Thursday, February 16, 2006

Class warfare in New Zealand

Matt McCarten's speech to the SuperSizeMyPay rally over the weekend contained some startling comparisons between the New Zealand of twenty years ago and the New Zealand of today:

A lowest full time worker got $510 a week. Now it’s $380. A drop of $130. That’s 25% less. The lowest hourly rate paid was $13.10 an hour. Now its $9.50. A drop of $3.60 each hour worked. That’s 28% less. Any overtime was paid $19.65 for the first three hours and then it was $26.20 after that. Now it’s just a flat rate of $9.50. That’s over $10 an hour difference. A 50% drop... What does this mean to us now? Well, take a fulltime worker on 40 hours a week Wednesday to Sunday. This person got $782 a week. That’s $40,665 a year. For the same hours this person gets $380 a week today. That’s less than $20,000 a year. Less than half than they used to get. Take a part time worker working 5 hours a day, Wednesday to Sunday. They used to get $426. Now it’s $238. A 44% drop. Finally take a 17 year old working in the weekends for 10 hours. They used to get $181. Now they get $76. A difference of $115 for the same hours and a 58% cut.

Meanwhile, over that same period, and despite a long period of stagnation in the late 80's and for most of the 90's, real GDP increased 69%. I guess that that rising tide didn't lift everyone's boat. In fact, it only seemed to lift the boats of the rich. Up until the election of the Labour-Alliance government in 1999, everyone else was lucky simply to hold their ground, and despite the introduction of a more progressive tax regime we are still only just beginning to see the reversal of the trend towards greater inequality.

This shows the true nature of the neo-liberal "reforms" - they were nothing less than the organised robbery of those at the bottom (and in the middle) of the heap by those at the top. Oh, it wasn't done with anything so crass as physical violence - instead it was done with public policy, with tax cuts, mass unemployment, and the Employment Contracts Act - but it was robbery nonetheless. The policy framework was explicitly designed to funnel the fruits of growth to the already wealthy on the basis that they would then "trickle down" to everyone else. But there was no "trickle down effect", and instead the rich laughed all the way to the bank (or to Switzerland, in the case of Messer’s Fay and Richwhite).

This sort of thing has an old and ugly name: class warfare. But where that phrase is usually used as a pejorative for any attempt to increase equality or improve working conditions, what we had in New Zealand was outright class warfare by the rich against the poor. And they're just waiting in the wings for another go. But this is not, and never has been, what New Zealand stands for - and if we want to protect the Kiwi dream of an egalitarian society, we must make sure that the Revolutionaries are not allowed to assume government again.


That's what happened when Labour ran an economy from 1984 onwards slashing jobs and having a high inflation, low wage economy.

It caused a real fall in wages.

Now days Labour just takes it through excessive levels of taxation.

Labour's says you are not being taxed excessively - but then says we will offer tax relief.

WTF - and who gets the tax relief?
People earning up to $140,000 per year if you have 6 kids.

Not much left for young single people after Clark/Cullens tax and spend programme which forces up interest rates and makes housing unafforadable to young couples.

And who do they expect to pay for people's retirement - that right young people.

What is that called 'intergenerational warfare' is called.

Posted by Anonymous : 2/16/2006 10:15:00 AM

Well, anonymous, some of the people you're going to "support" in retirement were part of a generation which fought hard for higher wages through the sixties and seventies. I was one of the lowest paid workers in an industry where the union was weak, and I had to get a second job so I could afford to go flatting. One day I just got sick of working seven days a week and told the boss that it wasn’t fair that I got less than another person as we did the same work. He agreed and I got a 50% raise. I was just 18 years old.

Don't sit around waiting for the government to put higher wages in your pocket. That's not their job. Get organised, support the SupersizeMyPay campaign, make a stand for decent wages. You gotta believe you’re worth it.

Posted by Anonymous : 2/16/2006 10:33:00 PM

So much for the "trickle-down effect". I'd like to see Russell Brown comment on this, being the big supporter of "free" markets and neo-liberal reform that he is.

Posted by Anonymous : 2/19/2006 01:18:00 PM

I'd like to know how much of these wage adjustments might been caused by the liberalisation of the NZ economy in the 80's? i.e. opening ourselves up to real international economic competition.

To remain competitive could have caused a large re-adjustment in NZ wages.

Posted by Anonymous : 2/19/2006 06:58:00 PM