The legacy of neo-liberalism on family life - some thoughts from Blackball

I wrote most of the following post around three weeks ago, and was always intending to go back and finish it. I thought it might be an opportune time after seeing a related item on the news tonight.

A neonatal paediatrician is warning parents to do all they can to avoid putting their young children in daycare, saying it could permanently harm their developing brains. Dr Simon Rowley advocates for a parent to stay home with children in the early years if they can. He cites research looking at the hormone cortisol that found 80% of children in daycare become more stressed during the day, with toddlers showing the highest levels of stress.

Early Childhood Council chief executive Sarah Farquhar has taken issue with Dr Rowley .
"It's going back to the times of women being barefoot and pregnant in the kitchen. That's not healthy for children and it's not healthy for women . . . making parents feel guilty about their choices is not the way to go."
The Early Childhood Council also happens to be protecting its market - as an organisation representing private childcare centres. Kids are their source of cash.

Now its possible that Dr Rowley is running a socially conservative agenda here, particularly when he blames the social policies of Helen Clark, and many social conservatives demonise Clark. Yet to leave the issue there I think does the left a disservice, as it may leave empty political ground for socially conservative politicians if the left is not seen to be engaging with the issues in a deeper way.

What got me thinking about this was a very interesting discussion during the Blackball May Day celebrations earlier this year. We looked at the legacy of neo-liberalism in New Zealand, with a focus on its affect on family life.

I am greatly thankful to my fellow participants for helping me think about the issues in new ways.
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The Blackball Working Class History Project now has a blog.

This year I attended the May Day celebrations in Blackball. It was an enjoyable and engaging weekend. As 2008 was the 100th anniversary of the famous Blackball miners strike, the numbers were smaller in 2009, but this allowed the issues to be covered in greater depth.

On the Saturday morning a forum was held on The Legacy of Neo-Liberalism. Many people prepared provocations for the forum in order to start the discussion. Rather than focus on economics and the undemocratic nature of how neo-liberalism was forced on the electorate, many people spoke of the legacy of neo-liberalism on families and family life.

It is great to see many of these contributions from the forum now appearing online. Paul Manuder has written a rundown of the weekend. Sandra and others highlighted the punative attitude of many government departments.

"I’ve got a friend in Greymouth who cares for her baby granddaughter, her ten year old son and her suicidal adult son. Can someone tell me why this woman, this mother, grandmother, carer of our most vulnerable, is being badgered by WINZ to get paying employment?"

I believe part of the explanation for this lies with the Social Security Amendment Act passed by the last Labour Government. This Act changed the whole purpose of the Act famously passed by Michael Joseph Savage in 1938. Rather than a focus on the welfare of the community, the focus came on getting a job - any job - as the only legitimate form of social assistance. I suggested Savage would be turning in his grave if he knew about these changes.

To return to the focus on the impact of neo-liberalism on family life, it was interesting that many saw the lack of family time due to financial pressure as a key problem. For example, a local teacher, Te Whaea Ireland saw many children with a desperate need for one on one contact with adults. Sandra summarised Te Whaea's comments like this.

"Parents love their children but the children are stressed. Families are stressed through everyone working long hours to survive economically. Children are arriving at school earlier, then there’s after school care, there’s no adult with the time to help with homework, no time for mooching- that stress-free space which generates self management, relatedness, creativity etc. The family is no longer functioning as a nurturing unit. She saw among her peer group, the stress in terms of a young couple trying to acquire a home and to have a family. She saw the traditional homemaker, once gender equality is accepted, as a valid and vital role in society."

It ought to be stressed that Te Whaea was not advocating a socially conservative agenda, as she assumes the acceptance of gender equity. Freedom and equity should aim to give people greater choices. The issue is that due to financial pressure parents no longer have the choice whether they wish to work OR be a homemaker.

Essentially, over the past 50 years employers have used the rightful work aspirations of women to halve 'real' family incomes - double incomes are now required to raise families in most cases. The Employment Contracts Act made the situation worse. I do not wish to go back to the 1950s here - what I am highlighting is how New Zealand employers and their right wing friends have used this societal change to their own economic advantage.

In terms of policy responses the following might be a useful starting point. The challenge of the left is not only to announce such policies but to demonstrate how they are relevant to the issues currently facing families. I am not sure the left has done so yet, or as effectively as it might.

• A new industrial relations framework which delivers a fairer share of company profits to families (the new Australian legislation might be worth looking at - particularly if we are serious about a real CER that is not limited to just what the business community wants)
• A minimum wage set at two thirds of the average wage (sign the Unite petition)
• Universal Basic Income (which would recognise the currently unpaid work of homemakers)
• A year or more of paid parental leave.
• More research on children's experiences on daycare - are there ways to make it less stressful and more confortable for the kids?
  

I very much welcome comments on this post, as I feel as if I am still working out the issues as I go.

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During the Blackball forum I also suggested that the Clark Labour Government may be seen by future historians as playing a key role in embedding neo-liberalism as it deliberately avoided changing any of the neo-liberal legislation or the aggressive 'free trade' policies of the forth Labour Government. Despite the country voting left in 1999, the Reserve Bank Act, the Public Finance Act, the State Sector Act and a strict orthodoxy of 'balanced budgets' remained. Even after nine years. Indeed it is significant that in his valedictory speech the former Labour Finance Minister Michael Cullen spoke of his pride in pursuing free trade agreements and maintaining a socially progressive but fiscally conservative party.

I respected Cullen's intellect and his wit a great deal, but I always thought his views on the inevitability and the desirability of the WTO version of the global market were simply pollyanna. While he did renationalise the railways, this was only after costing the country millions by entering into a failed public-private partnership with Toll Holdings in 2004. In 2003 he had the opportunity buy the railways on the cheap and to tell Toll to noddy off, but did not do so.

Beneficiaries need cellphones. Nat + Lab rght wng pollys sux

Letters from Work and Income telling debt ridden families to take out more loans and pawn off cellphones is more evidence of a mean and punitive culture within the organisation that neither major political party has done anything significant to change.

Its a little hard for a prospective employer to ring you if your cellphone is at the pawn shop.

While the letter approved an application for a Temporary Additional Benefit it also suggested some rather obnoxious additional steps to be taken.

• Taking out loans to cover arrears (in other words talk to a loan shark)
• Pawning cellphone and children's playstation
• Ringing debtors to reduce payments or refinance debt (in other words talk to a loan shark)
  
• Seeking budgetary advice
  

It was good to see Social Development Minister Paula Bennett quickly dismiss the practice when she was questioned about it in Parliament yesterday. One wonders if some of her National party colleagues may have been less quick to do so.

The issue was raised by former Labour party minister Annette King, yet it was the decision of the former Labour government to abolish the special benefit that largely created this situation. The 'replacement' Temporary Additional Support (TAS), placed more restrictions on emergency support - removing a degree of discretion the special benefit made available to WINZ staff. In essence Labour were telling WINZ staff they had to be tougher on beneficiaries.

In March 2008 Green MP Sue Bradford explained how Labour's April 2006 changes led to more beneficiaries being forced to susist within "an endless cycle of debt".
"Up until that point the special benefit had provided a third-tier level of last ditch discretionary assistance for people in the situation where the gap between their actual income and the necessities of life was too high to bridge by any other means. With benefits remaining low and even some low-wage workers requiring assistance from Work and Income, the special benefit played a key role in allowing case managers a way of topping up people’s benefits to liveable levels."

One will certainly end up in even more of an endless cycle of debt if your case manager is telling you to take on more.

In order to be eligible for TAS "cash assets" held by a person can not exceed a prescribed amount. Cash assets as defined in the 2005 Social Security Regulations includes cash and "other assets of the person that can be converted readily into cash". Motor vehicles, caravans and boats worth less than $2000 are excluded from the calculation, as are 'personal effects', however cellphones are not specifically excluded. Nor are student loans, even thought WINZ have attempted to claim this as "cash" in the past.

Later Social Security Regulations added further exclusions, suggesting the TAS is simply poor policy. Its worth noting that following the election National passed another such regulation to exclude ReStart payments.

A history of the special benefit by Advkit Para Legal Services reveals that in 1994 Labour (including Clark, Cullen and Maharey) strongly criticised the decision of the then National Government to restrict the discretionary nature of the special benefit, yet in Government Labour abolished it completely.

While Labour may have raised the issue in the house, in fact it was nothing more than their own right wing Blairite welfare policies coming back to haunt them. Policies that National also supports I might add.

Labour is complicit in National's work-for-the-dole madness

The Standard highlights the likely implications of National welfare spokesperson inviting an Australian work-for-dole 'provider' to visit New Zealand. National plans to give them business by introducing work for the dole if it becomes the Government.

While Collins adopts the key approach of 'deny deny deny', Mission Australia's chief executive is keen to cross the Tasman.

Steve Pierson at the Standard is right when he describes work-for-the-dole as a nice sounding slogan that does not work in practice. In adopting such a policy "National is following ideology, rather than doing what makes sense."

But there is a problem with this analysis. The fact is that Labour adopted significant assumptions of the underlying ideology behind work-for-the-dole when they passed the Social Security Amendment Act. I have blogged on similar issues before. As Louise Humpage and Susan St John point out this amendment changed the fundamental purpose of the Social Security Act.

"[T]he Social Security Amendment Bill wipes away any notion that our social security system is about ensuring everyone can participate as citizens. Instead, it makes getting people into a job, any job, the fundamental duty of citizenship. This principle is baldly stated “Work in paid employment offers the best opportunity for people to achieve social and economic well-being”.

Even worse, the new Act allows for pre-benefit activity to be completed before a person can even apply for an Unemployment Benefit. So thanks to Labour, National will not even have to change the law to bring in work-for-the-dole, they can just pass a regulation to require registration for make-work schemes as part of 'pre-benefit' activity.

It is an irony that the right make so much of the 'excess' jobs offered by NZ Rail prior to corporatisation in the 1980s, when these jobs where of far more value to society than the neo-liberal work-for-the dole schemes, of the late 1990s, and of the early 1930s. In his book 'The Slump' historian Tony Simpson described how this philosophy and practice failed to address the demands of the depression.

"By and large it reflected the 19th century viewpoint that anything for nothing would be instantly exploited by the unscrupulous and feckless poor. The circumstances of giving must be unpleasant as possible and it must never amount to more than the lowest wage available otherwise it will encourage sloth."

The 1930 Unemployment Act provided for a sustenance payment of 21 shillings a week to unemployed men, with an additional 17s and 6p for a wife, and 4 shillings per child (even though working women contributed, they were not eligible). This was financed by a poll tax - in effect it was a compulsory insurance scheme.

"These rates were never paid. Instead, the unemployed were referred to local authorities, which were instructed to provide work and granted subsidies from taxation with which to pay the workers involved. A stern instruction accompanied this scheme. No one was to be given payment unless they actually reported for work. This led to ludicrous, even scandalous, situations where local authorities scrambled to create work which was clearly unnecessary or even useless (such as shifting sandhills from place to place)."

If local authorities could not create work payment was withheld. Despite this example being from the 1930s it still demonstrates the weaknesses of a work-for-the-dole policy, and how it can lead to further retrenchment. The work involved is either going to replace genuine jobs or it is not. If not, this can only mean sandhills. If a government (or a private provider) is inclined to cut 'benefit' costs further, restricting the amount of 'work' available becomes a very handy way to do this.

Its not just the Social Security Amendment Act. Consider Sue Braford's analysis of Steve Maharey's 'Jobs Jolt' policy from 2004.

"In this context, for those people who are living in poverty, on wages and benefits which aren’t enough to sustain a remotely decent standard of living, the ‘Jobs Jolt’ means little more than increased harassment by the State in a situation where there are still far from enough jobs to go around....This is why I view the ‘Jobs Jolt’ and the thinking behind it as intrinsically right wing, fundamentally unjust from a social equity perspective, and a clear signal that Labour is far keener on picking up votes from the beneficiary-bashing part of the political spectrum than it is from low income workers, unemployed people and beneficiaries, and those who support their right to jobs and a living wage.... Overall, I sense that the Government’s lurch to the Right on welfare as epitomised by the ‘Jobs Jolt’ is a product of their lack of any cohesive ideology or coherent thinking about solutions to structural unemployment, endemic poverty, a failed, fractured welfare system and an entrenched and increasing gap between rich and poor in Aotearoa New Zealand. "

In other words, the circumstances of giving must be unpleasant. If the Nats introduce work-for-the-dole it will be a logical extension of Labour's own policy, or perhaps lack of one. If Labour had wished to vanquish work-for-the-dole to the historical dustbin it belongs, perhaps it should have made more effort to challenge the neo-Victorian attitudes underlying the ideology of work-for-the-dole.

In 1938 Labour's proposed Social Security Bill was the centrepiece of its election campaign. The National party called it 'applied lunacy', a bribe and a cheat. Labour not only won a majority, it won a majority of the votes cast - a first in New Zealand history.

Note: Made a small edit when I established Mission Australia are technically a charity rather than a private company. That will teach me for blogging too late at night. If National devolves welfare delivery to the charities sector it will like going back to a pre-1930s situation!

Go Go Go Child Povery Action Group, Boo Labour

There was some good news on the box tonight. The Human Rights Review Tribunal has begun to hear the case bought against the Government by the Child Poverty Action Group that the Working for Families programme discriminates against the children of beneficiaries.

The case centres around the the In-Work tax credit, worth around $60 a week. The Labour-led Government excluded beneficiaries from being eligible for this payment. CPAG say this is illegal discrimination because it is Government assistance given only to a select group. 220,000 children from beneficiary families currently miss out.

The Working for Families policy assumes that parents use the money to help with the costs of raising families. How can it be fair that children of beneficiaries are denied $60 a week on the basis of the source of their parents income? Are the Labour party seeking to encourage a new pester power, as in Mummy why don't you get a job? How can it be fair that families lose the $60 a week when a parent has the misfortune to be made redundant?

Prime Minister Helen Clark attempts to defend Labour's policy by claiming Working for Families has lifted 130 thousand families out of poverty. Even though Working for Families has improved the lives of many families, New Zealand's child poverty figures would suggest Clark's claim is somewhat of an exaggeration. Particularly when the Working for Families policy deliberately excluded the very poorest - beneficiary families. Clark also claims "[s]ince the in-work payment came in for the first time we've got the numbers on domestic purposes benefit going down, thats a great thing because it means we have more children seeing their parents going to work everyday to earn a living." Now Helen, can you please tell me how this is the fault of the children?

This and other comments made at the time by of the introduction of Working for Families make it clear that a key policy objective of Working for Families was to increase the difference between the incomes of those on a benefit and those in (low) paid work. The same policy principle underlay Ruth Richardson's 'Mother of All Budgets' in 1991, where Ruth Richardson slashed benefits. Despite making many complaints about these cuts in opposition, Labour have never made any real effort to restore benefit levels in 9 years of Government. Labour ensured beneficiaries did not get any benefit from the tax cuts announced in the Budget, which will only make the situation worse.

The Government's own Ministry of Social Development now say beneficiaries are now worse off now than they were under National in the 1990s. With such a record Labour do not deserve the support of beneficiaries, but neither do National as they have said they are happy with benefit levels as they are now. In contrast, the Greens have given consistent support to beneficiaries in Parliament, despite a great many beneficiaries continuing to support Labour out of habit.

In her recent speech on the 2008 Budget Green MP Sue Bradford said
"..,Dr Cullen certainly has a different understanding of labour history in this country than I do. I had thought that the first Labour Government under Michael Joseph Savage swept to power in 1935 as a result of the mass unemployment and poverty suffered through six years of the Great Depression. It was unemployed workers together with their comrades still in work who helped create and drive the great things Labour did in those early days, including taking the first steps towards getting a decent welfare system into place, and I see this generation of Labour’s approach to beneficiaries as a real betrayal of that proud history."

By excluding beneficiaries, Working for Families becomes an effective subsidy to underpaying employers. While many on the right such as Labour and National promote the virtues of a free market economy, they want to ensure the right of employers to offer underpaid jobs as a forced sale. If workers want higher wages, they should support CPAG's case against the Government, as giving low paid workers the choice to tell underpaying employers to go to hell is one way to ensure wages in New Zealand are lifted for all.

PS: It is an irony that my very first post on this blog, now four years and a few days ago, I criticised Labour for making cynical use of the Bill of Rights Act to justify a cut in student allowances, at the same time they were defending the continued discrimination of parental income tests on the basis of age on the grounds it would cost them too much money to do otherwise.

Make Poverty History in New Zealand

A nationwide campaign is underway to combat poverty here in Aotearoa, by increasing the wages of the lowest paid workers.

The objectives of the campaign are:
- Set the minimum wage at $12 per hour
A single wage earner working a 35 hour week should be able to bring in enough money to support a family
- Secure hours of work
These workers often face big fluctuations in hours from one week to the next so their income goes up and down like a yoyo too!
- Abolish Youth Rates
This is where young people under 18 are paid less than adults despite doing the same work - many employers exploit this law

A private members bill to abolish youth rates will be presented to parliament on the 15th of February by Green MP Sue Bradford.

A public rally will be held at the Auckland Town Hall at 2pm on Sunday the 12th of February, where fast food and other low paid workers will give first hand accounts of the effects of poverty-wages, age-based pay discrimination and insecure hours.

On Monday 13 February the Trade Union Centre in Christchurch will host a public meeting at 7.30pm in support of the SuperSizeMyPay campaign and Sue Bradford's Minimum Wage (Abolition of Age Discrimination) Amendment Bill. Speakers include Sue Bradford, Lynda Boyd (Unite Union/NUPE) and Paul Watson of the National Distribution Union.
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It ought to be pointed out that asking for a minimum wage of $12 an hour is actually a pretty moderate and reasonable demand. According to International Labour Organisation (ILO) guidelines the minimum wage levels of member countries should be set at two-thirds of the average wage. As the average wage in New Zealand is now around $21, this means the minimum wage should be set at $14 now, if we are to get anywhere near ILO standards.

Watching the extended version of McLibel documentary the other day I came across a very telling little tidbit.

In 1971 McDonald's founder Ray Kroc made a $250,000 donation to the controversial 1972 presidential campaign of Richard Nixon. It is likely this donation was investigated during the Watergate corruption scandal.
"Passages in the 'Behind The Arches' book (written with McDonald's backing and assistance) state that the donation came around the very time that McDonald's franchisees were lobbying to prevent an increase in the minimum wage, and to get legislation (dubbed 'The McDonald's Bill') passed to be able to pay a sub - minimum wage to some young workers."

While McDonalds in New Zealand do deserve some credit for being one of the few fast food employers not to pay youth rates, the wages they pay are still low and the job itself is by definition a 'McJob'.

The fact that Kroc gave cash to crooks to keep wages low speaks volumes about the anti-union, anti-worker culture of the fast food industry.

Update: Aparently McDonalds introduced youth rates for 16 and 17 year olds 2 years ago, and claimed they adopted youth rates because their competition used them. Scumbags! All this does is demonstrate the need for youth rates to be abolished.

Categories: Politics, New Zealand, Poverty, Corporates, Industrial