Continuing crises are what this system is about

By Mike Treen, Unite Union National Director

(Reprinted from The Daily Blog)

The decision of the US Federal Reserve to end its programme of “Quantitative Easing” signals a desire for a return to monetary “normalcy” in capitalist policy circles. The announcement was made on October 29, the anniversary of the 1929 crash on Wall Street—triggered by a previous series of monetary tightening measures by the U.S. central bank that ushered in the Great Depression of the 1930s.

But the world capitalist economy today stands at a critical juncture that is far from normal.

Stagnation is the order of the day across Europe. Output remains two percent below the peak reached in 2008 before the financial crisis and great world recession. Investment remains 15 percent below 2008 levels. The European central banks and governments are now instituting their own forms of monetary loosening after years of austerity in an attempt to jump-start the economy and escape a deflationary spiral. A similar picture exists in Japan.

A classic crisis of overproduction

The world economic crisis of 2007-09, a classical capitalist crisis of overproduction, was by far the worst since the crisis 1929-32. Like all such crises it was preceded by an explosive growth in credit as the capitalists sought to escape the basic laws of economics and produce more commodities than the market could absorb. But in the end, interest and principal must be paid and when it cannot interest rates rise, the bubble bursts, credit contracts and the economy enters a new recession. Capitalism has had this process repeat itself regularly for nearly 200 years, and yet the pro-business economists and media commentators always seem surprised.

NZ – Inequality and poverty measured

By Mike Treen, Unite National Director

(Reprinted from The Daily Blog)

The Household Incomes Report by the Ministry of Social Development (MSD) are providing powerful evidence that New Zealand is a deeply unequal society with intractable levels of poverty that includes many with jobs as well as those without.

The reports which are produced annually cover changes in household income since 1982. This is very useful as it covers the full period from the beginning of the so-called “neoliberal” assault against working people in the interests of big business. It registers a steep decline in living standards for working people, a rise very rapid rise in inequality and a trebling of poverty rates from the mid 1980s to the mid 1990s.

Low-Wage Workers of the World, Unite!

The following article is an important look at the struggle of fast food workers around the world from the viewpoint of socialist theory. This involves understanding the growing importance of these types of jobs in capitalist economies and what role these workers may play on getting rid of capitalist exploitation. There are some significant theoretical issues that are raised by the authors but they are worth studying – including by workers in these industries. As a union leader at Unite Union in New Zealand which represents over 3000 fast food workers I know it will help me in understanding my enemy and defeating him.

It is reprinted from the blog A Critique of Crisis Theory. Anyone who is serious about understanding and overcoming capitalism today should follow this blog.

Mike Treen, National Director, Unite Union, NZ.

On May 15, 2014, a worldwide strike of McDonald’s workers involved workers in at least 33 countries, both imperialist and oppressed.

While participation in the strike varied, and most workers who participated were out for only an hour or so, this was a historic event all the same. It points the way forward to a far more internationalist future for the workers’ movement. To understand why this is so, we have to examine long-term underlying economic changes making the low-wage movement both possible and necessary.

Why raising the minimum wage won’t make prices go up

By Mike Treen, National Director, Unite Union

Every week we come across bosses arguing that that “can’t afford” a pay rise for their workers. Right wing economists and commentators also argue against an increase in the minimum wage because it will only lead to a rise in prices and therefore cancel out any temporary gain.

Sometimes even workers or labour-friendly economists repeat the same tune when discussing whether it is a good idea to raise the minimum wage.

I want to use the experience of the fast food industry to explore the truth of these claims. Recently, I travelled to the US to be part of an international fast food workers meeting. We discovered that there was little relationship between wages and prices in the industry when comparing different countries.

The highest paid workers were from Denmark. They are paid the equivalent of $US21 per hour and have a guaranteed 40-hour week. In the US, most workers were on the legal minimum of $7.25, or just above. Yet the “Big Mac” in both countries costs about the same.

TPPAwatch Another trade deal that threatens democracy – TISA

TISA – the secret treaty to destroy public services Recently we wrote you about two giant investment treaties being secretly negotiated between governments and corporations, the EU-US TTIP and the Trans-Pacific Partnership Agreement (TPPA). Our brochure Trade Deals That Threaten Democracy exposed the corporate power grab behind these two mega-treaties and the huge impact they would have on our lives and on future generations. We asked for your support to expose and defeat these instruments for enforcing corporate rule. TTIP and TPPA are not the only treaties being cooked up secretly. A new report from our sister organization Public Services International exposes the threat to public services in the secret negotiations around the proposed Trade in Services Agreement (TISA) driven by a group of countries calling themselves "The really good friends of services" whose rich core includes the US, EU, Japan, Canada, Australia, New Zealand, Switzerland and South Korea.

The politics behind the minimum wage rise

By Mike Treen
National Director, Unite Union

(Reprinted from The Daily Blog)

The government decision to increase the minimum wage by 50 cents was an interesting decision on a number of levels.

$14.25 is clearly not enough to live on – especially given that minimum wage workers often also work in industries that have no guaranteed hours week to week.

An immediate increase to $15 an hour and then a staged increase over the next few years to the CTU target of 66% of the average wage would have been more reasonable and done something to put a dent into the gross inequality and low wage culture that operates in this country.

69% of Kiwis back $15 or more minimum wage – poll

(From One News TVNZ)

The adult minimum wage is going up to $14.25 – but a poll shows nearly half of Kiwis want it raised to $15.

The current rate of $13.75 an hour will be increased 50 cents from April 1, meaning a rise for around 100,000 New Zealanders who earn the minimum wage.

The training start out wage rate for young newcomers to the workforce also increases from $11 to $11.40 an hour.

The first ONE News Colmar Brunton poll this year asked New Zealanders whether they support increasing the minimum wage to $15 per hour. Forty-six percent said “yes”, 23% supported more than $15 an hour and 16% support a rise of less than $15.

Prime Minister John Key argues increasing the minimum rate higher than $14.50 would mean job losses.

“The bottom line message is we’re trying to balance the capacity for businesses to pay a bit more and for people to earn enough to live,” Mr Key says.

Labour renews $15 promise

The Government’s increase puts it within striking distance of Labour’s $15 election promise.

“In our first hundred days we will lift it to $15 and we will move it again within our first year,” said Labour leader David Cunliffe.

Business leaders are comfortable with the minimum wage increase, which is above the rate of inflation.

Employers and Manufacturers Association CEO Kim Campbell says the increase is a lot less than “the silly numbers we’ve heard bandied about” for a living wage which would mean a $5-an-hour rise.

“It is coming in small increments, so industry will probably be able to cope with it,” he says.

But living wage campaigners, who argue for $18.80 an hour, disagree, Annie Newman of the campaign saying the increase is very disappointing.

She says the Government “should have taken a much bigger step than that” at a time when the economy is growing and we’re being told that workers are going to reap some of the benefits of this.

‘Certainly some relief’

ONE News political editor Corin Dann says the increase is certainly some relief for those on the lower income.

“As for timing, well it is election year,” Dann says, pointing out that this year’s annual increase is a little more than the rate of inflation.

“And remember the economy is doing well. So that does raise questions about whether they have raised it enough.”

Real wages – the brutal truth

By Mike Treen

(Reprinted from The Daily Blog)

The National Party has been caught getting their numbers wrong over the decline of real wages on their watch by the Green Party.

Last week, Green Party leader Dr Russell Norman pointed out that wages and salaries have risen by less than inflation during the term of the National government according to Statistics NZ’s Labour Cost Index.

Russell Norman speaking to the launch of Unite Union’s Living Wage petition

Economic Development Minister Steven Joyce accused Dr Norman of “making stuff up” and claimed that an alternative measure called the Quarterly Employment Survey (QES) is a better measure.

Statistics NZ however disagrees. They say “if you are interested in changes in earnings across time, the Labour Cost Index (LCI) is a better measure than the QES”. The QES measures the average wage paid. But averages can be pulled up by a few getting a big pay rise or by low paid workers becoming unemployed. It was true that in the late 1990s well-paid professions continued to do reasonably well while some (lawyers, accountants, doctors) did very well. So the average may have risen while the vast majority earned below the average.

Two-thirds of wage and salary earners actually earn below the NZ average wage of about $28.03 an hour.

Over the long term real wages fell by about a quarter in the late 1980s and early 1990s and have never recovered since.

The official statistics confirm that over the last three decades wages have failed to keep up with inflation – at least for the big majority of workers. Rather than wage increases pushing up prices, wages have unsuccessfully lagged behind price increases.

I did the following graph which showed a steady rise in real wages from 1957 to 1981. During nearly that whole period unemployment was only 1-3%. But the bosses organised a fight back that has pushed real wages back down to levels previously reached in the early 1970s.

Even if we use the QES figures favoured by Steven Joyce then the recovery in average real wages has been less than the previous decline.

The following graph covers the same period as mine but is from a couple of quite right wing economists who use the same data sources as mine for the period 1957-1992 but (naturally) prefer the QES rather than the LCI for the period since then.

This real wage index is based on a measure March Quarter 1978 = 1000

Right wing blogger makes fool of herself

By Mike Treen

A right wing blogger has made a fool of themselves trying to dispute figures first revealed by me in the Dailyblog about how a huge gap had grown up between the number on benefits and the number being recorded as unemployed or jobless in the household labour force survey. She was replying to a column by my colleague Matt McCarten in the Herald on Sunday.

She did a crudely hand-drawn graph allegedly showing that if you combined the numbers on the unemployment benefit with the number on the sickness and invalid benefit you get a completely different picture. Well that is true with a hand drawn picture. However, if you actually use the official numbers from the Department of Statistics website and use an excel spreadsheet to draw the graph the picture is a little different (actually a lot different!).

Here is her graph.

She commented:

The purple line represents the number unemployed; the green line the number of people on the unemployment benefit. But what does it look like if I add the line representing people receiving a sickness or invalid benefit?

Rose-tinted view cruel fairy tales

By Matt McCarten

(Reprinted from the Herald on Sunday, Februiary 2, 2014)

Winz Office. Many unemployed not receiving unemployment benefit

This Government manipulates statistics to show how well the economy is doing and most of us swallow it.

The manufactured consent is the economy is booming and the number of unemployed is at record lows.

Here’s my unease with the unemployment success story. There isn’t a week I don’t meet jobless people who are seeking work yet receive no support from the state.

Many friends and extended family are hardworking people who tell me they don’t register with Work and Income NZ because they claim they are hounded by officious bureaucrats and made to feel like something icky on the aforementioned’s shoe.

The stories are too numerous to convince me there isn’t a calculated policy to make it humiliating for workers down on their luck to apply for assistance.