Economist – all calculator with no brain

There are plenty of jokes about economists and none of them are flattering. However the efforts of Massey University economist Greg Clydesdale last week brought this occupation to a new low of disrespect.

The joke repertoire should be expanded as a result but unfortunately reports of his work were largely lost in last week’s pre-budget media fog. This is a pity because his research and conclusions should be widely read and discussed, not because they are enlightening but because of the stupid, irresponsible assumptions he uses in his analysis.

Greg Clydesdale’s research uses a wide range of undisputed government data to claim Pacific Island migrants are creating an underclass and a drain on the New Zealand economy. He says they have poor education, poor health and higher unemployment than any other group. He went on to say Pacific people had “significant and enduring under-achievement” and that migration from the Pacific is making the problem worse.

Not content to stop there he said they are less productive and less likely to contribute to economic growth. They are less likely to start businesses and have lower rates of self-employment. They are over-represented in crime statistics and have higher rates of convictions and prosecutions. They are also more likely to be victims of violent crime and more likely to need Government assistance for housing and income.

He reached the nadir of his presentation saying that for him “of particular concern is the large Polynesian subculture whose educational achievements mean they will contribute very poorly in this regard and because of high fertility and current immigration levels, New Zealand will have a significant population that can contribute little to economic growth.”

It was a remarkable broadside against the Pacific community in New Zealand, delivered without qualification or reservation.

I have no doubt his figures are correct. He presumably knows how to use a calculator but at this level it tells us nothing new. We are all aware the majority of Pacific families are in the lowest socio economic groups in New Zealand and therefore share the negative statistics of all low-income communities. The important thing is that Pacific people are no different in this regard from other families on low incomes be they Pakeha, Maori, Asian or Pacific. 

This raises the more important question of why Pacific people are over-represented in low-income communities. The answers here are more complex and this is where Clydesdale could have made a useful contribution to public discussion. Instead he has confused issues of class and ethnic background. Armed with a pile of statistics, his trusty calculator and a big dose of lazy stupidity he lambasted an entire ethnic group. In the process he overlooked several elephants in the room.

A key assumption he makes is that a person’s contribution to the community can be judged by their income. This is particularly nauseating. The work done by those on or close to the minimum wage is always undervalued. Workers in cleaning, security and general labouring make as great a contribution to the community as anyone else and this can’t be measured by the wage they receive. Why would it?

Clydesdale’s insult adds to injury for these low-paid workers who are so often forced to sacrifice family life and social stability to work long, poorly-paid hours just to bring in enough money to keep their families above the breadline.

The natural follow-on is the assumption that well-paid people contribute more to the community than the lower paid. This is an equally stupid notion. Does anyone really believe that a shareholder who has never picked up a mop actually earns the dividend they are paid by the company which employs a cleaner on the minimum wage? Or that the Telecom Chief Executive contributes more to the economy than the technician who services the phone simply because the CEO has a multi-million dollar income?

It turns out Clydesdale is concerned about immigration and population growth. He says New Zealanders need to debate these areas without the fear of being labelled racist. Fair comment but how does his pathetic attempt to create some sort of ethnic hierarchy in economics help this debate? Instead he lazily skimmed the surface of an important issue and arrived at deeply offensive, completely erroneous conclusions. Instead of interviewing his calculator Greg Clydesdale would have done better had he started some vigorous debate about the value of work compared to the value of shareholder bludging.

Universities are charged under the law with the role of being the “critic and conscience” of society. Greg Clydesdale has dramatically failed in this role. He apparently plans to take his research to present at a conference in Brazil in July. He’d do better to stay home and save us the embarrassment with the added benefit of stopping economists becoming the butt of even more jokes.