New Zealand: How to end the race and class inequalities destroying working people’s lives

By Mike Treen

September 9, 2021 — Links International Journal of Socialist Renewal reposted from The Daily Blog — A recent study found that Māori had twice the mortality from various cancers than non-Māori.

This statistic isn’t new. I came across a similar finding in my notes from three decades ago. Cancer deaths twice that of Pākeha, while medical interventions were half that of Pākehā.

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

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

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-Māori) 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 Māori) into poverty wages and insecure work.

Before this recession, Māori and Pasifika had higher labour force participation rates than Pākehā.

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 fourth 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 percent to 11 percent overall and was 25-30 percent for Māori and Pasifika communities.

Unemployment was the weapon the bosses deliberately used to break workers’ willingness to resist. Wages were cut, welfare benefits were cut, healthcare 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 percent of the working age population.

By the September quarter of 1992, there were 1,174,500 full-time jobs representing 43.8 percent of the working age population — a loss of nearly 200,000 full-time jobs, which was equivalent to 10 percent of the working age population.

It was worse for men. Male full-time employment fell from 73.1 percent of the male working age population to 57.4 percent.

In absolute terms, male full-time employment didn’t pass the 1986 number until the December quarter in 2001, when it reached 909,000. But, at 63 percent 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 percent.

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 for one of them to 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 of workers, and to break the unions that stood in their way. Real wages were cut by about 25 percent 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 Māori and Pasifika families.

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

It was claimed the benefits were “too generous”, and they were cut by the 1990 National government from around 40 percent of the average wage to around 33 percent for the adult unemployment benefit. Their value, compared to the average wage, has been allowed to steadily decline for two decades since then, because it was only ever increased in line with the Consumer Price Index, rather than average wages like superannuation has been.

The 1991 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. Before the 1991 cuts, around 25 percent of children in beneficiary families were identified as poor in the Household Economic Survey. That rose to 75 percent after the cuts, and it hasn’t changed much since.

Since the current Labour government was formed three years ago, there’s been a $25 a week one-off increase to the benefit levels, and two annual increases matching inflation rather than the Consumer Price Index (CPI).

But the value of a main unemployment benefit is still only 19 percent of the average wage. That’s under half its value in 1990, before the cuts by National — and then maintained by Labour during its 1999-2008 term, because it kept National’s policy of only increasing benefits by the CPI.

In addition, housing has doubled as a percentage of people’s expenditure because nothing has been done by either National or Labour to rein in the housing market speculation 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 which 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 percent of the jobless number. But, over the next decade, it dropped to only 18 percent of the “jobless” number. It also went from 120 percent of the official unemployed number to only 45 percent in 2013.

The end result is that, since the late 1990s, the percentage of working-age adults receiving a benefit has been reduced by 5 percent (from 13 percent to 8 percent of the working-age population). At the same time, the average unemployment rate has fallen only about 2 percent (from around 8 to 6 percent).

Getting that 3 percent 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.

That’s 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 the 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 Māori and Pasifika who 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.

Māori and Pasifika can benefit from a radical increase in social housing, but we need additional mechanisms that empower Māori, 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 up all those at the bottom 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 the unions that exist and that need to be built or rebuilt for the new working class emerging in the gig economy.

And because Māori and Pasifika are disproportionately represented in those layers of the working class, they will rightly benefit disproportionately from any uplift for the class as a whole.

Mike Treen founded the modern Unite Union project with Matt McCarten in 2003 and is now the Industrial Officer for the union. He helped lead the successful 2015 campaign against zero-hour contracts in the fast food industry that ultimately led to these contracts being outlawed. 

Mike was born and grew up in Tāmaki Makaurau, and has a BA from Auckland University. He was the Auckland co-ordinator of Global Peace and Justice Auckland. Since becoming active, as a high school student, in the anti-Vietnam war movement in the 1970s, he’s been involved in most social justice, anti-nuclear, anti-racist, anti-apartheid, and anti-war movements.