They struggle on as gap widens
Danielle Heyns examines the issue of inequality in New Zealand.
Getting by day-to-day is hard for Tira Mangos, her husband and four daughters since they moved north after the Christchurch earthquake, with the promise of a house in Pukekohe and a job for her husband in Auckland. Both fell through.
‘‘To try to find a house with the money we had was hard,’’ says Tira.
They ended up renting in Huntly. But there aren’t many jobs available there, and public transport isn’t great.
‘‘Then you have to pay for a bus fare to get to job interviews in Hamilton.’’
Tira, who used to temp in factories in Christchurch, would love a job. Part or full time – anything.
‘‘If I can find full-time work, full-time work.’’ ‘‘I’ll retrain if needs be.’’ Her husband did eventually find a job as a stainless steel polisher in Te Rapa, but that was cut short three weeks before Christmas, when he had a heart attack and triple bypass surgery. Now he can’t work.
Even with government support coming in, she couldn’t make ends meet. School costs for the four children, 15, 13, 11 and 7, add to the pressure.
She approached the food bank in Huntly, but was told it had run out of food. Then she read about the Society of St Vincent de Paul in her daughter’s school newsletter and asked for help.
‘‘It wasn’t the easiest thing to do, but when you’ve got kids . . .’’
The charity offered food aid, and Tira says she doesn’t know where they’d be without the help. She’s originally from Ngaruawahia, but her parents have died.
Tira says without St Vinnie’s, the family wouldn’t be here. It even organised Christmas presents for her girls.
Tira’s family is one of many Waikato people struggling to make ends meet. Talk to local charities and you hear of increasing numbers of homeless people. They say there are more women on the street, more people queuing up in soup kitchens, more people looking for budgeting advice.
Dr William Cochrane says it takes just one incident for people to lose everything. The convenor and graduate adviser in labour studies and an associate researcher at the University of Waikato is not surprised that things have turned out this way in New Zealand.
But while he’s not surprised, he is angry about it.
‘‘People are drawn to areas by cheap accommodation. But there’s a reason it’s cheap: it’s completely detached from the labour market. Out there in the wilds of the Waikato are bands of people who live around deserted industrial areas. You don’t see them.’’
He says while beneficiaries are vilified, at least everyone knows they’re poor.
The invisible poor are just that. They’re often working people. Without a voice at work and the means to save for a rainy day, it doesn’t take much in the way of a crisis for them to hit the skids.
‘‘It’s not obvious to people how many people are working their asses off, who can work for 40 years in the freezing works and turn up one day and get a pink slip and they will never work again.’’
Hamilton’s Huttons workers know all about that.
Desperate times call for desperate measures, like using debt as a buffer. Enter the money lenders.
I’ll do
‘‘They’re bled dry and it just delays the day of reckoning.’’
Hamilton Budgeting Advisory Trust manager Clare Mataira agrees.
When she started in her job 12 years ago, the average debt of someone using the free budgeting service was $5000. Now, it’s $20,000. $20,404, to be exact, according to the trust’s annual figures.
People get into debt for all sorts of reasons and she’s been seeing many people who have been laid off in the past year.
‘‘If people don’t put aside money, there’s no contingency. Things like the mortgage and the car registration keep happening, whether you have a job or not.’’
And this time of year, people can be forking out $400 for a new school uniform – that’s for one child – and then there are stationery costs and the ‘‘voluntary’’ school fees.
The cost of living impacts, too, says Mataira: food and rent go up and mortgages are starting to creep up again. Power can be a big issue, especially in winter, and cold homes lead to poor health, which leads to doctor visits and prescriptions. ‘‘It’s a never-ending cycle.’’ She picks up a list of names and counts them: eight. Eight clients on superannuation, people who rent their homes, who were approved for a loan, most by mainstream financial institutions. ‘‘They’re setting people up to fail.’’ Cochrane concurs that the numbers are growing for this kind of thing. But he understands why people take out loans. Sometimes not fixing the car means not being able to show up for the job interview, he says. ‘‘Much of the community acts as if this is some giant surprise.’’
Instead, it’s been a gradual pattern since the mid-1980s, when the macroeconomic policy, aimed partly at increasing labour market flexibility, weakened the bargaining power of the worker and reduced real wage growth, he says.
This led to a precariousness of employment, especially at the lower end of the labour market.
‘‘This instability has left many in fear of where the next pay cheque will come from as they scramble to assemble a livelihood from an ever-changing mosaic of ‘lousy’ jobs.’’
Add to this a gradual weakening of the social safety net and of state provision of health and education and the rise in cost of basic commodities, and you have a big problem.
‘‘Poorer households spend proportionally more of their income on food and shelter.
‘‘The focus on income inequality, while important, misses the fact that inequality in the distribution of wealth is far more pronounced and probably more pernicious.’’
From the mid-1980s to the mid-1990s, there was a rapid increase in incomebased inequality.
There was also a gradual toughening up of social welfare.
‘‘So when the crunch came, there wasn’t the basis to turn to that people had in the past.’’ The reasons are numerous. ‘‘New Zealand has always suffered from small, indolent and ineffective users of capital: small businesses. People who see small business as a lifestyle option. Part of the fix for that hasn’t been to fix productivity, but to pay low wages.’’
He says before the mid-1980s, income inequality in New Zealand was comparable to inequality in the Scandinavian countries. Now, it’s comparable to Anglo-Saxon countries.
‘‘If we wanted to do something serious about this, we would do more than pay lip service to developing a society that provides reasonably paid stable employment to all who want it, backed by readily accessible quality education, health care and a social safety net that insures that those in need can live with some dignity and hope.’’
For him, it comes down to this: A decent job, fair say in your future and a hand in times of trouble.