SUSAN ST JOHN’S INDIGNATION at the way the Working For Families (WFF) payment has been cast as an employer subsidy is palpable. “Blaming WFF for low wages”, exclaims Susan “is a bit like pointing to our high rate of suicide and blaming it on the existence of the mental health services.” Neither is she slow to sheet home the “true cause of low wages”. This, she says, is to be found in “casualised hours, precarious employment, automation, globalised labour markets and falling wage share of output due to loss of union power.”
St John is scathing in her condemnation of the purveyors of what she regards as the “subsidy myth”. Matthew Hooton, Eric Crampton on the Right; Bryce Edwards on the Left; and “others”.
Well, among those “others” I must acknowledge myself. Until relatively recently, I, too, was convinced that WFF, by topping-up the manifestly inadequate wages paid to workers, acted as a multi-billion-dollar subsidy to the employing class. Instead of the bosses paying their workers a living wage, those workers were being kept afloat by the taxes paid by other workers. How could that be fair?
But then I found myself seated next to Susan at one of Laila Harré’s “salons” and was set straight on WFF in the most forthright fashion.
Where were the critics of WFF prepared to call a halt? Susan demanded. If this particular “subsidy” was torn away, why not the taxpayer-funded public education system? Or public health? Just imagine how much more the bosses would be required to pay their workers if their wages were to cover not only the additional costs associated with raising children, but also the cost of private education and private health insurance? And what about the roads and the electricity grid? What about the water supply? Or sewerage disposal? How high would wages have to be lifted if every man and woman in the country was required to pay for all this crucial infrastructure directly – rather than by means of taxation?
The fact of the matter, Susan informed me, is that the entire capitalist system is subsidised. The viability of the present economic system; the ability of every company – private or public – to return a profit to its shareholders; rests upon the willingness of the state to pick up the lion’s share of the costs of raising, educating and keeping healthy all those workers whose daily labours keep their employers in business.
It was not always so. In the very early years of capitalism workers were paid just enough to cover the cost of keeping a roof over their heads and food in their bellies – less if demand faltered or prices increased sharply. The contribution of the state was limited to providing the soldiers necessary to restore order if the capitalists’ workers, driven to utter desperation, rebelled; the courts in which the ringleaders could be convicted; and the prisons (or penal colonies) in which such miscreants could be safely immured.
It didn’t work. As industrial technology grew ever more sophisticated, the need for a well-educated workforce grew ever more urgent. Likewise, with workers’ health. Deadly diseases left gaping holes in the working population. Clean water, hygienic waste disposal, unadulterated food, safe housing: all of these improvements, supplied collectively via rates and taxes, were crucial to improving the quality of life of the working-class. They were no less important, however, in keeping the capitalists profitable. Assessed from the perspective of the long-suffering wage and salary earner, the whole edifice of industrial civilisation looks suspiciously like an employer subsidy!
Which is precisely Susan St John’s point. If what used to be called the social wage (education, health, basic infrastructure) had to be picked up by the bosses, then our society would very rapidly degenerate into something resembling early industrial Britain. The capitalists couldn’t pay their workers enough to cover the now non-existent social wage, so they wouldn’t. Human-beings would, wherever possible, be replaced by machines, and those without a stake in the new order of things would be left to starve in squalor.
And, yes, you’re right, what this all adds up to is the far-from-novel conclusion that capitalism is an economic system subsidised by the many to the inordinate advantage of the few. Working For Families is, therefore, a very long way from being the most egregious example of society picking up the tab for meeting at least some of the needs of its most vulnerable members. Suggesting that the bosses take over this responsibility is pointless: they have neither the means, nor the inclination, to do so.
And, no, you’re not wrong, capitalism is, indeed, a grossly exploitative and unjust system which only goes on working because the people who keep the wheels turning get up every morning and, well ….. keep the wheels turning.
One hundred years ago, working people understood this. Hell, they even sang about it:
They have taken untold millions that they never toiled to earn,
But without our brain an muscle not a single wheel could turn.
We can break their haughty power, gain our freedom, when we learn
That the union makes us strong.
Solidarity forever!
Solidarity forever!
Solidarity forever!
For the union makes us strong.
In 1991 the universal family tax benefits where abolished only to be slightly brought back by WFF because as it turns out is kiwis don’t really have the heart for feudalism after all, and in particular for those things we refer to now as business inputs. The argument and rational now is to not tax those things. So naturally when examining those things now the bases for tax is those things have got to be removed so the base there for is smaller. The GST on the other hand is larger and has been expanded to accommodate in part because of the run down of the lower tax brackets ability to collect taxes and other budget cutting exercises. And that means when one looks at the yields and of WFF and discounting the whole thing, there are now bigger gaps than there used to be. And the fiscal yield is smaller, or the budget responsibility rules means we have to look at compensation not just of public servants but of beneficiaries as well and of tax payers by shifting tax thresholds compensating the tax base, and leaving the door open to capital gains, fringe benefits, tax credits, WFF, audits and electronic payment systems ect by broadening the tax base.
Now that the cost of compensating the tax base or tax payers is greater because more income is being brought to tax. There fore more income has to be compensated. All of these things means that there isn’t enough surplus to cut income tax rates and there fore there is no savings in the renewed argument of low wage, WINZ discipline and soft core racism falls apart because the savers are basically people on higher incomes. So if the system doesn’t yield new money to compensate for the tax cuts to the top end of the tax system the savings point of course beaks down.
And another point I think beneficiary bashers have forgotten is the government has to compensate tax payers for more than they spend on GST and also compensate for which they save, so not an argument for discontinuing government kiwi saver contributions at all because that is for future consumption with which businesses can construct inputs around. So giving back more because returns have to be given back on savings as well. Now these are all things that apologists are trying to weakly walk away from after thumping there their keyboards committing to ill thought out, ill conceived keyboard worrying about woman’s vaginas and what might comes out. Instead of sitting down and saying The National Party took a defeat and couldn’t be bothered constructing a winning set of policies they said the coalition government has an $11 billion dollar fiscal hole and many many more billions and zillions of UN funded liabilities. They said the Coalition government went to election17 with no health policy, no employment policy, no defence policy, no education policy and a monetary policy that would grind the economy to a halt to cut inflation and elephants all over the room.
Instead of focusing on the issues and the ball, a party with no back bone and no ideas on day one after the newly formed government was focusing on Iwi vs kiwi and low level, low intellect, low grade power grabbing just to bash beneficiaries and to suggest that the National Party members, followers and media friends are the ones with all the ideas and to suggest that it’s the National Party that will magically cure the melting pot. And now the National Party minders are going to have to face the harsh realities of MMP polling arithmetic. And now we see the Leader of The National Party suggest that leaks of his spending habits didn’t come from inside his own party but he’s still trying to shift blame off the National party on to the public service basically taking the bitch route around because National Party minders just can’t face the facts, so National is already moving towards the idea the public service needs to be cut.
So embracing the ideas of The National parties benefit bashing and Iwi vs kiwi is the same as embracing lady death on the bases that The National Party are economically illiterate but should manage it all anyway. But don’t think that soft racism can be let off the hook and given fair treatment.
And Ms St John is 100% correct. History is replete with societies where it was every man/woman for him/herself. Those who “failed” were left behind in misery and poverty.
Ironically, this is one of the main reason so many British settlers departed the relative safety of their country; spent six months in a cramped, unsanitary, unsafe voyage in frail wooden ships eating food that our pets would turn away from – to found a new society.
It was the promise of a fairer society that drew them through perilous hazards on an unforegiving open sea (no satellite locator beacons to call for help back then!!) to a new, alien country.
Not all made it…
ref: https://teara.govt.nz/en/shipwrecks/print
It’s a shame we have no collective memory. Our wisdom would be more mature.
The state, without producing fiat money and leaving it to the banks to create our money supply as is the case at present, does not have a reservoir of funds to subsidise capitalism with. It can only recycle funds it takes out of the system through taxes. How is this so obvious fact so easily and frequently obfuscated ?
D J S
100% correct Frank, The education system does not teach accurately NZ history, so the new generation does not know the hardships and aspirations of our previous generations, they teach instead american history, a sick parody of history,little mention being made of workers struggles for civil and social rights, our children are meat for the machine
This seems to acknowledge that there might be a limit to what employers can pay somewhere out there.
What is a capitalist Chris? Is it the one who takes out a loan and sets up a business that employs workers, or is it the shareholder in the bank that advances the loan? I don’t think most NZ employers are “capitalists” at all. I think they are mostly on marginal profits and all the surplus goes to the financial sector who are the real “capitalists” now. They don’t take risks, they don’t get their hands dirty, and they don’t employ anyone. It’s a mug’s game.
But ignoring this , and pretending that the economy is just made of employers and employees; and also pretending that NZ is a closed economy rather than a tiny piece of a global economy: The system doesn’t work for anyone if there is no market for what workers make or do. So as the workers being numerous are the market then they have to have buying power or nothing can be sold. So ignoring the role of money and debt, overall what people contribute to production has to balance with what they consume of other people’s work product. Money is supposed to facilitate this balance.
So does it matter whether government takes less tax and legislates for compulsory unionism, and allows some belligerent unionists to secure a higher than balancing remuneration for workers in large essential industries but leave workers in local smaller organisations without any
clout, and let the employers and employees fight it out. Or whether unions are left to recruit where they have support from workers, and set taxes high enough to recycle some of it to the people and families who need it, leaving out those doing the same work but not having the same responsibilities . Also leaving the fighting out.
I approve of the recycling alternative.Looks like you approve of applying both systems together.
D J S
Those souls shackled to the wheel in ignorance leading distracted blunted lives. They are chained to the wheel (of fate) with chains of torment. The thing at the hub of the wheel is a spooling tentacled parasite that camouflages itself under the guise of the false god of democracy. It is a manifestation of the Demiurge. The spectral beast must be constantly monitored and often lashed and berated, and brought back into submission or beaten into hiding because it is a spooling parasite and it will take maximum advantage whenever it thinks it can. It may even attempt to replace humankind with the new servants it is authoring in dark corners right now. How does that all work for you and your families? Educate them on that trip.
The impact of globalisation and the wage arbitrage it puts in place is the real challenge. The left doesn’t seem to have much of an answer for this.
So why just stop at wff, lets bring in food stamps!.
Lets just keep on down this happy path.
The bosses get to make profit while we scramble around on the edges.
After all, the owners and ceo’s can’t be expected to take care of the Worker over the Shareholder.
Maybe we could all get the ubi or similar.
Because I’m sure the corporations will be just happy as to pay us that subsidy, after all, they are always big on paying taxes.
And Governments are always to be trusted to hand out benefits without conditions.
http://www.stuff.co.nz/national/politics/6876758/Beneficiary-contraception-plan-intrusive
Thanks Chris
Much criticism of WFF is uniformed and illogical. Most moderate lefts work hard to ensure there are safeguards and redistributive programmes to counter the hard edge of capitalism. I have been bewildered when the left support the right in their attempts to denigrate and undermine WFF. However, as I used to teach, the far left hate the welfare state because they believe if props up capitalism and delays the inevitable collapse. Goodness knows what is supposed to follow the collapse- one thing we can safely say is that it wont be pretty. Revolutions generally are not.
your thesis would hold if there had also been increases in wages – but there wasn’t..
so wff has been a subsidy for business…in place instead of wage rises..
and workers were left in a slightly more comfortable version of the poverty-traps inherent in the benefit system – earn more money and the system claws it back…
that both sucks and blows and disincentivises in the benefit system..and w.f.f. has the same strictures..
so we have the situation now where workers’ taxes are used to subsidise other workers..and the boss-class gets off scot free..
w.f.f. is giving that boss-class a free-ride..
and our low-wage/high-cost economy wheezes along…with a select few making out like bandits…and being subsidised by the many..
and that is seriously out of whack..
a universal basic income funded by a financial transaction tax is a solution..
can i ask why you are not asking/arguing for that – instead of supporting this bankrupt system..?
That would be part of a proper comprehensive overhaul. It’s way beyond the scope , the vision or the courage of any recent NZ government or imaginable one in the future. It won’t happen till the existing system collapses.
D J S
I have at times been part of the far left and have never hated the welfare state, what I have hated is the blocks put in the way of people accessing welfare. To prove you are poor whilst watching business/farmers/investors get paid by governments so they will trickle down profits is galling! To have to go in to try and get an emergency grant for tampons because you had to go to dentist is humiliating twenty ways to Sunday – then to see farmers getting benefits because they are asset rich and cash poor tend to turn your mind to business welfare as you know that as they are leaders of industry no one will ever make them beg! When Air NZ came to Government for money it was given now that they have crawled their way back where is the understanding that the people of NZ bailed them out. Where’s our $1000 bonus, where’s our planes to regions at a reasonable price? If you want to know why so many left wing people what capitalism to collapse its because the poorest pay every time for every bank failure, business failure and lots of times we pay with our lives but as soon as we pay the top of the tree give themselves a bonus and tell us we need to work harder
There are a few things that need remembering : .
Why was it that prior to the 1984 treason of Douglas and his neo liberalism , and prior to Ruth Richardson’s equally as treacherous Employment Contracts Act 1991, …. New Zealanders had no need for WFF ?
What changed ?
Ask yourself.
And I shall give you THIS :
New Right Fight – Who are the New Right?
http://www.newrightfight.co.nz/pageA.html
Wild katipo
Not true- prior to 1984 we had the family benefit and a raft of rebates for low income families. Richardson joined the weekly universal family benefit to the targeted family support payment. Families became really poor as benefits were cut and family assistance left to erode away. WFF just built on Family Support to address the shocking level of child poverty. The problem is he name changed and confused everyone
Yes but you are NOT looking at the raft of other things that neo liberalism brought in that negated much of the concessionary crumbs thrown at the working people of this country.
They were nothing more than an appeasement to prevent wide-scale unrest. And an unrest that they knew would certainly happen if they didn’t.
And Labour still bears the burden of allowing that to happen.
Chris Trotter himself has written about the PSA ( Public sector unions that squashed the private sector unions calls for a general nationwide rolling strike to defeat the ECA 1991 ).
What you are suggesting is the third way of politics.
And that falls far short of what we once had which was more akin to the Scandinavian’s – which most self respecting leftists endorse.
And that’s what I take offense at, – you are perpetuating a system that embeds neo liberalism instead of confronting it. I would suggest that in every war, every battle, every liberty that ever was hard won,… you take a damn good look at the sacrifices made… and NEVER was a victory won without energy, without diligence, without unity and without a sense of righteous purpose.
So I leave you with my Highland Scots Sept battle song :
The Clan Gunn.
The McGregors of the North.
The CLAN GUNN – YouTube
Video for the clan gunn song you tube▶ 4:35
https://www.youtube.com/watch?v=quxObY47ZPw
Aut Pax Aut Bellam
And fuckin proud of it.
I believe you are dealing in linguistic semantics, – sure the ‘ name changed ‘,… was that because of the realization that Labour had fucked up,… well,… they were about 25 years too late in apologizing, weren’t they?
So Helen Clarke tried to patch up the political capitol they / she knew they’d lost by selling out and not stopping Douglas or renouncing his treason’s, – and don’t lie, – we all know what Norman Kirk said to Douglas in the 1970’s…
”If you ever mention that again I will expel you from the Labour party”.
Why , Susan ,… WHY?
It was because Kirk was one of the last true Social Democrats we ever had, – THAT’S WHY.
Even Robert Muldoon was so far left by today’s standards he would find more in common with MANA than the Greens !
Thick about that !, – that’s how far we’ve traveled!!!
And people like you just try to smooth the waters just to give us all a ‘feel good’ bullshit placating sense of ‘we should be ever so grateful to these capitalist fucks’. I’m tempted to say fuck the hell off.
I wont.
You seem like a decent type.
But don’t you ever try to apologize or justify neo liberalism ever again. And their close cousins, – the third way Blairite / Clarke lies.
Just don’t.
Why?… because at least one of the former should be imprisoned for war crimes and mass murder ,- the other… needs to search their conscience about our foreshore and seabed legislation’s.
We are not so easily sold as we were in the 1980’s and 1990’s anymore.
The CLAN GUNN – YouTube
Video for the clan gunn song you tube▶ 4:35
https://www.youtube.com/watch?v=quxObY47ZPw
[ ” The problem is he name changed and confused everyone ” ]
And btw- Ruth Richardson is a ‘she’ ,… not a ‘ he’.
WK its just Orwellian double speak black is white, left is right, perpetual war and Big Brother is always watching you.
This is why i say governments around the world are using his book 1984 as a blueprint for population (Mind) Control, tho in a bit of Imperialist Capitalist rhetoric divide and concur easy.
And as for you , Bradbury ,… your plight for asking for more finances to propagate your blog, ie: leaving people who’s views agree with your own and not publishing those who oppose ,- reminds me of this :
The drunk Scotsman (lyrics) – YouTube
YouTube ·
Yeah here you go:
The drunk Scotsman (lyrics) – YouTube
Video for the drunk scotsman youtube▶ 2:28
https://www.youtube.com/watch?v=MZ35SOU9HTM
Now get real and get a sense of reality about you all.
FFS.
Comments are closed.