Workers expected to pay for capitalist crisis

John Key’s much vaunted jobs summit is over. The ministerial limousines and corporate cabs have left the South Auckland venue, the TV cameras have packed up and the cardboard lunchboxes have been recycled. Most participants have returned to their mansions in flashier parts of New Zealand.

It certainly wasn’t a cross-section of New Zealand. The faces were predominantly white, middle-aged and grey-haired. They came mainly from the corporate sector and would normally look uncomfortably out of place in South Auckland where the government chose to hold the event.

But all in all it was a tidy political affair for John Key. The keynote speakers were safe choices and noone tried to upstage the government. The message was that the government cares about the hurt faced by those who’ve lost their jobs and those whose jobs are at risk.

Aside from the obvious irony of a summit to discuss unemployment held in the highest unemployment area of the country but attended by well-heeled imports from anywhere but South Auckland, the most interesting feature of the meeting was the absence of any discussion about what has caused the crisis. By all accounts it didn’t get a mention.

Reserve Bank governor Alan Bollard restricted himself to a vivid description of what the loss of paper wealth has been over the past year with apparently a line of dollar bills going end to end to the sun and halfway back. John Key pledged to be pragmatic and avoid a talk-fest.

But if anyone did ask the question “what caused the crisis?” there were no answers provided despite tens of thousands of New Zealanders expected to lose their jobs, their homes and their livelihoods.

It’s effects will be greater than the biggest crime wave we’ve ever seen but there is not even talk of a ministerial inquiry. The unsaid message was the crisis is a natural event – no different from a tsunami or an earthquake. But this is very different. It’s a man-made financial crisis.

It seem that words like greed, fraud, stupidity, hypocrisy, recklessness and corporate malfeasance were too close to comfort for most of the summit participants.

National Distribution Union secretary Laila Harre pointed out that among the attendees were Stephen Tindall who, while talking of saving jobs in the summit, is progressing with plans to cut up to 1000 jobs in the Warehouse chain. Likewise with Telecom CEO Paul Reynolds and Air New Zealand’s Rob Fyfe who have big plans for redundancies in their own businesses.

Nowhere at the summit was there a call for these companies to set aside their restructuring and help New Zealand families through the recession. Instead these companies are working to maximise the return to their shareholders rather than maximise jobs for those who made these companies what they are in the first place.

Once the dust and hubris cleared we were left with three big ideas the government says they will take further – a nine-day working fortnight, a public/private equity fund for businesses to borrow from and a cycleway to go the length of New Zealand.

The first two are predictable. Both involve proposals for the burden from the crisis to be put on the shoulders of working New Zealanders who it is suggested should face up to 10% loss of income while also providing bailout funds through taxation for the government to give to their employers.

The New Zealand workforce are getting the worst of both worlds. Over the past decade big business profits increased at twice the rate of workers’ wages. It should be no surprise we have such a low-wage economy. Having missed out in the good times workers are now expected to bear the brunt of the recession.

It’s unfortunately a common phenomenon under our capitalist economic system. Those that caused the crisis expect those with the least resources to pay for it.

The third big idea is an excellent proposal. A cycleway the length of New Zealand would be an asset for the future. It’s the sort of idea which would have been rubbished if the Greens had suggested it but because it was a businessman it’s insightful logic has been seen and welcomed by the Prime Minister.

There will inevitably be some parochial wrangling over the route but I hope it gets going quickly before some self-serving entrepreneur offers to build and fund it by charging tolls.

The world is full of self-servers and there were plenty at the summit. The only question remaining is why did the government bother to hold it in South Auckland instead of at the Sheraton?