Category: C. Wright Mills

I am so sick of this obvious lie, pt 2

Unemployment under Lab and NatAnother obvious lie too many National supporters believe is that Labour are bad for employment (because they raise the minimum wage too fast), and National have “solved unemployment” (because they’ve made it harder to maintain benefits):

National supposedly solved unemploymentkey labour anti jobs party

Now, it is true that Labour raise the minimum wage much faster, and that National cut welfare (in a recession!). But the unemployment rates have been more like the other way around,* and anyone suggesting National are better than Labour at keeping unemployment down is either believing or promoting a lie.

Actually, it’s a couple of lies… but they’re both obviously bollocks to anyone who’s spent five minutes looking into them:

LIE 1:

“Raisng the minimum wage reduces jobs”

TRUTH 1:

Sydney Morning Herald

new york times

Business Insider

CEPR 1

CEPR 2

DOL 1

DOL 2

treasury

As usual, Gordon Campbell says it best:

If, as Key claims, Treasury has done research that shows major job losses would result from gradual increases in the minimum wage, then this amazing information would be world news – because the vast weight of academic research around the world ever since the groundbreaking David Card/Alan Krueger work in the US fast food industry 20 years ago, is that it would do no such thing.

LIE 2:

“National have solved unemployment by making it harder to get the benefit”

TRUTH 2:

I’ve covered this before, and so have many others. Basically, kicking people off the dole (or DPB/invalid’s/sickness benefit) doesn’t magically put them into jobs; it just increases the number of people lacking either work or welfare (which has hit a record 110,000 since National’s bennie-bashing “reforms”). Creating a desperate unemployed person doesn’t create a job for them to go into.

This confusion arises from a basic failure to understand the difference between individual problems/solutions and socio-economic problems/solutions, as sociologist C. Wright Mills pointed out 55 years ago:

Mills quote

* It started to get bad under the Lange (& Douglas) Labour government, which was actually more like a Bolger/Key National government than a Labour one. Of course, just like with debt, things are more complicated than one graph could show.

PS: Graph and truncated y-axis from tradingeconomics.com; annotations mine.

The central message of “welfare reform” – and why National needs to miss the point

(This is part two of a two-part series on the current “welfare reform” policy – part one is here)

I have a friend who says that Paula Bennett‘s welfare policy is fine, and it’s not beneficiary-bashing, because if you (only) look at the individual policies, they’re not really as bad as they first appear; some of them are quite reasonable and even potentially helpful.

I think this is quite generous.  There may be things that can be done on an individual level to help beneficiaries and reduce their reliance on welfare, but these aren’t constructive or intelligent measures; I take issue with how hypocritical, worryingly controllingcontrived and just plain stupid they are, the effects on children in poverty, and the fact that overall they add up to welfare cuts.

But these specific policy effects are only part of the picture of welfare reform. We need to look at the entirety of what is being communicated if we want to understand “welfare reform” and its relationship to the phenomenon of “benny-bashing”.

The essential message of “welfare reform” is: The problem is with beneficiaries themselves. If someone can’t get a job it’s because they don’t have the right skills or attributes, not because there aren’t enough jobs to go around; if they’re not in paid work on top of raising a family and running a home, they’re leeching off the system, not making a choice mothers with partners are allowed to make; and if they don’t want to do a certain job it’s because they don’t have the right attitude, not because that job is dehumanising or abusive.

Of course, this message is a lot more subtle than the populist sentiments simmering just beneath the surface of the rich, the working poor and anyone who hasn’t had to rely on welfare themselves. Rather than saying beneficiaries are lazy, incompetent, drug-addicted, child-abusive, over-breeding criminals who think the government owes them a living, Bennett talks of an “investment approach” to welfare and unveils special new rules for beneficiaries only, to make sure they’re not taking drugs, opting out of optional early childhood education, having any more children, or refusing any job offer whatsoever.

It is indeed true that the actual policies are slightly gentler than the shriekings of talkback radio and internet comments. But the policy announcements still have the effect of dog-whistling support for these populist sentiments. In fact, she’ll often back down from earlier extreme statements; a shrewd strategy that allows her to satisfy our benny-bashing instincts, but then also satisfy our more reasonable natures that the policy isn’t going to be quite so harsh as it seemed.

So it’s clever politics, in that it allows National to affirm its identity as smart and careful with money, and tough but fair when it comes to the dole-bludging strawmen who are the main target of New Zealand’s two minutes’ hate.

Either way, it’s still repeating the essential message that it’s the beneficiaries who have the problem. But this is simply insufficient to explain why four years ago unemployment was the lowest in decades, and now it’s rapidly approaching 80s and 90s highs.

Sociologist C. Wright Mills used high unemployment rates as an example of something that cannot be properly understood or solved on a purely individual level; instead a “sociological imagination” is needed to connect personal problems with public issues.

The most obvious “public issue” at play here is the global financial crisis and recession. Our worst periods of unemployment since at least the 80s have all followed periods of negative economic growth; compare this with this.

Paula Bennett actually admitted in April that there simply aren’t enough jobs in the current economic climate. Bill English certainly knows this, and is trying to get us back to economic growth by following the dubious neo-liberal formula.

Of course, this will only be a temporary solution until the next recession brings another wave of unemployment. A more long-term solution would be to address the economic system itself; to change the way the economy operates so that it doesn’t rely on periodic bouts of recession and unemployment. As Mills put it; “In so far as an economy is so arranged that slumps occur, the problem of unemployment becomes incapable of personal solution.”

Unfortunately, this government is not about to challenge the basic shape of the capitalist system, or even its recent neo-liberal form. In fact, the current National party are the ideological progeny of the neo-liberals who argued in the 80s and 90s that unemployment is good, because it keeps wages low, which is great for business.  They might not make such bold statements nowadays, but they still believe that an underpaid and desperate workforce is what we need to bring about the utopia of economic growth.

To really solve unemployment would require the government to re-think their entire philosophy that says that unbridled capitalism is our lord and saviour – not the cause of problems like unemployment.

So they do what dominant groups have done throughout history when they don’t want to address societal issues in a way that might challenge their way of running things… They scapegoat marginal individuals for the problems of the whole society, and consolidate power by uniting the majority against these scapegoats; in this case beneficiaries.

It makes perfect sense why they’d do this; it’s the best way for National to gain politically out of the situation, even if nobody else does. But with rising unemployment, record inequality and obscene child poverty, blaming and punishing the victims is not the kind of welfare “reform” we need right now.