Getting Labour "Off The Couch" To Break Unemployment's Vicious Circles.

Avuncular Intervention: Regional Economic Development Minister, Shane Jones, tells TVNZ's Q+A programme that he is determined to introduce measures which will ensure that his "ne'er-do-well nephews" get "off the couch" and into work. Historically, breaking the vicious circles of unemployment has required the state to become the employer of last resort.

YOU’VE GOT TO hand it to Shane Jones – he sure knows how to seize control of the political agenda! Ever since his provocative performance on last Sunday’s Q+A, his name has seldom been out of the headlines. More impressive still, his ideas are being debated everywhere.

Sparking a genuine national conversation on anything other than sport and celebrity sex isn’t an easy thing to do. Generally speaking, it’s evidence of somebody, somewhere, striking a nerve. In Jones’ case, the phrase that caused so many Kiwis’ knees to jerk was the one prompted by his determination to get his ne’er do well nephews “off the couch” and into work.

In many ways, Jones’ arguments for unemployed youngsters to be forced into the world of work are classic Labour. Traditional working-class New Zealanders have little patience with slackers and bludgers. Decent men and women measure their worth by the hours they put in. Neither are they fussy about the jobs they put their energies into. The main thing is to be busy; to contribute; and be seen to be doing everything possible to stand on their own feet and pay their own way.

The problem (if problem is the right word) with this “can-do” attitude, is that it’s, almost always, a reflection of the “virtuous circles” in which its exemplars have been raised. Families in which the virtues of hard work, and the need to “better oneself”, have been drummed into children from birth tend, strangely enough, to produce hard workers who better themselves. Success is thus rendered intergenerational: fixing the family’s upward social trajectory; and ultimately carrying them out of their class altogether. No matter how high such families may rise, however, the values that drove their success, providing they continue to be inculcated, prevent them from falling.

But, what about the much less fortunate inhabitants of “vicious circles”? Families broken by massive economic dislocation and enforced idleness. Families in which hope curdles and faith in the future withers. Households where all sense of self-worth is undermined by repeated knock-backs and rejections; where, even when work is secured, it is precarious, wretchedly-paid, and subject to conditions that only further erase any semblance of personal dignity. In these circumstances, the wonder is not that such vicissitudes precipitate addiction, desertion, violence and abuse; but that so many men and women struggle to resist the vicious downward spiral into indifference and despair.

The puzzle which Shane Jones has set himself, and (through sheer chutzpah!) the coalition government, to solve is: how to rescue those trapped in these vicious circles; and how to then install them in virtuous circumstances of sufficient permanence for that virtue to become self-sustaining?

Significantly, Jones is reaching back into New Zealand history for answers. Because, of course, this country has broken vicious circles before. To secure a decent life for the social casualties of economic depression and world war, the First Labour Government expanded dramatically the employment opportunities offered by the state. Tens-of-thousands of workers who might otherwise have subsisted from odd-job to odd-job, found permanent employment, with union-negotiated wage-rates and conditions, in the state-owned railways, postal and telegraphic services, and infrastructure projects. They may not have been the world’s most productive workers, but these state-provided jobs allowed them to establish homes and families, and to raise children untroubled by the viciousness of the downward spiral.

That Jones is experiencing resistance from his former Labour colleagues is one of history’s little ironies. Or, maybe not. Because it was the Fourth Labour Government who made such an issue out of the alleged “inefficiency” of New Zealand’s “feather-bedded” government departments. The much-vaunted process of “corporatisation”, out of which emerged the significantly-titled “State Owned Enterprises”, saw thousands of workers lose not only their jobs, but the economic and social security that came with them. Virtuous circles of fifty years duration were broken, and the vicious circles, which have become such a feature of the free-market era, began sucking thousands of New Zealanders into their whirlpools of dysfunction.

Shane Jones, and his boss, Winston Peters, both know that short bursts of employment, even for the minimum wage, cannot cure the effects of structural unemployment. They’re aware that the vicious circles of dysfunction can only be broken by the state-subsidisation of permanent employment.

And that will require the Labour-led Government to “get off the couch”.

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 8 December 2017.

"Flexicurity" - The Future Of Work?

The Fictional Realm: Borgen's prime-ministerial heroine Birgitte Nyborg (Sidse Babett Knudsen) is consoled by her Machiavellian spin-doctor Kasper Juul (Pilou Asbaek) in the award-winning drama series from Danish public television. Until very recently one of the world's most progressive states (its current immigration reforms are insupportable!) Denmark is able to run active labour market policies such as "flexicurity" only because the Danish working-class still enjoys effective representation in the country's political system. Would it were so in New Zealand!

 

IF ONLY New Zealand’s politics could be like those of Borgen – the Danish television series. Centred around the actions of a fictional Danish prime minister, Borgen’s politics are realistically riveting. More than this, however, they are rational. Denmark is portrayed as a nation with a conscience: the host of better angels to which, in extremis, Borgen’s heroine (yes, the prime minister is a woman) can successfully appeal. In the fictional realm, at least, the Danes remain the sort of people New Zealanders once believed themselves to be: decent, practical and courageous.

 

In population terms, Denmark and New Zealand are not that far apart: 5.6 million to 4.6 million. They are also similar in possessing large and efficient primary production sectors. Like New Zealand, Denmark’s political history has been strongly influenced by social democracy, with both countries boasting large and historically competitive Labour parties.

 

It is, therefore, unsurprising that left-wing intellectuals and Labour politicians from New Zealand have, from time to time, turned to Denmark for inspiration. In the late-1950s the left-wing political economist and public servant, William B. Sutch, urged Walter Nash’s Second Labour Government (1957-60) to follow the example of the small, highly-productive nations of northern and western Europe by radically increasing the range and complexity of New Zealand’s exports.

 

Excluding the political anomaly of the Rogernomics years (1984-1990), Sutch’s blueprint, albeit much updated and amended, has remained at the core of Labour’s economic thinking ever since.

 

Equally consistent has been the party’s predilection for adapting Scandinavian solutions to New Zealand’s social problems. Until the mass unemployment created by Roger Douglas’s free-market policies rendered the whole subject moot, the David Lange-led Labour Government borrowed heavily from the so-called “active labour market” regimes of the Scandinavian countries – especially Sweden and Denmark. Under the rubric of Grant Robertson’s “Future of Work Commission”, Labour is about to look northward again.

 

The Holy Grail? Grant Robertson's Future Of Work Commission looks set to make "flexicurity" an important part of Labour's 2017 manifesto.

 

Robertson’s buzzword-de-jour is “flexicurity”. As the name of this highly successful Danish policy suggests, the dual objective is to facilitate the maximum degree of labour market flexibility while providing the maximum level of employment security. Employers are offered considerable freedom to hire and fire, but, in return, employees are generously supported through periods of unemployment, and assisted with re-training and re-entering the labour market, by the state.

 

According to the official website of the Danish Government: “Danes are positive about globalisation and do not fear losing their jobs. Rather they seek opportunities for new and better jobs. This is partly ascribed to the flexicurity model which promotes adaptability of employees and enterprises.”

 

Small wonder that Labour’s Future of Work website links directly to this quintessentially Danish solution. In a New Zealand labour market increasingly composed of “independent” contractors, people holding down multiple jobs, part-timers, interns, and the plethora of similarly “precarious” employment relationships, the Danes’ flexicurity policies must have appeared to Grant Robertson in much the same way as the Holy Grail appeared to King Arthur.

 

Unfortunately, Robertson and his advisors failed to read the small print. New Zealand and Denmark have many similarities, but in 2016 they also feature a number of vital differences. In relation to flexicurity, the most important of these is the respective level of union density.

 

As the official Danish website puts it: “The development of the labour market owes much to the Danish collective bargaining model, which has ensured extensive worker protection while taking changing production and market conditions into account. The organisation rate for workers in Denmark is approx. 75%.”

 

The organisation rate for New Zealand workers in 2014 was approx. 19%.

 

It is typical of the contemporary New Zealand Labour Party that it has simply ignored the profound contextual differences between the workers of New Zealand and Denmark. With three-quarters of the workforce organised, the Danish Confederation of Trade Unions is a force in the land. With fewer than one in five New Zealand workers organised, the NZ Council of Trade Unions is in no position to prevent flexicurity turning into a government-backed scheme for employers to hire and fire at will. Presumably, the lone trade unionist on Robertson’s “External Reference Group” pointed this out. Presumably, Robertson wasn’t listening.

 

Borgen’s politics are rational because the balance of social forces in Denmark obliges its politicians to behave reasonably. Labour’s policies of 30 years ago predetermined the future of work in New Zealand: flexibility without security.

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 15 January 2016.