Tuesday 13 November 2012

Expendable: Unemployment - Past & Present

Fearful Memories: Recaptured here, for the New Zealand television drama, Life's a Riot, is one of the many anti-eviction protests that wracked Auckland during the 1930s. The Welfare State had been built to ensure such scenes were never repeated. Full employment, everyone knew, was the key to working-class security and dignity.

THE FIGURE STRUCK New Zealand like a bombshell. It had been thirty years since numbers like these had been published. Memories were stirred. Fearful memories of one’s own or one’s parents’ abject surrender to the pitiless forces of an economic system in extremis. It was October 1967 and the number of New Zealanders registered as unemployed had risen to 5,458. Worse was to come, by June the following year the number stood at 8,665.
New Zealanders’ horrified reaction to the economic recession of 1967-68 and the rapid rise in unemployment which accompanied it was entirely reasonable. Forty-five years ago people possessed a much clearer understanding of the essential elements underpinning the Welfare State. They knew that it could only be paid for by a workforce that was fully employed and in receipt of incomes sufficiently large to maintain a healthy demand for goods and services. Everyone accepted that any return to mass unemployment would first weaken and then destroy the foundations of the Welfare State.
Throughout the 1950s and well into the 1960s the number of New Zealanders registered as unemployed seldom rose above three figures. People used to joke that the Prime Minister knew each unemployed citizen by name. Some economists even advanced the theory that New Zealand suffered from “over-full employment”; that skilled-labour shortages were hampering the country’s economic advancement.
Going Up? New Zealand economist Keith Rankin has produced this graph indicating the real levels of unemployment in New Zealand 1950-2000. His calculations factor-in the number of women who could not find a place in the workforce. Even with this important modification, New Zealand's success in keeping its people employed throughout the 1950s, 60s and 70s is remarkable.
For ordinary wage and salary-earners, however, full employment stood for personal, family and social security. It also guaranteed a measure of working-class dignity. If an employer treated workers unfairly, or paid them too little, there were always plenty of other employers looking for staff. Bad bosses could be told to stick their jobs where the sun don’t shine, and with more than half of the workforce enrolled in trade unions there wasn’t a helluva lot he could do about it.
In rehearsing these facts we are also measuring how very far New Zealand has travelled since the 1960s and 70s. The history of the last thirty years is, in many respects, the history of the slow and deliberate dismantling of the economic and social settlement negotiated by the Labour Party in the 1930s and 40s, and preserved (at least in its essentials) by the National Party right up until the critical year, 1984.
In a week which saw the number of unemployed New Zealanders swell to more than 175,000, or 7.3 percent of the workforce, the moral gulf separating 1967 from 2012 appears vast. And yet, had the Government been able to announce that the number of unemployed had fallen to 125,000 it would have been loudly congratulated. To keep the all-important inflation rate within the desired range of 1-3 percent per anum, the unemployment rate needs to be pegged at around 6 percent. That’s how successive New Zealand governments have preferred to manage the economy since the late-1980s – and there’s precious little evidence of a change of heart.
Keeping more than 100,000 New Zealanders enlisted in this “Reserve Army of Labour” does, however, require a very considerable hardening of the heart. A political class which can watch with impassive detachment while individuals, families and whole communities are stretched and broken on the rack of enforced idleness is not one that answers to anything but the crudest utilitarianism.
The biggest problem these comptrollers of human suffering face are the altruistic impulses of the unemployed’s fellow citizens. The natural human urge to extend a helping hand to those in need (an urge once institutionally embodied in the Labour Party) must be constrained. With the cynicism only the truly emotionally dead are able to wield, the victims of neoliberal economics are transformed into vicious parasites and anti-social monsters: “baby-breeders” and “child abusers” – depraved criminals as unworthy of our pity as they are of our taxes.
Having recast these largely innocent victims of capitalist dysfunction as members of the feckless and undeserving poor, it requires cruelty of particular refinement to then order them, on pain of being deprived of life’s necessities, to enrol in a labour market already over-subscribed to the tune of 175,000 souls.
It was long ago (1972) and far away (Scotland) that the radical trade unionist, Jimmy Reid, addressed the students of Glasgow University – who had just elected him Rector:
“To appreciate fully the inhumanity of [unemployment] you have to see the hurt and despair in the eyes of a man suddenly told he is redundant without provision made for suitable alternative employment … Someone, somewhere has decided he is unwanted, unneeded, and is to be thrown on the industrial scrap heap. From the very depth of my being, I challenge the right of any man or any group of men, in business or in government, to tell a fellow human being that he or she is expendable.”
How very, very much we have forgotten in forty years.
This essay was originally published in The Press of Tuesday, 13 November 2012.


Brendon said...

This government is getting shafted on the horns of rising house prices and a contracting productive economy. Bernard Hickey describes the situation well and gives a comprehensive list of possible solutions at http://www.interest.co.nz/opinion/61963/opinion-bernard-hickey-argues-weeks-unemployment-shock-and-housing-boom-figures-should

Basically at the minimum Key and English have to stop the house price boom because that allows the Reserve Bank to lower interest rates (inflation is otherwise quite tame). Bernard also gives many examples from around the world of changes to monetary policy that could also be tried.

In either case the neoliberal free market ideology is being challenged because the only solutions are governments take a much more active role in the economy.

You could from English face he realises the problem. Key seems to be in denial, arguing the unemployment figure was rogue and when English made his house affordability non-announcement Key countered the whole argument by saying there is a need to protect house values.

Unknown said...

I was made redundant in 1991 and never fully recovered from it, becauses it has and continues to affect older workers more. I struggled to find fulltime employment with the local council here in Lower Hutt, being employed for four years until being made redundant again in 1999 when the Hutt City council privatised irs works departments. I would never find fulltime employment again - I have been retired on National Super for nearly four years now and see other people thrown on the industrial scrapheap once they hit their 50's.

uke said...

There is a good documentary, 'In a land of plenty' (dir. Alistair Barry), about how structural unemployment was intrinsic to post-1984 neoliberal economics. The purveyors of this ideology, of course, tried to deny this fact or obscure the issue by using jargon euphemisms.

'In a land of plenty' can be viewed online:


Jack Scrivano said...

A former colleague reckons that within ten or so years even big manufacturing plants will be run by one man and a dog. (The dog will be there to make sure that the man doesn't touch any of the machines.)

On the one hand we want jobs for all, but on the other hand we want the increase in productivity that is offered by technology. It seems increasingly unlikely that we can have both.

peterpeasant said...

Key is a Wall Street trader.
English is a an ex Treasury wonk. (he cannot even work out his expense account but he can theorise economics).

The realities of employment or unemployment do not figure in the calculations of the wealthy, they cannot comprehend the reality.

As far as the National Party is concerned the poor and homeless deserve their fate. So do the jobless, they are one and the same.

Nick said...

The graph has a little give away line "based on 1986 Census definitions". As the current rate rises the current status quo always changes the definitions to make the reality sound more palatable to their acolytes. What the more acute observer will notice is the number who just walk away, the number of people who have degrees and are barristas, the number who are in "training" or students building debts that can never be repaid.

I challenge people all the time to ask their friends "what are your children doing?" The answer is invariably that they have a dead end job, are students soon to be sitting on the couch doing zip, or similar.

I also challenge people to question what is driving this cruel waste. Answers like "neo liberalism" or "too much tax" or whatever only pinpoint ideologies or groups perceived as culpable. And it is none of these and all of these answers, all at the same time.

If you want to point fingers go ahead, but start by looking at how you live, what you consume, how and why you work, and what for? We are coming rapidly to a time when if we don't voluntarily question all of our economic assumptions such as The nature of "employment", "growth" and "ownership" they will be questioned for us by circumstance.