Choosing to be poor

Written By: - Date published: 7:32 am, May 24th, 2011 - 24 comments
Categories: class war, economy, jobs, poverty, Unions, wages - Tags: , ,

The Herald reports some interesting comments made by prominent scientist, Sir Paul Callaghan:

Kiwis choose to be poor, laments top scientist

Kiwis are poor because they choose to be, says Sir Paul Callaghan, one of the country’s top scientists. This assertion was part of a series of attacks he has directed at the Government’s plans to develop the economy.

“The choice is as simple and as stark as this: New Zealanders like to work in low-wage activities. Tourism is a classic example. Or people thinking about growing wine and look it’s great, it’s a nice lifestyle, but frankly, the revenue per job is poor,” he said. …

However, Callaghan said the Government did not seem interested in boosting technology and innovation. “There is no political leadership around this. One of the sad things about the Budget is the signal the Government sends about innovation is that it’s actually one of Bill English’s like-to-haves, not a must-have. I’m not expecting us to ramp it up to OECD levels overnight in a time like this, but [the Budget] doesn’t gel with a Government that says ‘we want to lift per capita GDP’,” he said. …

Unsurprisingly, I agree with Callaghan’s assessment of the useless political leadership that we currently “enjoy”. The Nats are cutting everything, investing in nothing, and still expect some pixie-dust fuelled growth explosion to magically occur. It’s a cycle way to nowhere.

But what of the assertion that we’re choosing to be poor? Choosing to work in low wage activities such as tourism? Matter of fact I agree again. We do choose to be poor. But I suspect that Callaghan and I have very different reasons. The problem is not that we’re choosing to work in the “wrong” activities – what’s wrong with tourism? The problem is that our expectations are too low. We choose to be poor because we accept low wages.

Case in point, unions. Unions exist to take care of the ordinary worker. Most unionised workers are still getting pay rises, while most non unionised workers are not. And yet the rate of union membership in the workforce as a whole is less than 20% and falling. People, you’re choosing to be poor.

On a larger scale, governments. Left wing governments exist to take care of the ordinary people. Under Labour unemployment fell, wages (especially minimum wages) rose, and the gap between rich and poor began to narrow for the first time in decades. Children were being lifted out of poverty. The gender pay gap was narrowing. Health inequalities were narrowing. But in 2008 we vacuously decided, nah, it’s time for a change. And now the indicators are getting worse again. Voting for right wing governments? That’s just choosing to be poor.

On a cultural scale, bread and circuses. We are well managed and distracted by infotainment and advertising, conditioned to accept our lot. The “American Dream” has it that we should none of us worry about poverty, because all of us have the opportunity to strike it rich one day. What nonsense. There isn’t much social mobility about, even less as inequality systematically rises. Grinding your life away for nothing but illusions? In so many ways that’s choosing to be poor.

Ultimately we choose to be poor because we let too much money “trickle up”. We let wealth and power concentrate in too few hands at the top of the pile. If we had any guts we’d rise up, and chase the money lenders out of the temple.

24 comments on “Choosing to be poor”

  1. lprent 1

    It is government far more concerned with coercing wealth from the poorest than in creating wealth. But look at the government members. If there is one that has the creativity to build something new and market it, then I have not seen it. There isn’t one that you could look at and say you’d want them in my export business. They don’t have the imagination….

    • rjs131 1.1

      Well can you point out which opposition members have been involved in innovation and exporting and why you would rather have Ashaf Choudery, Rajan Prasad, Rick Barker or Darien Fenton in your exporting business?? Who in Labour has ever risked their own money or employed someone?

      • Olwyn 1.1.1

        If I remember rightly Darien has run a small business before. Jim Anderton too was a successful businessman. Conversely, local patron saint of business Dr Brash seems to have been paid by the state for his whole life, even as he argues for its dismantling. And it seems that the bulk of our private debt arises from people over-leveraging for capital gains on property, as opposed to boldly taking risks in order to produce something.

        • Colonial Viper

          David Parker and Clare Curran both have solid SME experience.

          This another one of those stupid Right Wing memes spread by rjs131.

          Compare this with English who is a career bureaucrat, and Key, who has never successfully built a small or medium business himself but always paid others to do it.

          National is running NZ into the ground because they don’t understand SME’s.

        • lprent

          Conversely, local patron saint of business Dr Brash seems to have been paid by the state for his whole life, even as he argues for its dismantling.

          Yeah, my mother had the misfortune to be lectured by him on economics at university. Her comment was something like “he could make anything boring”. But at that time he was a public servant (early 70’s?)

      • lprent 1.1.2

        I think that has been answered in general.

        But as an observation, I usually find that strong National supporters in business are defined by their bull-necked, hidebound and dogmatic natures who go chasing short-term fleeting opportunities and don’t think through things in terms of their customers overseas. None of that is what is required to export innovation. There are exceptions. But I’d prefer to be working with almost anyone else.

        Fortunately you don’t find that many strong National supporters in innovative industries. You find people who vote for them, but who are also prepared to vote elsewhere if they think it it what the country requires. I usually find strong National supporters in the extractive industries attempting to screw the peasants or the environment.

        FFS all you have to do is look at the National bloggers for examples. 😈

  2. Jim Nald 2

    Sir Paul Callaghan is the PM’s Science Advisor ? ?

  3. Or… Most of us have a different perception of what being poor or rich entails. I am happy without a $ 50 million bank account.

    I would like for all of us to have a reasonable health care, education and some disposable income for some comfort items but generally being warm, fed and clothed in the company of friends and family is plenty.
    Maybe most of us “choosing to be Poor” are the norm and those of us who never have enough are the exception to he rule.

  4. morninglory 4

    People may be looking for meaning in life outside cultural norms and that means investigating activities currently undervalued by society, which in turn offers low wages. I think once you’ve seen the opportunities of small town NZ, tourism appears less of a choice and more of a temporary necessity. For some reason, there is a serious lack of creative thinking (not sure if that’s the right word, but it’s better than “innovation”) among average people in NZ. There’s an awful lot of resources, but either no access to them, or no ideas on what to do with them if they had access. Taking them off who owns them and giving them away isn’t an answer if the recipient doesn’t use them. It’s less about money trickling upwards and more about thinking patterns.

    • Draco T Bastard 4.1

      I find that there’s a lot of ideas in NZ but the people at the top are just too keen to take them and not give anything for them (I actually had an employment agreement put in front of me that basically claimed all my ideas as property of the company. Needless to say, I didn’t sign it but plenty of others did). This results in people getting burned and not giving the ideas any more and these people are, of course, the people without access to the resources necessary to bring their ideas to fruition without external help.

      No, we don’t just want to give everyone money but we do need to find a better way of supporting the people with ideas as the way NZ is ATM the people with ideas are the people being screwed over the most.

  5. Red Rosa 5

    Interesting that the contrasts between the American South and Western Europe are plain for any casual traveler to see, yet this government is claiming credit for turning NZ into something resembling Arkansas or Georgia.

    Which is certainly what will happen when the real impact of the Budget’s gamble takes effect. The combination of severe deflation and unrealistic growth forecasts will be drastic.

    A wealthy farming/business elite dictate to the masses, who cling happily to guns, god and NASCAR. Then when given half a chance they vote for the Teabaggers! Slickly done, you’d have to say. That is of course meant to describe the US South…;)

    In contrast, Western Europe (and Germany in particular) are coming out of recession in defiance of all those predictions of Socialist doom from the American Right. Ironically, one of their biggest problems is the con job their financial institutions were handed out of Wall St.

    New Zealanders seem very likely to vote back in a government which has delivered massive debt through tax cuts, and reject a party which delivered tax surpluses and low unemployment.

    Slickly done, you’d have to say….

  6. Lucy Gray 6

    “Case in point, unions. Unions exist to take care of the ordinary worker. Most unionised workers are still getting pay rises, while most non unionised workers are not. And yet the rate of union membership in the workforce as a whole is less than 20% and falling. People, you’re choosing to be poor.”
    I agree with the comment about falling rates of union membership – so many workers claim they cannot “afford” the membership fees, they need the $7 a week for something else. Yet the reality is that due to their increasing personal debt they cannot “afford” to lose their job due to 90 day law, management of change/restructuring, redundancy, or whatever blight hits their workplace.

    A large amount of the workforce is naive and thinks that nothing bad will happen to me, there are protections in place, and if something bad happens then they can just join a union when it happens. Many workers who are not unionised that I meet think that unions are the ambulances at the bottom of the cliff to carry away the injured, dead and dying. Even of my own members, many consider the primary role of the union is to resolve workplace issues/conflict.

    Unions are about improving workplaces and contribute to the workplace culture and practices and policies (well in my work place). There needs to be ideological and cultural shift amongst workers not just about the value of their work, but the value of being in a union.

  7. Tigger 7

    Some people choose to be poor. Some people choose to be douchebags also, apparently.

  8. Bunji 8

    I’d have to defend Sir Paul here – he gave an excellent address to the Labour Party conference. It was that address that the Herald article is covering.

    Here’s a very similar one on YouTube (minus the slides making fun of Don Brash completely getting his R&D facts completely wrong in the 2025 taskforce report (we’re 3rd lowest investor in R&D after Mexico & Turkey, Don Brash thought we were high investors and concluded we didn’t need any government investment in R&D…))

    Sir Paul says we as individuals don’t choose to be poor, but as a country we do. We are never going to get rich off Tourism (or Wine). As lovely as the jobs are, in New Zealand as elsewhere the money created per job is way too low. Not wages per job (also low), but what wealth is created before it is shared out between worker and employer.

    Fonterra earns good money / employee, but we can’t expand the dairy industry as we don’t have the land / water / physical resources to do so.

    But high-tech exporting? The main resources required are brains and entrepreneurship. Without trying, we have 10 of these companies earning us $5billion/year. If we had 100 of these companies, we’d close the wealth gap with Australia. So we should foster these companies, and make sure the individuals involved want to live here, by being clean & green (rather than expanding tourism & dairy and covering our environment in people/cows).

    Labour’s response: $800 million in tax credits for R&D, to foster the industry that will actually help us catch Australia – replacing National’s sop to the farmers by having us taxpayers pay for their pollution whilst they rort us for high milk prices and not paying their tax.

    • Chess Player 8.1

      The NZ dairy industry is absolutely expanding, it is just not doing so within NZ borders. The expertise is being exported and the physical farming is now well underway in countries like Argentina and China. Fonterra realised long ago that they couldn’t continue to grow the milk supply when constrained by NZ geography and environmental legislation and have been actively doing it elsewhere. This is why they have been moving to a different capital structure with raising funds from outside the farmer shareholder base. Coops are great in many ways, but don’t expect to massively scale up your business with self-funding from a coop’s shareholders. Too much democracy is not good when making big business decisions in a global setting.

      This is no different to Zespri using IP around the distribution processes. Most NZers would believe that most of the kiwifruit in the world comes from NZ. It doesn’t, in fact not even a 3rd comes from NZ. But Zespri is certainly the world’s biggest Distributer of kiwifruit, much of it grown in countries like Italy, all organised and distributed by Zespri.

      This is the knowledge economy at work.

  9. Tiger Mountain 9

    Many people do chose cowardly wimpishness today over organisation and telling the boss to get stuffed. And it is slightly more understandable today after 20 years of neo liberal individualism than it was in the immediate aftermath of the Employment Contracts Act in the early 1990s. High unemployment was a major factor in easing the passage of the ECA as it is today with ‘90 day fire at will’ and all the rest of the legislative measures designed precisely to keep unorganised precarious workers in that state.

    • Join a union, sign any working kids and family up too while you are at it, there is Together Union for $1 per week per family. There is Unite There is also ultimately no excuse for choosing to be poor in the sense of this post.

  10. Draco T Bastard 10

    The speech is here and very, very good. He get it. He understands that farming is not the key to a prosperous future no matter how much the farmers want us to believe it is.

    He lays out the how and why to become a successful society and it has nothing to do with what this government are doing. Make people want to live here by becoming “clean and green” and support our entrepreneurs to do what they want rather than focussing on what the government or big corporations think is cool.

  11. Rich 11

    what’s wrong with tourism?

    We don’t have any objective advantage over countries in the developing world with much lower wages, that’s what. Sure, there are niche tourist experiences that might drive people to come to NZ (rugby, bungee jumping, dangerous driving) but for scenery, mountains, beaches and the like there are dozens of competitors.

    Against that there’s a long and expensive flight and a temperate climate. So we’ll never be able to sustain high wages looking after international tourists (at least until all the competitor economies increase their wage levels, or if we only targeted the kind of people who holiday in Switzerland).

    The point is that if we had more people working in industries where we do have an advantage – through education levels, speaking English and having a critical, creative culture, then we would produce more.

  12. randal 12

    well the way to get rich is to make stuff in high volume that other people want to buy.
    till Dr Callaghan can prescrinbe for that remedy then there is no need to beat others up about it. he is the scientist and has accessto capital. what is he going to do about it. sorry but I personally dont havea few spare billions to r&d and set up a car factory or fridge factory or nuclear warship construction comapny.

    • JD 12.1

      And you’d know this being rich yourself while posting on a socialist circlejerk forum?

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