’s pay. But it’s not just in the private sector that obscene pay rates and income disparity apply either. State sector bosses earn at least five times the pay of regular employees.
Though not of the dizzying heights of the private sector, the chief of the NZ Superannuation Fund was paid $950,000, the CEO of ACC was paid $810,000, of the State Services Commission, $760,000, and so on.
The highest paid employee at the Auckland District Health Board, earned over $1.5million, compared with registered nurses who earn between $22 and $32 an hour, or maximum $69,000 per annum.
Bryan Bruce also makes the point about growing disparity between other members of the public sector, namely parliamentarians and public servants. This year, new and returning MPs are due for a pay rise on previous rates. The Prime Minister’s new pay rate is $471,049 per annum or $9058 a week. The leader of the opposition will take home $296,007 a year, or almost $6000 a week. Backbenchers will be paid $163,961 a year. Bryan Bruce compares this with the top pay scale for teachers at $78,000 per annum, whereas back in 1979, backbenchers and teachers were paid the same.
Add to these injustices, the pay rates for sports(men). Kiwi Steven Adams has a projected income of $35million for playing basketball. Scott Dixon, Indy Car driver, earned $11million last year. Dan Carter is paid $2.7million for playing rugby. Some All Blacks are now earning $1million a year.
Public opinion surveys have found that up to 72% of New Zealanders believe wealth is deserved and legitimate. Even excessive wealth is seen as derived from individual talent and benefits, “people deserve the massive pay they receive because they’ve earned it”. Max Rashbrooke says we’ve become more tolerant of inequality. He says acceptance of inequality is a cultural phenomenon. He refers to Japan where the CEOs of huge companies would never be paid the sort of excesses paid here.
But in the face of Theo Spierings’ latest pay rise, some within New Zealand society, including farmers, expressed concern. Winston Peters called for ‘Say on Pay’ rules so shareholders get input to management pay rates. ‘Say on Pay’ schemes overseas have led to greater transparency – apparently the CEO of BP had his pay rate cut by 40% as a result. In Portland, Oregon, publicly traded companies are required to pay a surtax when CEOs earn more than 100 times the median of company workers. Higher tax rates for higher salaries can also contribute to the redistribution of disproportionate pay. But even though the minimum pay rate is as low as is tolerable, and still it’s not enough to live on, there’s never any real momentum behind reining in obscene pay excesses with a maximum pay rate at the other extreme.
Felicity Caird from the NZ Institute of Directors Governance Leadership Centre, warns that excessive pay “…can erode public trust and confidence”. Britain’s High Pay Commission warns that pay inequality “undermines employee motivation, damages public trust, widens the gap between the haves and have nots, and leads to political instability”. British Prime Minister Theresa May says “peoples’ faith in capitalism is at stake”. Here, Professional Director Michael Stiassny, says the corporate world has a responsibility to ensure corporate excesses don’t occur. “We must come to a debate about what’s fair remuneration for CEOs compared with the minimum wage paid to workers”. “There will need to be some rebalancing” to avoid widespread marginalisation, manifest in reactions like Brexit and the election of Donald Trump. Pay excesses have got so extreme that even the legitimacy of capitalism is in question.
So despite the myth of egalitarian New Zealand, income inequality perpetuates gender, race and class exclusion. In a world of scarce resources, extremes of wealth and poverty are two sides of the same coin. The rich get richer and the poor walk in homeless peoples’ shoes.
The shame is that “egalitarian NZ” is not a myth in that it did exist not long ago. It’s taken only a generation from the sublime to the ridiculous.
D J S
Never existed. Things have gotten worse via govt support, health care and housing for the working poor and poor.
Cuts and ignoring inflation and the economic monopoly .
Egalitarian still exists in our manners, like a ghost cough from a long ago cold.
But, but, but Fran O’Sullivan disagrees with you and she believes her word is gospel and has attacked Winston for agreeing with you.
Fran is a shill for the uber classes. Lets quickly examine a couple of issues around this.
First: Theo and Sate sector bosses may theoretically be worth this ridiculous rate of pay, I dont know of any methodology to line up their results with pay. In a commercial operation you are responsible for income so if you can generate more and diminish costs you could possibly enumerate your value. In a government operation such a connect is impossible as you get the income from the taxpayer, ergo state sector bosses control only costs and expenditure. To me that is worth bugger all, any reasonable manager can do that. As a business savvy person I very much doubt that Theo is worth very much, I cannot see that a CEO of a government department is worth $600K.
Second: Two lots of people are ill served by Theos salary…..first the shareholders, that is money out of their pockets. More fool them, I have no sympathy. Second the taxpayer…..at 33% MINUS all the avoidance vehicles the man pays on a comparative basis less than his share. In any normal country he would be on an effective rate of 3 or 4 times as much. We society, and all the things we pay tax for, he can use. I think he might pay (a lot) more.
Thanks Christine
It is such a pity that the majority of New Zealanders love to be down trodden by hundreds of wealthy misfits such Theo Spiering.
They like to be ripped off too, by Foreign Banks. Faulty Chinese Steel Mongrels. Over priced food such as Butter, Cheese, Milk, Vegetables.
New Zealanders get wonderful warm feelings when they pay those louts of LandLords who push them into overpriced slums and poverty.
New Zealanders crave low wages. Knowing and applauding that the real wealth goes happily to the wealthy.
Why have New Zealanders not grown up and dealt to those who belittle and abuse them? Why WhY Why ?
Brilliant.
And why ? ,… because there is a whole community of big business donating to political party’s to legislate and lock in these conditions . It was / is a deliberate initiative by them ,… and speaking of initiative ,… let us focus a bit on the former Business Roundtable ,… now calling themselves the New Zealand Initiative.
And then lets read again the timeless and up to date relevance of the words of the late Hugh Price about who these scumbags are and how they operate in New Zealand.
This is where we find the answers to your questions:
New Right Fight – Who are the New Right?
http://www.newrightfight.co.nz/pageA.html
Corporations rule the world.
Corporations focus on what is good for corporations in the short term.
Governments act as facilitating agents for corporations.
Laws are written to protect corporations and give them increasing power over the lives of citizens.
The entire system is unsustainable and is progressing towards complete collapse.
Complete collapse will occur before 2030, largely as a consequence of corporations ruling the world.
Overpopulation and overconsumption -both dysfunctional aspects of the modern world- are major contributors to the predicament humanity finds itself in.
It is all unstoppable at this late stage, though ameliorating action COULD be taken.
The next government will make matters worse, whichever party leads it, because the foundations of society have been deceit and fraud for a very long time, and no politician will tackle ANYTHING that is fundamentally wrong. Cowardice and betrayal are the bywords of the age.
Pity the children (all of them), who are being lied to and robbed.
A study of History shows that unfortunately AFEWTHATKNOWTHETRUTH’S statements are accurate.The wealthy will not accept any cessation of their accumulation of wealth until the whole financial system blows up.Until then,”Let them eat cake” !!.Twelve years to get ready!
Corporations and C***TS are still running the world…..https://www.youtube.com/watch?v=monyiOsoKxg
Just a question for Afewknowthetruth. Whilst I admire your sagacity and agree with the message of what you have said over the past couple of years please don’t be offended by my asking why you keep extending your disaster timelines?
1. Peak Oil.
The work of numerous oil geologists around the year 2000 indicated western societies would be in dire straits with respect to oil supply from around 2015 on, as extraction rates went into decline. In practice, highly unsustainable methods of extraction which cause massive damage -such as done with Athabasca tar sands, and fracking etc.- have provided a short-term fix to the underlying petroleum predicament; in other words, the energy crash has been delayed by a few years; the most recent credible report I have seen on the matter indicates severe difficulty in meeting global demand for oil from 2020 on.
2. Climate chaos.
Around 2012 emeritus professor Guy McPherson and a few others were suggesting that sufficient feedback systems had been triggered for runaway warming to occur. In 2015 I challenged McPherson’s ‘analysis’ and discovered several defects in the ‘science’ he had presented.
3. Financial chaos.
Numerous analysis (Chris Martenson, Gerald Clelente, Charles Hugh Smith to name a few) were convinced the Ponzi financial system would topple before now; in practice, central banks depressed interest rates to close to zero, and kept printing money out of thin air; phony fiat money that has zero intrinsic value continued to be accepted globally and debt levels continued to rise.
What we have witnessed is a continuing decline in the standard of living since the 1970 as all the easy oil got squandered and the CO2 level in the atmosphere increased as a consequence of burning fossil fuels. We have witnessed decoupling of fiat currencies from gold, and in more recent times decoupling of financial bubble markets from reality.
Just how much longer the house of cards can be propped up via looting the Earths resources and polluting the environment (whilst expanding the population overshoot) is to some extent anyone’s, particularly in societies that are completely detached from reality and fed a continuous stream of propaganda by governments, councils and the bulk of the media. That said, we know for certain that all the fundamentals are being made rapidly worse, and when it all DOES finally blow to bits the meltdown will be much worse than if the meltdown had occurred at an earlier stage.
With no evidence to support contrary positions, I believe the ‘progressive’ decline we are witnessing will morph into the biggest discontinuity in human history around 2020, and that few systems people currently take for granted will exist by 2030.
I suggest anyone who is genuinely interested in the future read the following:
https://ourfiniteworld.com/2017/10/01/why-political-correctness-fails-why-what-we-know-for-sure-is-wrong-ex-religion/#more-42245
‘Conclusion
We are facing a battle against the laws of physics which we are unlikely to win. Our leaders would like us to think that it can be won quite easily, but it cannot be.’
I would go further than Gail and say were are engaged in a war with nature which were are losing, and the more we attempt to impose industrial systems on nature the faster we lose.
Needless to say, the vast majority of people living in industrial nations desire an increase in industrial activity (driving a car, or turning on a television, or getting food from a supermarket is considered and industrial activity, since any such aspect of living is dependent on consuming oil). And governments show an absolute determination to increase, rather than reduce, our energy dependency -which is bizarre beyond belief until you understand the Ponzi nature of the financial system!
Just a note on how farmer make money (as explained by an ex Fed Farmers man who knows).
1. You buy a farm at a multiple of its revenue. In NZ that is normally around 8 times. Your role is to survive and sell maybe 20 / 30 years hence.
2. Revenue is more important than profit…..all you need to do is to not make significant losses, any profit the taxman gobbles so dont pay tax, rather get the new tractor or ute. And live well. Whilst you are not paying tax remember everybody else is paying for your education, health, roading , pollution etc etc (you are a tax parasite if you do it right).
3. Invest in revenue, take a bank loan offset against tax etc to put more stock on…more revenue. More pollution you dont have to pay for……..
4. Sell. You have now been there 25 years and inflation means your purchase price is 3 times less than the current sale price. And as you have expanded revenue by 50 % the sale price relative to purchase is 4.5 times more. You walk away with the lot having had 25 years to pay the mortgage off…..and no capital gains.
Must say farmers are so hard done by, backbone of the country, regular honest citizens……
Modern agriculture is the conversion of the chemical energy in oil into food energy.
It naturally follows that as soon as the price of oil gets too high or the global extraction rate goes into terminal decline (absolutely certain to happen soon) the global food system will begin to fail.
Add to that the fact that ALL international trade is dependent on oil and contributes inordinately to degradation of the environment and we can easily see that present economic-social-political arrangements have NO LONG-TERM FUTURE. Indeed, it is difficult to conceive present economic-social-political arrangements lasting more than another 5 years.
https://medium.com/insurge-intelligence/brace-for-the-financial-crash-of-2018-b2f81f85686b
AFKTT, you are quite correct. I too have predicted this for decades, since I read Hubbard in geology classes in the 70s. The timing might not be as predictable as you imply, who knows, either way it will happen and with it will come the end of the fossil fueled industrial age.
Dairy farming is very energy intensive in its current format, I can foresee it going back to the local farm in wetter areas with dairy factories within a few kilometers. Fonterra, gone. The cows will diminish in number, and be replaced by sheep and cropping as it was formerly. We live in interesting times for those with a little vision.
The other interesting statistic is that many of the CEO’s are not New Zealander’s of the biggest ‘NZ’ branded companies.
Theo Spierings from Fonterra is Dutch.
Nick Grayson from The Warehouse is from the UK.
Both CEO’s have been bought in from overseas on huge salaries but ultimately when things go wrong there is no real worry for them – they can continue to go offshore to other high paid jobs leaving any messes from their leadership in NZ behind them and its the employees and taxpayers of NZ who pay the price for any failure.
I do not wish to contribute any more of my money to these greedy people, so I have decided to boycott their products – Anchor, De Winkel, Fresh ‘n Fruity, Mainland, Mammoth, Perfect Italiano, Piako, Primo, Symbio, and Tip Top. There are alternatives.
I would say if we don’t get off the Neo liberal track soon we will have problems in this country. This could include civil unrest or even revolution if things go far enough. The sign of trouble will be when the rich start seriously gating themselves in using electric fences etc. That will show they feel threatened.
Jono they have been gating themselves for ages in fact they have gone even further they now have their own islands and guess what right here in little old NZ.
Jesus! Brilliant Post @ Christine Rose.
@Observer Tokoroa asks above ; ” Why, why, why? ”
The psychology of ‘why’ people acquiesce to their abusers is a well studied and understood psychological phenomenon.
Read anything by Professor Stanley Milgram for example.
The information to change attitudes from subservience to revolution is freely available. All we need is a spark to light the fuse to the powder keg of our collective hate and desperation.
I know I keep banging on about Metiria Turei’s fate at the hands of a cadre of Machiavellian confederates who sent her packing after her candid revelations of how she survived, better perhaps than poor Lynlie Beazley does.
There! Right there! That was a spark that was doused to a fizzer.
And just out there in perhaps the Deep State @ Chris Trotter sometimes makes mention of, just out there, out of sight but always vigilant, they wait and watch, ready to pounce on any spark that threatens their status quo.
(I believe winston peters is the media face of that ever vigilant and what might be termed Watcher Class’ His modus operandi seems to be that whenever a ruckus too big to be contained by our corrupt MSM is unfolding, he rushes in yapping to find nary a rat for us to whack at. )
We desperately need a leader with big hairy metaphorical balls to banish our abusers.
Metiria was one such person and we instead chose to cringe.
The shame of it isn’t fuck face theo spierings for his unblinking, inhuman, eye watering greed. It’s ours, for our shameful lack of the ability to act to rid ourselves of the expensive wanker.
And those other fuckers! God almighty! ACC!
Hitting Back at Inequality
Perhaps we could attempt just two strategies initially:
1) Refuse to buy Fonterra cheese if it costs above ¢ents 0.50 a kilogram.
2) We demand of Parliament that no wage is legal unless it be $25 per hour minimum. Reviewed upwardly every 6 months. Any Business who defaults will face Court and heavy fines.
If a Business cannot afford to pay the legal wage it may borrow money at 21% from Work and Income.
Just as Businesses put up their prices to suit themselves, NZ Consumers must have the equal right to put up their wages accordingly.
For we are a Democracy not a Slavery.
We are told – admittedly by LIARS – that our Economy is strong. So a realistic rise in wages is absolutely appropriate. Also we know just how grossly our Businessmen are paid.
These rules do not apply to small family businesses – unless they employ staff.
NZers also need to change banks to a NZ bank the foreign banks are milking us I couldn’t wait to get away from Westpac they are greedy and quick to give your details to the government on a whim.
@ MICHELLE ! Now you’re talking.
Why the hell is our government using foreign owned westpac scum to do OUR citizen-like business? Who’s sweaty little palm did the grease?
FUCK THE BANKS !
Isn’t the average wage calculations overly affected by these over inflated salaries? Isn’t the median wage lower?
Steven Clifford on the David Packman Show had many good points –
here’s the link https://youtu.be/rj8zwaHwzJI
Also re hospitals – the essential non clinical staff have had pay and conditions (increase work loads due to the employee cap) drastically reduced while CEO pay was significantly increased 2 years ago. It’s important we do not always just mention nurses and doctors – these front-liners would be swamped without the work of booking clerks,etc.
Egalitarian New Zealand was always a myth really. It looked to be the case up until the late 70s/early 80s because egalitarianism was generally looked at from the Pakeha view – Most Pakehas were more or less equal in that their wealth, or lack of same, didn’t disqualify them from having a reasonable house, education or ability to access the public health service. In reality when the Maori world was included there was dark cloud of apathy, racism and cultural ignorance behind the facade. The cliche was that Maori didn’t want equality so why include them?
Come the 80s and Rogernomics the neo-liberals realised their dreams had come true and they could openly despise the ones that had less, Pakeha or Maori, revel in their self appointed celebrity and make sure the country never could revert to its painted on egalitarian legacy.
Now it has moved on to the point that nobody talks about people being equal any more. It is now assumed that we are not and that is the natural order of things now. When someone points out the miserable people who have missed out on all the good things they were promised, the reaction is to blame them. It is their fault for being poor as Victorian politicians always told themselves.
The biggest irony of all is that the wealthiest always proclaim themselves to be good Christians.
Good Christians?
Jesus Christ preached giving away everything, not hoarding wealth.
When is a person greedy?
When they think they don’t have enough.!!
When is a person truly poor?
When they have nothing to share.
What is the space in between?
Hate or love for a fellow man.
To: Country Boy
I enjoyed reading your Post !
We need to exercise our rights as human beings. We have been abused badly. Our Environment has been abused shockingly.
The only ones who can uplift the great majority of New Zealanders is we the people ourselves. We can do it by clawing back much higher wages; much better Housing; free Education.
Otherwise we will forever have soulless abusive “Paula Bennett” types dropping little bits of dog food in our mouths for decades to come.
Remember, Corporations, and the wealthy who “manage” them, come last in our society. As will the current Media. Way Way last.
6 million drawn from the degraded and destroyed ecosystems of Aotearoa
for one man’s Personal fortune.
Trickle down…..
A 78% pay rise for the average worker would put them on $101,668. That would be a big help but it would still mean Theo Spearings would only gouge 81 times the avearge worker instead of 145 times which is what he currently gets.
If dairy and therefore the nation is doing so well that he deserves 78% pay rise then what about the rest of us too.
General Strike for 78%.
It’s worse than that, check your maths; $8,300,000 per annum is over $159,000 per week. I often wonder how they justify this sort of income to themselves, how do they feel that they alone are worth the equivalent of, say, 170 teachers or nurses.
Maths Check
$8.3mill.pa divided by $57,000pa = 145 times the average annual wage
$57,000pa + 78% = $101,000pa
$8.3mill.pa divided by $101,000pa = 81 times the average annual wage.
$8.3mill per annum divided by 52 weeks = $159,000 per week for Speiring
What does he ‘do’ again?
Those who write the rules on the backs of pieces of toilet paper in business class haven’t changed the basic ingredients of the NZ pie’s division. Once it was divided more or less equitably, now more of it is given to the favoured few and less to the needing many. This becomes a gated community society where the strong eat fiercely and ferociously while the weak just survive if they’re lucky. You realise all theories exist in actuality only in the mind, don’t you!?
Most of us have become slaves in our own country and carry the weight of the wealthy on our collective backs.
We are living in a financial prison that has no walls but still holds most of us in with no means of escape.
I bet the farmers in Morrinsville don’t come out and protest loudly about Theo’s pay packet and have signs that call him a dirty capitalist.
We can’t have that can we !!!
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