As election day nears, you’d think it would be time for union leaders to raise workers’ needs in front of the politicians. The New Zealand Council of Trade Unions (CTU) has released its spin on the latest statistics summarising the socioeconomic state of New Zealand in the last decade.

The CTU’s assessment of the Ministry of Social Development’s 2008 Social Report, headed “Social Report: Lots done, more to do”, could best be described as a pro-Labour spin on some pretty mixed statistics for the last decade, a period dominated by the Clark Labour government.

“The social wellbeing of New Zealanders has improved since the 1990s with most social indicators moving in the right direction,” enthused CTU vice president Maori Sharon Clair. “Clearly there is more to be done. Low wages are still holding back the country, and 13% of households in poverty is 13% too many. In many indicators the trends are good, however,” Clair said.

Of course, she is right, in a “lies, damned lies and statistics” sort of way. But what does “most” social indicators actually mean? A look at the actual report reveals a much less praiseworthy result than the CTU spin would suggest. I encourage anyone interested to go to www.socialreport.msd.govt.nz and make their own assessment of it.

“There are better health outcomes reported compared with the 1990s. Life expectancy has improved for both males and females,” states Clair. This is true, and of course a good thing, but as the social report’s figures reveal, it’s been true almost without exception for the past 60 years. While welcome, the fact hardly warrants a round of backslapping by Labour and its acolytes.

“Early childhood education has improved between 1997 and 2007 – 11.3% for three-year-olds and 5.8% for four-year-olds.”

Such figures are, by themselves, of little value. Which children have gained from this and what is the quality of care like? These questions are a whole area of research in themselves. An answer to the first of them is present in the report itself, but conveniently omitted from the CTU’s whitewash:

“Year 1 children in low-decile schools (those that draw their students from communities with the highest degree of socio-economic disadvantage) are much less likely to have attended an early childhood education service than children in high-decile schools. In 2007, only 83% of new entrants in decile 1 schools had previously attended early childhood education services, compared with 97% in decile 6 schools and 99% in decile 10 schools.”

What does this reveal? Looked at another way, kids at decile 1 schools are 17 times more likely than kids at decile 10 schools to have had no formal early childhood education. It is inexcusable that the CTU found that fact not newsworthy, while highlighting the overall figures that put their party of choice, Labour, in a much more favourable light.

On secondary and tertiary education, the facts don’t look too flash either, especially for low-income people, although our intrepid spindoctors at the CTU would not have us see it that way. According to the report:

“Young people from schools that draw their students from low socio-economic communities are less likely than other young people to attain higher school qualifications. In 2007, only 49% of school leavers from deciles 1-3 schools (in the most disadvantaged communities) attained qualifications at NCEA level 2 or above, compared with 62% of those leaving deciles 4-7 schools and 79% of those leaving deciles 8-10 schools.”

“Income inequality has improved since the mid-1990s,” Sharon Clair said. “In 2007, 13% of the population was living in households with incomes below the poverty threshold of 60% of median income, after deducting housing costs, compared with 22% in 1997.”

However, reading the report:

“Income inequality rose between 1988 and 1991, briefly plateaued, then rose again from 1994 to 2004. Most of the observed increase in income inequality between 1988 and 2004 was due to a larger overall rise in incomes for those in the top 20% of incomes – around a quarter once adjustments for inflation are made. In that period, incomes for those in the bottom 20% of incomes decreased a little. Incomes for the middle 60% climbed more overall for those closer to the top 20% than for those closer to the bottom 20%.”

The biggest jump in income inequality during the period graphed in the report is from 1988-1992, the last years of the fourth Labour government and the first years of the incoming National government. Rises in income inequality have occurred at least as much under Labour as National. There has been an improvement in the period from 2004 on, but for the whole period from 1997 to 2007 there has been no improvement at all. Even for the 2004-7 period, when things were supposedly improving, the Gini coefficient for inequality remained the same (34).

As the report also notes, the OECD uses a different measure, and according to that New Zealand has actually got slightly worse. The biggest reason for the improvement noted in the CTU quote above is a gradual decline in poverty (by the NZ measure) during both Labour and National governments after the jump due to the National Party’s benefit cuts, which Labour has never addressed.

“At the workplace, our median hourly earnings increased over the ten-year period from $15.35 to $18.”

In itself, this appears to be an unqualified improvement, but it is far from complete. Actual take-home income is not given. Since “employment” for the purpose of this report is defined as anything above one hour a week, the figure is still pretty useless. If you’re $3 an hour better off but working fewer hours, you may not be much better off at all. And the number of men in part-time employment has almost doubled since 1986, so the absolute gains are probably not as good as the figures suggest.

The observation that “three-quarters of New Zealanders report satisfaction with work-life balance” is completely subjective and not of much value. People are more likely to report “satisfaction with work-life balance” if they earn less money, which suggests that as a meaningful measure of working people’s wellbeing, this particular piece of information is useless. If a “poor but happy” workforce is a worthy objective, then this is something to celebrate. Any trade union movement whose first loyalty was to workers, and especially to the lowest paid workers, would have known better than to trumpet such meaningless data as good news, instead of facing up to the hard new facts of growing worker poverty. Workers in debt now make up nearly half of those seeking help from budget advisory services. Previously, most new clients were beneficiaries. Today, the Hastings Budget Advisory service reports that 42% of its 129 new clients in the three months ending June 2008 were workers in paid employment, whose wages did not meet their expenses. This appears to be a national trend; the New Zealand Federation of Budgeting services had 5864 wage and salary earners asking for help alongside 14,454 beneficiaries last June.

Sharon Clair concluded the CTU’s statement by saying that we are seeing progress for low-income people, but that there is still more to be done. Clearly this statement has required a highly selective reading of the data, which show very mixed results. In many cases the statement does not hold up when national averages are analysed more closely and low-income earners are seen to have missed out on the gains.

“Banning alcohol in public is not the answer” says Franks

“This is a class issue. As more and more people find it harder to buy a drink in the pub, they find somewhere that doesn’t charge them an arm and a leg.”

“Mayor Kerry Prendergast says that the bylaw will only affect those who display anti-social behaviour. Public drinking is not anti-social behaviour.” says Franks.

“It’s true, there is an issue of homeless people in the parks,” said Franks.

“Many of those people will never afford housing at current costs”.

“We live in an alienating capitalist system, which actually restricts people’s choice”, states Franks.

“If I get elected to represent Wellington Central I’ll restore the option of half a dozen public bars with plastic jugs of cheap draft, damp sticky carpets, bar tables you can lean on and a covered part with a heater somewhere where you can smoke. There will be quart bottles, meat raffles, an old upright piano, a pie warmer and a guitar behind the bar.”

For those of us in the working class, few things are more important than having a real job. A real job produces stable predictable earnings. It pays enough for us to support ourselves and our dependants, with a bit left over for some luxuries, savings and fun. A real job is also a big part of our social life. For many people their workplace is a sort of secondary family; in some cases the community of an individual’s job provides their main social connections. In every case a proper job gives us a feeling of social worth, a feeling that we belong, and that we count for something because others count on us.

But today for many New Zealanders a “job” means only a tenuous on call connection with no guaranteed hours. A “job” where you wait idle and unpaid until the phone call when the bosses want you. With that sort of “job” it isn¹t possible to plan a normal and stable life, let alone plan for the care of dependants. Under those circumstances workers often must have more than one “job”, even up to three or four.

Organised workers in many industries have fought long and hard against casualisation and its effects. A good example of this can be seen in a report from the Service and Food Workers Union magazine:

“The casualisation of work in many sectors and industries in New Zealand has been a major concern for unions over the last few years. Many SFWU members in the food processing sector are worried about how their employer is using temporary workers instead of hiring full-time permanent staff. Workers are also worried the poor conditions offered to temp workers and the lack of job security.

Recently, SFWU members at Griffins ETA in Auckland have been on a recruitment drive to get temporary workers to join the union and air their issues. This month Griffins WIRI members recruited 46 workers and are now seeking to elect a delegate from amongst them to represent the issues of temps.

Employers argue that temp workers are good because they can be brought in when permanent staff need a break or are sick, however on some union food sites the ratio of casual staff to permanent staff is creeping up. On some sites one third of the workers are casuals or temporary workers.

The following points have been raised by temp workers at recent union meetings.
* We need to talk with and organise temporary workers on our union sites.
* Temporary workers are not the people that the union needs to be
criticising. Criticism needs to be levelled at the employer for hiring temp staff and trying to undermine hard-won working conditions for unionised, permanent staff.
* There is goodwill from union delegates and workmates who feel their temporary workmates are getting a unfair deal.
* Temp workers want to join the union so they can address the issues they have with job-security etc…Including temp workers with permanent workers in the union has led to a feeling of stronger unity on the job at food work sites”.

- Our Voice, Winter 2004

When safely out of government Labour MPs sometimes tut tut about workplace casualisation:

“Labour’s Steve Maharey contends that the jobs that are appearing are “McJobs” – the ones that are insecure, part-time, low-paid, low-skilled, no training given and “with no real future” for the people who are working in them.”

- The Dominion, 17/5/95)

Now, thirteen years later, after 9 years in government and scratching for workers votes in the coming election, Labour has made noises about taking some action on casualisation.

Employment protections for temporary and casual workers are to be strengthened under proposed changes to the Employment Relations Act, Labour Minister Trevor Mallard announced in a press release last June.

“The proposed changes demonstrate once again our government¹s commitment to protecting the most vulnerable members of the workforce and to providing an employment environment that is conducive to all parties conducting their relationship in good faith.

“Under the changes, the Department of Labour will develop a Code of Employment Practice for Casual and Non-Standard Employment which will make it easier for employers to understand and comply with their obligations to casual and temporary workers.

“The code is also expected to help employees understand what they are entitled to by law.
“An awareness-raising campaign that aims to increase workers¹ knowledge of their statutory rights in the workplace is also planned.

“At present, only the Employment Relations Authority and the Employment Court have the power to decide whether an employee has a fixed term contract or is actually a permanent employee. An amendment to the Employment Relations Act will extend this power to labour inspectors, giving employers and employees a simpler process for confirming their status,” Trevor Mallard said.

The Government minister’s announcement was warmly welcomed by the countries top union leader.

“The rights at work for casual workers are about to get better, and no party should stand it the way of this much needed law change,” Council of Trade Unions president Helen Kelly said.

Describing the proposed law changes as “extremely significant and important,” Helen Kelly went on to sketch out a good description of casual work in New Zealand.

“There is an army of casual employees, often low paid workers, many of whom are totally insecure about their terms of employment, their hours of work, their entitlements to sick leave and holidays and their employment status in relation to any workplace problems.” “The insecurity of their employment makes it difficult for them to assert their rights, and also effects many other aspects of their lives in areas like housing stability, access to loans and superannuation savings.”

But then the CTU President dropped the ball, by accepting the practice of casualisation, adding: “Of course there are instances of genuine casuals where the arrangements are necessary in normal business operations.” That comment not only undermines workers constant struggle for real jobs. It also negates current CTU policy, which clearly states:

“That casualisation of working hours should be opposed and legislation should entitle part time workers to a basic minimum number of hours pay per day”. (From the CTU policy book, produced November 2000.)

The Labour government casualisation legislation praised by Kelly provides an extra avenue for long serving contract workers to argue that they are entitled to permanent status. That may help improve the condition of some fixed term contract workers at the higher end of the job market.

The suggested provisions won’t in any way assist the “army of casual employees” that Helen Kelly accurately described in her own press release.

Thousands of low paid casual workers waiting for the phone to ring won’t be any better off under Labour’s new law.

As long as capitalism exists there will be legal and illegal pressure from employers to impose casualisation on workers. Instead of praising the government for pre election window dressing we need struggle to keep organising casuals and demanding that they get real jobs, and not low paid irregular soul destroying bit work.

Anne spoke as a member of the Child Poverty Action Group (CPAG), a non-profit group formed in 1994. CPAG believes that “New Zealand’s high rate of child poverty is not the result of economic necessity, but is due to policy neglect and a flawed ideological emphasis on economic incentives”.

Anne told the meeting about CPAG’s case against the government currently being heard by the Human Rights Review Tribunal. CPAG contends that Labour’s in-work tax credit breaches New Zealand’s human rights legislation by discriminating against children of beneficiaries.

“Current policies ensure that people are trapped in poverty,” Anne said. “The damage done by poverty in childhood never goes away. People are precluded from having a decent life.”

She argued that it is “totally unjust and discriminatory” not to help beneficiaries: “Unpaid work is still work. Bringing up children is work. And it now takes a much bigger investment to produce a child for modern life.”

Anne’s talk inspired this reporter to find out more about the work of the Child Poverty Action Group. Below are some quotes from the CPAG’s legal case against government discrimination of beneficiaries at the Human Right Review Tribunal.

Thousands of children in hardship

In the last decades of the 20th century, New Zealand had the fastest growth in income and wealth inequality in the OECD. Little has been done to improve the situation since then. In 2001, NZ ranked near the bottom of the rich nations’ index measuring infant mortality, children’s health and safety, teenage pregnancy, and immunisation. It also ranked bottom in the percentage of 15-19 year olds in full- or part-time education, and in the number of deaths from accidents and injuries.

Despite the better economy and significant increase in paid employment, between 2000 and 2004 the proportion of all children in severe and significant hardship increased by a third, to 26%. In 2004, there were about 185,000 children in benefit families in some degree of hardship, with 150,000 of them in significant or severe hardship. While official data is yet to be produced for 2007, this report concludes that little has changed for this group of children who have been “left behind”.

Tax credits discriminate

In 1996, child benefit policies that discriminated against the children of beneficiaries were introduced. One key policy was the Child Tax Credit (CTC), which was available only to children whose parents were not on a benefit, ACC or student allowance. These policies undermined the principle that all children from low-income families should be treated the same.

In 2002, the New Zealand government finally acknowledged child poverty, and vowed to eliminate it. Yet it was not until 2005 that Working For Families was implemented. WFF represents a significant redistribution of money in favour of low- and middle-income working families with children, and has reduced child poverty in many of these families. But for families supported by benefits, increased family assistance has been offset by a range of benefit cuts, leaving many simply “no worse off” than they were before these changes. WFF has not only continued the discrimination in the CTC, it has further widened the gap between low-income families on benefits and those in work, by introducing the In-Work Tax Credit (IWTC). The IWTC gives $60 a week to families with up to three children and an additional $15 a week for subsequent children. Now, to be eligible for the IWTC families must come off an income-tested benefit and meet a work test.

Families receiving a benefit are also excluded from receiving the Minimum Family Tax Credit (MFTC), which itself is a very unsatisfactory income support policy.

In 2005 the government augmented the WFF package by an additional $500m by targeting families earning more than $27,500. Children in families receiving benefits were not helped at all by this extra spending and remained excluded from the IWTC.


Work is not sufficient

The reforms to New Zealand’s social security initiated in the 1990s focused on moving people off welfare into work. Principles relating to the health and general welfare of the community, and participation and belonging, were abandoned.

Working for Families and Working New Zealand have entrenched and extended this approach, promoting paid work as the way out of poverty.

While work is very important for reducing poverty and increasing overall wellbeing, a “work first” policy is not sufficient to eliminate child poverty. Parental or child illness and disability, physical and social isolation including poor access to services, fewer employment opportunities and lack of support may all act to preclude parents from paid work.

Leveraging more parents into low-wage jobs is expensive and, in the long term, largely ineffective. The cost of the additional administration required for Working New Zealand (WNZ) from 2007 to 2012 was estimated at approximately $100 million.

Contrary to the assumptions underlying WFF and WNZ, evidence shows that most beneficiaries leave the benefit system of their own accord when they can. Generous welfare regimes need not result in a poverty trap and may be the most effective at reducing child poverty.

Unfair taxes

Low-income families are disadvantaged by the combination of New Zealand’s relatively flat personal income tax regime and consumption tax (GST).

Conversely, high-income earners are advantaged by the existing income tax regime and by gaps in the tax system, such as the lack of a capital gains tax.

Recent changes to the tax regime, such as tax breaks for savings in managed funds and KiwiSaver, signal a likely return to manipulations by the better-off to minimise tax, as occurred in the early 1980s. The fiscal costs of these tax breaks may preclude overdue tax cuts for those on low incomes.

Poverty affects health

New Zealand children have higher rates of preventable illness and deaths from injuries than children in almost any other OECD country. They have comparatively high infant mortality rates and low immunisation rates.

The single most important determinant of health is income. A child growing up in poverty is three times more likely to be sick than a child growing up in a higher-income household. Poor nutrition, a stressful environment and substandard housing are factors that diminish a child’s ability to fight infection.

Maori and Pasifika children are most at risk of poor health. Insufficient disposable income, substandard housing, inadequate nutritious food and unequal access to health care all contribute to the risk of poor health. Of all ethnic groups, Pasifika children have the highest rates of infant mortality.

Housing unaffordable

Rates of home ownership are now at their lowest since the early 1950s, reflecting decreased housing affordability and an absence of government-funded programmes to support home ownership for modest income households. Ma¯ori and Pasifika families are disproportionately affected by reduced housing affordability, and as a consequence are most likely to live in inadequate, overcrowded housing.

Low-income families increasingly unable to meet day-to-day expenses are often doubling up in the cheapest accommodation available, often state housing.

Transience is a significant problem for the many thousands of low-income families in private rental accommodation, and has high costs for children’s socialisation, education and health.

Housing and neighbourhood policies that deal with the many disadvantages faced by low-income households and communities are the key to providing stable, safe, healthy living arrangements for children, and supporting their development and education.

Education prospects at risk

Early childhood education (ECE) policies have a profound impact on children and their families. Quality early childhood education has been demonstrated nationally and internationally to have long-lasting benefits for both individuals and society.

Insufficient funding was identified as “the major issue confronting ECE services” in a 2007 national survey of New Zealand early childhood services. Almost a third of parents surveyed stated that they had difficulties in paying fees and donations, with low-income families more likely to face this dilemma.

Whanau-led services such as Playcentre and Te Kohanga Reo are not eligible for the recently introduced provision of 20 hours per week free early childhood education for 3- and 4-year-olds, raising significant equity issues for low-income families who wish to use these services.

Poverty also affects the education prospects of school-age children. Inequalities have been reinforced over time, compounding the disadvantages many children already face. Levels and methods of funding for low-decile schools are an issue, both because of relatively low parent and community contributions in such schools, and because of the sheer scale of their students’ needs.

The reinstatement of school zoning would appear to protect the right of students from poorer families to attend local schools. However, the fact that zones are now drawn up by schools rather than government allows zones to be manipulated to exclude lower socio-economic areas.
The CPAG report concluded by urging the Government to address child poverty in New Zealand now. In the short term, CPAG calls for reforms including immediate tax credits to all families with children and free food for hungry children in poor schools.

In the longer term, CPAG calls on the government to:

* provide affordable, accessible and healthy housing for all low-income New Zealanders

* provide free health care for all children under 18 – day or night

* provide genuinely free, quality public education for all, with no school fees.

* legislate a realistic minimum wage for raising a family today.


Union leaders’ response

Following the release of the Child Poverty Action Group’s report, Council of Trade Unions secretary Carol Beaumont made a statement commending the group for their “persistent work in keeping child poverty in the public domain and on everyone’s agenda”.

Carol Beaumont “agreed with many of the points made in the report”, but did not suggest any meaningful ways to fight poverty. Instead, she returned yet again to the tired old CTU leaders’ theme of seeking excuses for the Labour party: “We also recognise changes that have been made by this government that have benefited low-income people and working people.”

The CTU comment on the report concluded lamely: “It’s an important discussion to have with government and the political parties.”

Not so surprising when you remember that Carol Beaumont is a Labour candidate in a safe Labour seat this year. But that still leaves a huge unresolved problem for the working class. Faced with a comprehensive report of desperate poverty in New Zealand, leaders of the largest workers’ organisation in the land don’t really want to know.

The demands of the Child Poverty Action Group are just and reasonable, but they will require nationwide mass action from below to be realised. That will call for a stronger and braver form of workers’ organisation than we have at the moment.