MUST READ: How to end race and class inequalities destroying working people’s lives

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A recent study found that Maori had twice the mortality from various cancers than non-Maori.

This statistic is not new. I came across a similar finding in my notes from three decades ago. Cancer deaths twice that of Pakeha whilst medical interventions were half that of Pakeha.

So we have to take a long, hard look at why the system has failed Maori despite three decades of progress in certain areas. There has been a significant growth in professional and middle-class layers amongst Maori which is a good thing. There has been an expansion in Maori-run businesses and assets under Maori control that deliver services directly to Maori people.

Yet despite this progress Maori continue to die from preventable diseases at 2-3 times the rate for non-Maori.

What is clear is that other social and economic processes over the last three decades have served to undermine and reverse any progress that may have come from the changes at the top.

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Principally, this is the consequence of the anti-working class (and anti-Maori) policies of the late 1980s and early 1990s that destroyed collective working class organisations and drove a large proportion of the working class (and again disproportionately Maori) into poverty wages and insecure work.

Prior to this recession, Maori and Pacifica had higher labour force participation rates than did Pakeha.

New Zealand went through a period of economic restructuring that radically transformed the way we worked during a six-year period starting with the second-term of the Labour Government following the sharemarket crash of 1987 and then continued in the first term of the National government until 1993. This embedded a so-called free-market orthodoxy that said the market was always right and the pursuit of profit a god-given endeavour we would all benefit from – eventually.

Unemployment went from 4% to 11% overall and was 25-30% for Maori and Pacifica communities. Unemployment was the weapon the bosses deliberately used to break workers willingness to resist. Wages were cut, welfare benefits were cut, health care and education were being turned into commodities to buy and sell. The country was encouraged to become debt slaves as well as wage slaves.

Full-time employment collapsed. In March 1986 the first year of the Household Labour Force Survey there were 1, 369,600 full-time jobs in the economy. This represented 54.1% of the working age population. By the September quarter of 1992 there were 1,174,500 full-time jobs representing 43.8% of the working age population – a loss of nearly 200,000 full-time jobs which was equivalent to 10% of the working age population.

It was worse for men. Male full-time employment fell from 73.1% of the male working age population to 57.4%. In absolute terms male full-time employment didn’t pass the 1986 number until the December quarter 2001 when it reached 909,000 but at 63% of the male working-age population it was still 10 percent below the numbers for 1986. At the end of 2020 it was only 64%.

Families were forced apart as it became impossible for men or women to support families on a single income. Both partners needed to work in multiple part-time jobs to make ends meet. Many made the practical choice to live apart and one claim the sole-parent benefit and live in a separate household. Loving parents had to avoid the spying eyes of the government-paid or volunteer peeping-toms who watched out for too many overnight stays than was permissible. Special “hotlines” were created which allowed anonymous complaints to be made which were then aggressively investigated by WINZ.

The reactionary moral crusaders against the growth in the numbers of solo-parents in the community were precisely the same people supporting the reactionary economic and social policies creating the unemployment that led to the breakdown in family life that fed the rise in numbers on benefits.

Employers used the fear of unemployment to go after the wages and conditions or workers and break the unions that stood in their way. Real wages were cut by about 25% and there was the additional loss of overtime rates and allowances for most workers.

Instead of secure work on union-negotiated agreements we had the flexibility we all wanted to choose the zero-hour contracts that mushroomed and became the dominant form of employment agreement in whole industries.

By far the biggest impact of the assault on full-time work was borne by Maori and Pacifica families.

Of course, to hide the crime that was being perpetrated Maori and Pacifica families were demonised for “choosing” to go on a benefit.

It was claimed the benefits were “too generous” and were cut by the 1990 National government from around 40% of the average wage to around 33% for the adult unemployment benefit. Their value compared to the average wage has been allowed to steadily decline for two decades since because it was only ever increased by the consumer price index rather than average wages like superannuation has been.

The 1992 benefit cuts were worth approximately $1.3 billion – about the same size of each of the tax cuts handed out in 1996 and 1998.

An explosion of poverty was an inevitable and foreseeable consequence. Prior to the cuts in 1991 around 25% of children in beneficiary families were identified as poor in the Household Economic Survey. That rose to 75% post cuts and hasn’t changed much since.

Since the current Labour government was formed three years ago there has been a $25 a week one-off increase and two annual increases matching inflation rather than the Consumer Price Index (CPI). The value of a main unemployment benefit is still only 19% of the average wage – under half its value from before the cuts by National in 1990 and then maintained by labour because it kept the National policy of only increasing benefits by the CPI during the 1999-2008 Labour government.

In addition, housing has doubled as a percentage of people’s expenditure because nothing has been done to reign in the housing market speculation by both governments over these decades as well.

To make matters worse, a vindictive and punitive culture was imposed on WINZ in the mid 2000s by the previous Labour government that led to a halving in the percentage of unemployed people accessing benefits. Many genuinely unemployed people were forced to try and survive with no income at all and rely on friends and family, rather than face ritual humiliation, belittling and bullying from caseworkers. This can be demonstrated by the following data from the Household Labour Force Survey which started in 1986.

The Household Labour Force Survey measures the number of people officially unemployed, as well as a broader number of people who are “jobless”.

Between 1990 and 2003 the number of people on benefits never dropped below 64% of the jobless number. Over the next decade, it dropped to only 18% of the “jobless” number. It also went from 120% of the official unemployed number to only 45% in 2013.

The end result is that since the late 1990s the percentage of working age adults receiving a benefit has been reduced from 13% to 8% of the working age population while the average unemployment rate has only fallen from around eight to six percent.

Getting that 3% of the working age population (about 110,000 people) off benefits essentially has just removed about a billion dollars a year from working class communities.

It is reflected in overcrowded homes, people living in garages or on the street, kids staying at home longer, poor health, poor nutrition.

The fact that Labour and National conspired to reduce the relative value of the benefit and restrict access to it while housing costs are allowed to skyrocket is the explanation for the current crisis in homelessness and escalating number on social housing waiting lists.

Benefits must be radically increased in value and individualised in terms of legal access so families aren’t penalised for staying together which seems to be the policy design at present.

Social housing build rates need to be doubled and then doubled again to at least 10,000 a year until everyone who needs a home at an affordable rent is able to access one.

Feeding an out of control housing market with cheap money for speculators is the opposite of such a policy. Inequality and homelessness are being bred by giving virtually unlimited free money to the banks with no control over how they use it.

Again, it is Maori and Pacifica that will be left behind even further because they have the weakest rates of home ownership.

What this all demonstrates in my view is that affirmative action, especially measures to create space at the top of society which are fully justified, are not enough to end inequality and oppression.

We need measures that lift all working people together. A good example and a good start would be increasing the minimum wage to a living wage.

ll Maori and Pacifica can benefit from a radical increase in social housing but we need additional mechanisms that empower Maori, in particular, to have access to capital and resources to collectively tackle the needs of their own communities.

These principally have to do with measures that lift all those at the bottom up much faster than has been happening so far. But people at the bottom need power to make sure that happens.

That means restoring working-class power through unions that exist and that need to be built or rebuilt for the new working class emerging in the gig economy. And because Maori and Pacifica are disproportionately represented in those layers of the class they will rightly benefit disproportionatelyfrom any uplift for the class as a whole.

15 COMMENTS

  1. Thanks for such a clear and concise encapsulation of all that has been wrong with Neo-Liberal governments of the past 40 or so years

  2. I am unemployed and cannot see a point in getting a job because I see rich homeowners earning hundreds of thousands tax free for doing nothing. I am living with my friend, on benefits and have no real future. I have given up hope of buying my own home. I am a qualified electrician but what is the point of working if it gets me absolutely nowhere? I might as well just do nothing and go nowhere because if I work I still won’t be able to afford a home. I give up. I truly thought things would get better under Jacinda, how wrong was I?

    • Unemployed mechanic here, in the same boat. What’s the point in working long stressful hours getting covered in filth, and have to spend thousands on tools, just to maybe have enough at the end of each week to pay rent, utilities, insurance, food, vehicle, fuel and have nothing left over to save for a house deposit. Especially with interest rates being so low its does not help with saving.
      I’m on a benefit and live with family. Given up back breaking work for nothing.

      • If you are genuine posters, “Give up” and “Rusty” commiserations. I say “if” because
        a) you cannot live on current benefit levels, only exist at best
        b) benefits are not static, as in “go on a benefit and stay on it” there is constant cage rattling and harassment from MSD–to report in, attend pointless meetings, reviews of work ready status, requests for previously supplied and “lost” documents, debts established, sanctions, cut offs, stand downs. It is a full time worry fest trying to stay on job seeker allowance, with a phone with minutes on it, all for a miserable unliveable amount.

        Anyway, I know a guy who spreads Fert on farms, 5 trucks, several million dollar turnover. But after all the COFs, truck maintenance, hugely expensive tyres, consumables and product, accountancy etc etc. he has enough to pay staff wages on time, and keep his family in a reasonable provincial lifestyle but nothing fancy. He was a home owner when rural was cheap, otherwise he might not bother either.

    • @I give up and Rusty Pickup, the problem is that wages have stagnated in NZ while most essentials have gone up.

      Not just housing where people can get government subsidies, but also food – Kiwifruit is $9 kg in supermarkets – basic items like sunblock in NZ are $18 when in OZ they are nearly half the price. Power and water keep going up for consumers, while corporates like Rio Tinto energy is subsidised in NZ and water permits given away for free like candy by bovine councils.

      Price fixing and monopolies in NZ are rampant and the government turns a blind eye because they don’t want to ‘upset’ business and seek to protect rich listers and oligarch interests in NZ, hiding within corporations brand names. Now we are at the point where unlimited amounts of money are going on wage subsidies (not paid to employees but to their business owners) and lobbied industries like the film industry.

      Meanwhile workers made redundant in NZ, have still no minimum redundancy payments and ERA is not fit for purpose in terms of representing all workers in NZ and unlike other government departments (tenancy tribal, disputes tribunal) does not resolve disputes quickly at minimum cost. All this has led to massive labour fraud in NZ by corporates and business owners, where saving money on labour has become a dark art for rich business owners and their representative to exploit, across the board.

      We are now getting qualified people in NZ who after being exploited again and again by loopholes around employment in NZ are giving up.

      Someone posted a while ago about being made redundant 3 times in the forestry industry (using the popular ‘contractor’ method), and now just will not work in it anymore. Bus drivers post about how it’s a last report job https://www.stuff.co.nz/national/115060711/driving-a-bus-used-to-be-a-career-now-its-a-last-resort-job

      NZ’s industry with government stupidity and lack of policy has led to morally corrupt fat cats cannibalising their own industries while the government makes it worse by giving industry more subsidies and bringing in fresh migrant blood to exploit (who often become exploiters themselves) while the rest of the taxpayers pay more subsidies for migrant health care, superannuation and schooling and other vast costs that have not been measured like costs to the justice system and all systems in NZ.

  3. The labour experiments in NZ from the last 3 decades have been a disaster in terms of social costs and society.

    Golbal billionaires are increasingly able to walk into towns anywhere in the world and impose their will using unlimited legal means to avoid any accountability.

    When a Chinese billionaire bought one of Britain’s most prestigious golf clubs in 2015, dentists and estate agents were confronted with the unsentimental force of globalised capital
    https://www.theguardian.com/news/2021/mar/02/wentworth-golf-club-reignwood-yan-bin

    Not working in NZ either! Two tier justice.

    Charges dropped against Russian billionaire as prolonged and bizarre drink-driving case comes to an end
    https://www.nzherald.co.nz/nz/charges-dropped-against-russian-billionaire-as-prolonged-and-bizarre-drink-driving-case-comes-to-an-end/QSY6PSQ4FYV565BR4NZPNV2WV4/

    Note in NZ there are always ‘high profile’ Kiwi’s fronting these organisations and helping the rot!

    Mainzeal failed while parent made billions
    https://www.newsroom.co.nz/mainzeal-failed-while-parent-made-billions
    (The only reason there was even this case was because a litigation firm took the case because there was millions of dollars involved to try and recover, NOT because the government and regulators were prepared to do anything about executives defrauding the employees, contractors, subcontractors and shareholders by transferring value to another entity for their own gain.)

  4. Excellent summary Mike. Should be required reading for all the wankers at MSD, including Minister Sepuloni and PSA members who unfortunately are among those that sadistically degrade and deny support to vulnerable people. Time for the PSA to educate its delegates too.

    I remember the detail of much of what you describe as I was there at that time, and helped organise against many of those developments, marched and rallied, put out publications etc. Keep on keeping on is the message, the working class only has organisation to defend and advance itself.

  5. One criticism of the Capital Gains tax is that it is hard to administer and make equitable.
    all right, how about this?
    Scrap the Capital Gains tax idea and simply have a wealth tax.
    Here is my idea( it is hardly original).
    IRD estimates people’s wealth from income and assets. If they do not have any assets and low income they pay a low tax rate(or no tax at all). If they have say over $1,000,000 then they pay ten cents in the dollar and provide $100,000 in tax revenue. They still have $900,000 left so they are certainly not going to be hungry and homeless.
    It will be obvious that these are figures off the top of my head and that I am an not an economist. Yet here is a phrase from a very well known economist that I am sure will support my idea.
    ‘The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.’
    “The Father of Capitalism’ Adam Smith

    • Generally any hypothetical wealth tax rate is around 1% or so and replaces income tax. It is not feasible to tax on wealth in addition to income tax. In a country with inflated property values there will need to be exemptions in place to protect people on fixed incomes e.g. retirees who own $1M+ homes but have little or no liquid assets and don’t want to sell up and move (or rent) to pay a wealth tax having paid income tax for 50+ years.

  6. When a raft of ills invades one’s life and then those ills just get iller we get sick.
    The banks trade in ills. They spread societal disease like fleas spread the plague. There’s nothing quite like anxiety to put a toxic spring in ones step and as we spring about to the tunes the banksters play we’re already done for because we’re playing a game we can never win. If I believed in such things I’d say we were in Hell. We’re playing unwinnable games forced upon us by undefeatable enemies. ( There appears to be no such word as undefeatable so fuck it. I’ve now invented it so there it now is. Thus Raspberries ! ) An avalanche of good things must surely now befall us. Peace, for example? Happiness? Joyfulness? That’s a nice one. A sense of harmony? A long and enduring period of sameness? Last years rates are the same as this years? Electricity costs the same now as it did ten years ago? I built my home out of natural materials and it’s served us well for generations and it looks better as it gets older? How about that?
    The reason why we’re fucked and getting more fuckeder is because of the banks. They own you. They’re your masters. You’re their bitches. They know that and they love that and the more you struggle… they more they get their stiffies.
    Gutless, pasty, limp-cock rnz
    “Latest Covid-19 alert levels change to cost economy $240 million – ASB economists”
    https://www.rnz.co.nz/news/business/437408/latest-covid-19-alert-levels-change-to-cost-economy-240-million-asb-economists
    Was it a year ago? It was revealed that the four foreign banks stole $6 BILLION dollars from our economy in NET profit?
    I say, lets start saving money and endow ourselves with joy then and ransack the bankster.

  7. Treen-ji, Rogernomics was an undeclared war on the poor, which is to say, Maori.

    Roge still thinks he’s in the tradition of his social democratic ancestors. Such a dim dim man. Him, Thatcher and Reagan were all as dim as it gets.

    • It’s true they were all stupid, conceited, arrogant puppets totally up themselves. But the damage they did!

  8. I gave ten years of my work life to Fonterra and in that time earned a tenth of what Chris Luxton received in his last year as CEO of that other failure, Air NZ. It is not what you know or how hard you work in this world, it depends on your privilege and connection, and entitled thought leaders such as Luxton are part of the problem of class divide. We can’t expect his mate Jacinda to help with legislative governance either, Bernard Hickey wrote this week (Hickey, 2021) that an estimated half a trillion dollars of housing capital gains will have gone untaxed during two terms of Labour’s inaction, essentially providing cover for this ponzy scheme instead of spreading wealth and risk. This isn’t ethical, prudent or justified, it’s bloody negligent, bordering on criminal.

    Hickey, B. (2021). New Zealand’s economy is a housing market with bits tacked on. Retrieved from
    https://www.stuff.co.nz/business/opinion-analysis/124385961/new-zealands-economy-is-a-housing-market-with-bits-tacked-on

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