Unemployment has shot up to 133,500, nearly doubling in 18 months. But that’s not the whole story. The official ‘unemployed’ are only the people without work who looking for work and able to start now. Add to that the ‘jobless’, people who want work but are not actively looking (because they’re discouraged or there’s none to be had) and people looking but not immediately available. there are now 102,600 people in this catagory, up from 66,800. On top of that there are the ‘underemployed’ – people with work but unable to get as much as they want or need – another 114,300 people.
Together they make up the reserve army of labour. It is an ‘army’ that does the work of the bosses by keeping wages down, and it does that better the more people are forced into its ranks.
These are all people who must compete against each other (and fully employed people wishing to change jobs) for the limited, insufficent supply of work. Whenever there are too many people trying for too few jobs, the only way they can compete is by agreeing to do more work for less money. Workers can’t afford to simply withdraw from the market; their labour isn’t any other commodity, it’s the only way to get a decent livelihood.
When few people were unemployed, jobless, or underemployed wages rose quickly (and the bosses screamed about ‘wage inflation’). Now, thanks to the capitalists’ financial crisis the ranks of the reserve army of labour are growing and the Key Government is sitting by doing nothing because it represents the interests of capital, not working New Zealanders. Workers are forced to undercut each other and the bosses win.
The outcome is falling wages and bigger profits, which is exactly what Treasury is projecting in the years ahead.