Working full time required us getting food parcels… With our children unable to afford to go and see grandparents I haven’t seen my mum in 5 years. We live in the same island. Never in my life have I been so poor”
That’s one of the many heartbreaking comments we got back from respondents to our fifth annual mood of the workforce survey. Heartbreaking but unsurprising when more than three quarters of working people who responded told us that their income had fallen behind the cost of living.
That’s five percent more than last year when COVID was at its peak, and a more than fifty percent increase on the survey before that.
At the same time just over half got a pay rise in the last year and 61% say increasing wages is the best fix for them and their whānau for fighting these cost increases. Which is why Fair Pay Agreements are so very important. Again unsurprisingly, the two biggest contributors to budget pressures are basic necessities – rising food and housing costs.
Through all of the data one thing stands out: it’s working people who are already paying the price for inflation.
But some people seem to think that working people aren’t paying enough.
Recently a bunch of bank economists claimed that we need increased unemployment and reductions in real wages to beat inflation. These same economists didn’t say much about the record billions of dollars in profits the banks themselves had extracted or the destructive property speculation that enabled it. Perhaps inflation doesn’t apply to banks?
In the meantime, the main opposition party is spending a lot of energy to find politically palatable ways to reduce tax for the wealthiest in our society. They put their incredibly expensive and brutally inequitable top tax bracket cut back in the top drawer for another day when they realised it was political poison.
But they haven’t taken their almost-as-ridiculously-expensive tax cuts to property investors off the table. They seem to think inflation doesn’t apply to property investors?
Our economist, Craig Renney, costed those tax cuts- they’re $2.5bn over three years and it will be paid for by cuts to public services. Most likely the public services that help working people most like health, education, and family support and childcare. There’s just not enough to cut elsewhere.
So working people are already paying for inflation and it seems that a lot of the wealthiest New Zealanders and their political advocates want them to pay even more.
Is there another option?
Of course there is. We released just such a plan – our Inflation and Incomes Act – late last year. That outlines an approach to inflation that doesn’t rely on raising working people’s mortgages and cutting their pay to bring inflation under control, but instead looks at the real drivers.
It aims to share the burden of inflation more fairly and, importantly, recognises that inflation is driven by bigger long-term economic imbalances. Look at our current cost of living crisis for example.
This crisis didn’t come about because we all got paid too much or too many of us have got jobs.
It’s the result of weak and deregulated supply chains collapsing because of COVID, of an overreliance on oil that skyrocketed in price because of a war on the other side of the world, of property speculation that went unchecked and rents that were uncontrolled, of a supermarket duopoly that makes at least twice as much profit as is normal for the international supermarket sector, and of financial institutions stripping billions of dollars in profit every year.
And it’s because of a labour market that relied on bringing skills in from overseas rather than investing in developing them ourselves.
Given the real causes of high inflation, the idea that the answer to inflation is to cut wages, cut employment, and cut public services is ridiculous.
It’s more than ridiculous. It’s immoral.
Tell the respondent who wrote to us “We’re getting less and less for our money. We are not able to afford some of the basic necessities now, and our children are missing out.”, that she should now get paid less because we won’t regulate supermarkets. Or that she should lose her job because we’ve overcooked the economy by letting people make windfall profits buying and selling the same houses to each other.
Explain to the respondent who wrote “I was ill with cancer and would have liked a break from work while I dealt with chemo but the sickness benefit wouldn’t cover my rent.” that this is a good thing because otherwise we’d have to implement rent controls or tax capital gains. Tell them they should take a pay cut to help out the economy.
Now find a way to say to the mother who wrote “There’s something wrong with the state of things when I’m weighing up the cost of taking myself or my kids to the doctor and buying food… No one should ever have to choose between these two things.” that she should put even more aside for her healthcare so we can afford tax cuts for the very wealthiest.
We know what’s caused inflation. It’s not a secret and it’s not the people who are currently paying the price.
As a nation we have to make a political decision to address the real problem rather than making working people pay.
Again.
That wouldn’t be a bad start for the new Prime Minister.
Melissa Ansell-Bridges – CTU Secretary
Powered by WPtouch Mobile Suite for WordPress