The unemployed are victims of a structure that guarantees they are unemployed, Anaru Eketone writes. Photo / NZME
The unemployed are victims of a structure that guarantees they are unemployed, Anaru Eketone writes. Photo / NZME
OPINION:
Politicians have conditioned us to believe unemployment is the fault of the unemployed. We have been convinced there are plenty of jobs out there and if you are not working it is your own fault.
Certainly, there are people who are not that keen on working, but these would be very few indeed, because no one aspires to get out of poverty through the benefit.
The recent announcement by the Reserve Bank of a rise in the Official Cash Rate brings this belief in the unemployed getting what they deserve into question. What was confirmed is that for inflation to drop, interest rates need to rise and correspondingly, unemployment also has to go up.
Apparently, the New Zealand economy has been operating close to, if not over its Maximum Sustainable Employment level (MSE). The MSE is a rate of unemployment that does not have an adverse effect on New Zealand’s inflation rate. The problem is that if unemployment gets too low, it means wages start to rise faster and that adds to inflation.
So essentially, for our economy to be stable, it needs to have a certain level of unemployment to put pressure on wages so that they do not rise faster than the economy can handle. Yes, you read that correctly, our economy needs to have a certain percentage of people unemployed to help keep inflation under control.
It is in no one’s interest to have inflation go up faster than wages, particularly when it is the poor who feel the effects of inflation the most. However, it is outrageous that the unskilled, poorly educated and often browner part of our community are in effect subsidising the economy for the rest of us.
Anaru Eketone. Photo / Supplied
They are sacrificed on the altar of capitalism, because in order for neoliberal economics to work it needs a built-in sacrificial lamb of the unemployed.
The cruelty is that many are unemployed and destined for poverty because it is a conscious choice by governments to keep pressure on low wages to keep inflation down. Governments don’t tell us this, especially right-leaning governments who seem to love demonising the unemployed, accusing them of all sorts of character flaws.
Instead, governments are provided with minority groups like Māori and Pasifika who bear the brunt of this policy of unemployment.
While researching historic unemployment rates I found that in 1992, the New Zealand unemployment peaked at a rate of 10.5 per cent but this was overwhelmingly dominated by a Māori unemployment rate of 26 per cent. How cruel, then, were the benefit cuts of that era that kicked people when they were down telling them that they were bludgers when in reality they were subsidising the economy.
In 1998 New Zealand was in another recession following the Asian financial crisis. At the time, I was involved in a Safer Community Council funded by the Crime Prevention Unit run directly out of the office of the then Prime Minister. We wrote to the unit asking what the link was between crime and unemployment.
Their response was stunning. They answered that there was no link between crime and unemployment. However, they did admit that there was a link between crime and welfare dependency and poverty. We couldn’t believe that a government could be that cynical.
However, there is a logic to a reluctance for a government to admit to a link between crime and unemployment. If the economic system upheld by the government needs a certain number of unemployed to keep wages and inflation down, and they admitted there was a link between unemployment and crime, then the government and society are culpable for a degree of the crime we suffer.
The unemployed are disposable and worse than that, we can place their lack of success and its consequences entirely on their own shoulders. We can disparage them, stigmatise them and let them suffer in unescapable poverty, because to do otherwise would admit how corrupt our system is that it requires those in poverty to prop up our economic system.
So what should be the outcome of our economy hitting its Maximum Sustainable Employment level? Is it to ensure beneficiaries have a liveable income, do we provide targeted training to prepare them to be job-ready, or do we recognise the importance of the unemployed and so remove the stigma?
No we don’t. Instead National Party politicians suggest we open up the borders to bring in more unskilled immigrants to work for lower wages, ensuring the long-term unemployed stay there so that their unwilling sacrifice can help keep inflation down.
The unemployed are victims of a structure that guarantees they are unemployed.
Their poverty is the price they pay for our structural need for unemployment and we mock them for it.
Dr Anaru Eketone, Ngāti Maniapoto and Waikato Iwi, is an Associate Professor in Social and Community Work at the University of Otago and has a background in youth work, community development, social work and health promotion.
