Withering away of the proletariat alert: the New Zealand Labour Party is redefining up the working class
01 Dec 2014 Leave a comment
in income redistribution, politics - New Zealand, Public Choice, rentseeking Tags: The withering away of the Labour Party, the withering away of the proletariat
Andrew Little is looking to update Labour's definition of the 'working class': stuff.co.nz/national/polit… http://t.co/AQ9mJL7CQf—
NZ Stuff Politics (@NZStuffPolitics) November 30, 2014
The vanguard of the working class has decided the working classes are a bit too small these days to survive politically. The party vote of the New Zealand Labour Party was its lowest since its foundation in 1919 in the New Zealand 2014 general election.
Small-businesses owners, the self-employed and those on contracts are “workers”, Labour’s new leader Andrew Little says. Little has used his first major speech as leader to challenge Labour to update its definition of working people:
People on middle incomes, people who own a small business, people who work on contract who are doing their best to earn a crust and get ahead, they are feeling forgotten – mostly because in policy terms they are
Back in the day, a large number of Labour Party politicians were asked why did they join the Labour Party. Their answer was the Labour Party promised a better deal for the working man.
Unfortunately for the New Zealand Labour Party, the traditional working class is simply are not enough votes to form a government even when you add in the precariat. The party vote of the Labour Party in New Zealand in the last two general elections is been in about 24%. Two thirds of the New Zealand electorate gave their party vote to non-left parties. The party vote of the Labour Party and the green party summed to only 33% of the vote.
What is worse, if you are to believe these Daily Mail graphics, both the traditional working class and precariat area are a bit old, in case of the working class, they are retirement age. The average age of the working class is 66 and the average age of the precariat is 50.
Even the emergent service worker class is a bit of a disappointment for the Labour Part because they don’t seem to be the stock of shop-floor militancy, higher taxes, more regulation and a more generous welfare state. The emergent service workers have semi-skilled and skilled jobs with career structures and the potential for self-employment.
All in all, the left-wing political parties in New Zealand are in a bit of trouble.The green party is tapped out at a party vote of 10% because their hard left policies limit their growth into the middle class vote. The withering away of the proletariat is leading to a withering away the Labour Party.
Both the Labour Party and the Greens are full of university educated, middle-class radicals whose higher tax and bigger government agenda simply doesn’t appeal to the middle-class vote.
Occupy Wall Street and the Tea Party compared
28 Nov 2014 Leave a comment
in income redistribution, liberalism, Marxist economics, politics - USA, rentseeking Tags: corporate welfare, Occupy Wall Street, rent seeking, tea party, top 1%
The relative importance of capitalism and the British welfare state in abolishing destitution
24 Nov 2014 Leave a comment
HT: Andrew Newell
Secret Tapes of the final Copenhagen Summit negotiations, starring Obama, Brown, Sarko & Merkel
21 Nov 2014 Leave a comment
in development economics, environmental economics, global warming, growth disasters, growth miracles, income redistribution, Public Choice, rentseeking Tags: Copenhagen Summit, global warming, obama
In Copenhagen’s final private negotiations, Obama, Brown, Sarko and Merkel sat down with He Yafei, the Chinese vice-minister of foreign affairs. There is a tape of this meeting at Der Spiegel
He Yafei was the smartest guy in the room. Wen Jiabao refused to attend most of the negotiating sessions.
Given the choice of walking out or sitting down with a vice-minister, they chose humiliation. One response of Obama was:
It would be nice to negotiate with somebody who can make political decisions.
There were still two important placeholders, X and Y, in the draft agreement. They marked the spots where the percentage targets for reductions in greenhouse gas emissions, for the industrialized nations and emerging countries respectively, were to be entered.
China and India were unwilling to make that commitment. They had reached their own agreement with Brazil and South Africa.
"We have all along been saying ‘Don’t prejudge options!,’" said a representative of the Indian delegation*, prompting Merkel to burst out: "Then you don’t want legally binding!"
The entire discussion at Der Spiegel in multiple parts should be read while listening to the tape.
Tax Burdens: Some Facts (For a Change) | Pundit 2011
16 Nov 2014 Leave a comment
in income redistribution, liberalism, politics - New Zealand, Public Choice, public economics Tags: tax burdens, tax incidence
The Economics of Elysium
16 Nov 2014 Leave a comment
in applied price theory, development economics, F.A. Hayek, growth disasters, growth miracles, income redistribution, law and economics, Marxist economics, movies, property rights, Public Choice, rentseeking Tags: Cuba, Elysium
Is Growth of Government Inevitable? | Sam Peltzman video
12 Nov 2014 Leave a comment
in economics of regulation, income redistribution, liberalism, Public Choice, public economics, rentseeking, Sam Peltzman Tags: growth of government, Sam Peltzman
James Tobin on limiting the domain of inequality
08 Nov 2014 Leave a comment
in applied welfare economics, income redistribution, Public Choice, welfare reform Tags: James Tobin, negative income tax, poverty and inequality, welfare reform
Why Middle-Class Americans Can’t Afford to Live in Liberal Cities – The Atlantic
07 Nov 2014 Leave a comment
in applied welfare economics, economics of regulation, environmental economics, income redistribution, Public Choice, rentseeking, urban economics Tags: Director's Law, green rent seeking, land use regulation, zoning
Down and Out in America: only 82% of households below the poverty line have air conditioning!
05 Nov 2014 Leave a comment
in applied welfare economics, income redistribution, politics - USA
- Air conditioning equipment is more common in single family homes (89%) than in housing units in apartment buildings (82%).
- 18 percent of households below the poverty line do not have any air conditioning equipment at all.
- About a third of households below the poverty line use room air conditioning compared to 15% of households with an income above $100,000.
- In contrast, about 75% of households with incomes above $100,000 use central air conditioning compared to just 44% of households below the poverty line.
Coalition Celebrating Equal Pay Case Outcome
29 Oct 2014 Leave a comment
in applied price theory, applied welfare economics, economics of regulation, gender, income redistribution, minimum wage, politics - New Zealand, rentseeking Tags: gender wage gap, living wage, minimum wage, pay equity
I wonder who will pay for this? Caregiver wages are funded out of a fixed budget allocated by the government.
A higher wage will change the type of worker that the caregiving sector will seek to recruit, as happened after increases in the teenage went minimum wage.
When the teenage minimum wage went up in New Zealand, employment of 17 and 18-year-olds fell, while the employment of 18 to 19-year-olds increased because the latter were more mature and reliable than the younger contemporaries.
Media release: Pay Equity Challenge Coalition
28 October 2014
Coalition Celebrating Equal Pay Case Outcome
“The Court of Appeal’s decision declining the employers’ appeal in the Kristine Bartlett case is a huge victory for women workers” said Pay Equity Coalition Challenge spokesperson Angela McLeod.
“The Courts’ decision that equal pay may be determined across industries in female-dominated occupations revitalises the Equal Pay Act 1972 and will be a major factor in closing New Zealand’s stubborn 14 percent gender pay gap”.
The judgement by the Court of Appeal upholding the Employment Court decision again validates the work of caregivers and that they are underpaid, she said.
“We commend the Service and Food Workers Union Nga Ringa Tota in taking this case and exposing the underpayment and undervaluation of aged care workers. And the decision is a victory for all the women’s organisations who have never given up fighting for equal pay,”…
View original post 92 more words
The fire of truth: the relationship between inequality and economic prosperity in New Zealand since the 1970s
29 Oct 2014 Leave a comment
in economic growth, economics of regulation, income redistribution, politics - New Zealand, rentseeking Tags: Auckland urban limit, economic growth, Gini coefficient, green rent seeking, poverty and inequality, Resource Management Act
Figure 1: Before Housing Costs Gini coefficient, New Zealand, 1982 – 2013
closertogether.org.nz/nzs-income-inequality-problem claims that NZ income inequality increased very rapidly in the late 1980s and 1990s — faster than in any other wealthy country.
Figure 2 shows that this rapid rise in inequality coincided with the resumption of economic growth after two lost decades: next to no increase in real GDP per working age New Zealander from 1974 to 1992.
Figure 2: Real GDP per New Zealander and Australian aged 15-64, converted to 2013 price level with updated 2005 EKS purchasing power parities, 1956-2012
Source: Source: Computed from OECD Stat Extract and The Conference Board, Total Database, January 2014, http://www.conference-board.org/economics
Perry (2014) found that:
- Income inequality in New Zealand is at a similar level to Australia, Canada, Italy and Japan (Ginis of 32-33) and a little lower than the UK (34). Countries such as Denmark, Norway, Finland and Belgium have lower than average inequality (Ginis of 25-26). The US and Israel have higher scores of 39.
- The top 1% in New Zealand received around 8% of all taxable income in 2010 and 2011 (before tax), similar to Norway, Finland and Australia, lower than Ireland and Switzerland (11%) and much lower than the UK and Canada (13%) and the US (18%).
- The trend for the New Zealand share has been steady at around 8-9% since the mid 1990s, with perhaps a slight fall in the last few years. Many OECD countries saw small rises in the period, and in the USA the top 1% share continued to rise strongly, from 13% to 19%.
Perry (2014) concluded that:
Overall, there is no evidence of any sustained rise or fall in inequality in the last two decades. The level of household disposable income inequality in New Zealand is a little above the OECD median. The share of total income received by the top 1% of individuals is at the low end of the OECD rankings.
This remark by Parry that there is no evidence of any sustained rise or fall in inequality in New Zealand in the last 20 years is very much at odds with the claim of Closer Together New Zealand that income inequality inequality increased rapidly in the late 1980s and 1990s.
The increase in inequality in New Zealand was in the late 1980s and early 1990s. In the early 1990s, a long economic boom started that lasted until the global financial crisis.
Figure 3 : Income Inequality in New Zealand as Assessed by the Gini Coefficient
Source: Perry 2014 derived from Statistics NZ Household Economic Survey (HES) 1982–2012.
Figure 4: Income Inequality in New Zealand as Assessed by the P80/P20 Ratio
Source: Perry 2014 derived from Statistics NZ Household Economic Survey (HES) 1982–2012.
Figures 3 and 4 both show that after housing costs inequality in New Zealand is higher, but has been pretty stable for 20 years as measured by the Gini coefficient and by the P80/P20 ratio. (When individuals are ranked by equivalised household income and then divided into 100 equal groups, each group is called a percentile. If the ranking starts with the lowest income, then the income at the top of the 20th percentile is denoted P20; the income at the top of the 80th percentile is called P80. The ratio of the value at the top of the 80th percentile to the value at the top of the 20th percentile is called the P80/20 ratio and is often used as a measure of income inequality).
Figure 5: Proportion of HHs with housing cost outgoings to income of greater than 30%, by income quintile
Source: Perry (2014); OTI = outgoings to income
Figure 5 shows that
- for the bottom quintile (Q1), the proportion with high outgoings to income (OTI) steadily reduced from 48% in 1994 to 34% in 2004, as unemployment fell, employment and income rose, and income-related rental policies were introduced in 2000 for those in HNZC houses. From HES 2009 to HES 2013 the proportion rose strongly from 33% to 42%, the highest it has been in the last 25 years except for the peak of 48% in 1994.
- For households with incomes in the second quintile (Q2) there was a strong rise from the 1980s through to the mid 1990s, followed by a relatively flat trend to 2004. Since 2004, the proportion with high OTIs has risen strongly from 27% to 36%.
- For the third quintile (Q3) the proportion with high OTIs settled at around 30% for 2007 to 2013, up from 21% in 2004 and 10% in 1988.
Rising housing costs in New Zealand have one explanation, which is restrictions on the supply of land under the Resource Management Act.
HT: nzchildren.co.nz/income_inequality for figures 3 and 4.
Utopia, you are standing in it! 
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