How to end race and class inequalities destroying working people’s lives in NZ

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.

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.