Wednesday, August 11, 2010

Stabbing that graph

I'm a bit disturbed at the language framing the welfare landscape in the text of the Welfare Working Group's interim report. Maybe the whole enterprise is flawed anyway. In much the same way Jim Anderton hobbled the Law Commission's review of drug laws by ignoring alcohol and tobacco (as well as taking a conservative interpretation of United Nations obligations), the Welfare Working Group has large blind spots contained within its terms of reference. Working For Families and Superannuation are off limits.

All the same there are some nuggets of interest within the document. I'm going to take a few stabs at that graph above.

First up green and pink, the Invalid and the Sickness beneficiaries. There's a big kink in all the trends smack bang on 1990. The Employment Contracts Act is the obvious culprit, but I would also include the Health and Safety legislation as an accomplice to the fallout. OSH was the safety nazis' second big victory, following the Smokefree laws passed in the Fourth Labour government's dying breaths.

Up until the Health & Safety in Employment legislation in 1992, it wasn't possible to classify someone as a health & safety risk. Sickness and invalid benefits, static prior to 1992, begins its inexorable growth with this change in risk perception. If any blame is to be placed on the level of sickness and invalid beneficiaries, it belongs with old Nat policies.

Another problem was the rise in employment and temping agencies, middlemen who became the strict gatekeepers to many jobs. It was no longer sufficient to be good at something. One now had to be a self-promotion expert in order to gain so much as a foot in the door in this new world of American management theory.

Ever more complex tests were devised to sift through employment risk aversion strategies; Myers-Briggs tests, credit and police checks. Deeper and deeper intrusions into personal lives excluded more and more potential candidates, regardless of their essential competency for the position. Little wonder a subclass of square pegs found themselves too sick for this system, invalidated by the meaningless rigid compliance.

OK, let's turn now to those orange DPBers. It's a bit disingenuous of the Welfare Working Group to preach 1960 as a baseline. 1970 is where it all changed. In short, fem lib happened. The Pill became available. Germaine Greer published The Female Eunuch. NZ women slowly embraced the ability to choose their own destiny and not just as the disposable chattels of men.

The Domestic Purposes Benefit gave women and children financial independence to leave abusive men, or raise the kids if the men buggered off to Australia. Coming from a family where two generations of Mums and kids have been kicked out of home by the fathers, the DPB is a pretty important landmark as far as I see it.

It is also worth noting that current DPB levels are lower than when Welfare Minister Paula Benefit was on it in Bolger's 90's. Danyl at the DimPost also fairly reckons that Labour's policies such as the in-work tax credit did more to lower the DPB stats than any Nat policy ever did.

Finally, the grey unemployed bloc. 1975 was the first big blip, around the time of Britain's entry into the Common Market. Throw in an oil shock or two, some scary-ass inflation and Rob Muldoon, and there's a pretty steady rise in the unemployed. Not even the start of weekend shopping in 1980 could dent the rise in jobless. Then in the mid 1980's Rogernomics deregulates everything, sending unemployment soaring as the rebalancing starts.

And it hasn't stopped. The labour force has been casualised, outsourced and sub-contracted. Even the Mother of All Budget cuts by Ruth Richardson couldn't put a dent in the stubborn rise of the unemployment numbers during the 1990's. Indeed, the Bolger/ Shipley governments seemed almost to prefer an unemployment pool of around ten percent of the workforce to assist in the downward pressure on wage inflation. Something that the Key government looks similarly relaxed with.

The safety, security and stability that the baby boomers enjoyed, where many families could afford to live on a single income, has all but disappeared from anything below the NZ upper-middle classes. Women entering the workforce, while good and necessary on equality grounds, has diluted the labour pool, helping drive down wage growth. As Elizabeth Warren pointed out in The Coming Collapse of the Middle Classes, this generation is living on much thinner margins than its predecessors.

And as DimPost points out, all this mucking about with non-valids and solo mums is dwarfed by the humongous welfare costs associated with Universal Superannuation and Working For Families. The Nats and the Welfare Working Group best bear in mind some sense of proportionality when they write up their policy recommendations. Otherwise, it might all just blow up in their faces.