Rising CEO salaries, widening inequality gaps and continuing working class passivity

Memo from NZ working class to the  bosses?
Memo from NZ working class to the bosses?

by Philip Ferguson

On Monday (June 15) the NZ Herald published the latest figures on CEO salaries.  The paper noted, “The bosses of New Zealand’s biggest companies enjoyed an average pay rise of 10 per cent last year, their biggest bump since 2010.”  By contrast, the average wage and salary earner gained an average increase of only 3 percent and many workers have not had a pay rise at all.  Moreover, as Council of Trade Unions secretary Sam Huggard noted the same day, “Half of New Zealand’s households receive no more income, in real terms, than a generation ago.”


The highest-paid executive is ANZ New Zealand CEO David Hisco who was paid $4.27 million, up about $250,000 from the previous year.  This is the same guy who last October was offering bank workers a 2 percent pay rise, while he was on about $2,152 an hour, about 86 times the hourly rate of long-serving frontline staff.  (See here for our report on the ANZ workers’ dispute.)

The next highest-paid exec is Fonterra CEO Theo Spierings on $4.18 million, a massive $660,000 increase on 2014.  Just over a fortnight ago, the Herald reported of Fonterra’s payout to farmers, “$4.40, the current season’s farmgate milk price is the lowest in eight years.”  So it would appear that the massive pay increase – the increase alone amounts to what a dozen workers on the median income would earn in an entire year! – is clearly not due to delivering a great performance to Fonterra’s farmer-owners.

The highest-paid CEOs, moreover, enjoyed far more than 10 percent pay hikes.  The biggest rise in percentage terms was for Alex Sodi, the boss of Diligent Board Member Services – his increase was a whopping 174 percent.  Meridian Energy boss Mark Binns saw his pay rise by 70 percent to $1.86 million, while Mighty River Power’s Doug Heffernan got a 68 percent rise, taking his final year’s pay to $2.18 million.

The CTU has also pointed out that it’s not just the top CEOs who are doing so well, but the wider layer of wealthy: “The average income of the top 0.1% is estimated to have risen from $665,000 to $892,000 between 2011 and 2013 (latest available figures from IRD).”  Unlike CEOs, who get replaced, these folks accumulate massive wealth all the time, unless they screw up really, really badly.

Growth of wealth among the richest NZers; note how well they did under Helen Clark's Labour government; the fall in the end was due to the global financial crisis, not from any intrusion on their wealth by Labour
Growth of wealth among the richest NZers; note how well they did under Helen Clark’s Labour government; the fall at the end of that government was due to the global financial crisis, not from any intrusion on their wealth by Labour


A useful pointer to how well the rich are doing is the National Business Review‘s annual Rich List.  Last year the almost 170 richest New Zealanders broke $50 billion for the first time, with total wealth of 51.2 billion dollars.  The list only includes those with $50 million and over.  Prime minister John Key was rated as having $55 million.

The super-rich suffered a wee bit during the global financial crisis, but were soon on the up-and-up again.  In fact, they were barely touched.  As political scientist Bryce Edwards noted in looking at the 2013 Rich List, “One of the interesting aspects of the 2013 Rich List is that it shows how little the elite has been suffering from the continuing economic recession. In fact it’s obvious that for the rich, there is no recession at all. The share market, for example, was up about 25% last year.”

And while a poor working class kid can die from the awful conditions of a state house in South Auckland, the 2013 NBR commentary on that year’s Rich List reported on the wealthiest New Zealander, Graham Hart, “recently adding on to the $30 million clifftop home where he and his wife Robyn live in Riddell Rd, Auckland.  The 2ha property now includes a huge three-level banquet hall with a pool and piazza area to complement the main mansion, summer house, guest quarters and tennis court.  He also owns property on Waiheke Island, two super yachts – the 190-foot yacht, Ulysses and the 77m Project Weta (also known as Hull U77), a property in Aspen and an island in Fiji’.”

What about the workers?

Given the near-stagnation of workers’ real wages and the fact that NZ workers are putting in among the longest hours in the OECD, it’s not surprising that, in the statement quoted above, Sam Huggard further stated,  “Workers will be making their case for a decent pay rise this year.  Many are due for a catch-up after years of not getting what the economy can afford.”

It’s certainly true that workers are due for a catch-up, but will they be fighting for it?

Well, there’s the rub.

The growth of inequality has not been met by anything more than grumbling.  For instance, the Herald conducted a poll on the CEO rises.  In the poll 79 percent of respondents say No, it wasn’t fair for CEOs to receive double-digit percentage rises when “the average Kiwi is struggling”.  Only 18 percent said it was fair as “they get paid the big bucks for a reason”.  With that sort of poll result – and the paper’s readership is hardly radical – you might expect a lot of action going on.  A lot of pissed-off workers taking action for hefty pay rises, at least.  But not so, as the latest statistics on industrial action show:


Moreover, we are not simply witnessing a year or two in which workers have been taking a break after a heady period of class war.  The trend has been that for three decades at least workers have decided, with a small number of notable exceptions, to let their faces be rubbed in the mud.  Low pay, stagnant real wages, unemployment stuck at almost 6 percent.  And no resistance.  Some 20 percent of the workforce working 50 or more hours a week and most of them being low-middle income earners.  And no resistance.


Not fighting, drowning. . .

We’ve noted before that the downward trend can initially be explained through the bureaucratic misleaderships of unions throwing obstacles in the way of workers fighting back and actually selling out struggles.  After the top union leaderships did everything they could to undermine the massive workers’ fight against the Employment Contracts Act of 1991, many workers were left too demoralised to fight.  And they had no significant alternative other than the increasingly electorally-focused left-social-democratic Alliance party.   The anti-capitalist left was too small and too politically weak to be able to regroup a section of workers who may have been interested in continuing to fight, or at least working out how to prepare for new battles in the future.

But the trend began – and indeed was much more notable before – the ECA.  And this is where the Labour Party really comes into its own.  The fact that it was Labour that launched the biggest attack on workers’ rights and living standards since the Depression of the 1930s confused and demoralised workers.  Moreover, union leaders continuously put their affiliation to the Labour Party ahead of the material interests of their own union members, the people who paid their salaries.  Union brass, even at the height of Rogernomics, were throwing every obstacle they could in the path of workers’ resistance.  The union movement was effectively finished as any kind of fighting force, and the working class near-broken, by the time National returned to power in 1990.  National’s Employment Contracts Act, along with its ‘mother of all budgets’, really only just codified the defeat which the Labour Party and its hacks atop the union movement had inflicted on the working class.

In this situation, groups to the left of Labour should have grown dramatically.  Most of the groups to the left of Labour, however, were politically soft on the ‘Labour Party question’ and failed to forewarn workers as to what they could expect form an incoming Labour government in 1984.  Several of the larger far-left groups, in particular the Socialist Action League and Workers Communist League, simply disintegrated under the anti-working class hammer blows of the fourth Labour government, and the concomitant rise of identity politics, when they should have been growing substantially as Labour’s true face was revealed at its goriest.

However, we’re now more than a generation on since both the fourth Labour government and the first term of the fourth National government.  Yet there is no sign of any recovery of workers’ will to resist, let alone of any new era of workers’ class consciousness developing.

The impasse

It’s not that workers have accepted the existing system as a really good thing, as many did during the long postwar boom and the accompanying Cold War.  Probably fewer workers than ever have any enthusiasm for the existing socio-economic system.  Yet they have even less enthusiasm for sticking up for themselves and fighting it, let alone organising for a system which they, the people who create all the goods and services which may the world go round, are actually in charge of the decision-making.

Workers in other parts of the world go out on the streets and face batons, tear-gas and bullets, engage in industrial and political action in which they risk their lives, while workers in this country are, by-and-large, unwilling to face upsetting their boss or losing a few hours pay.  It is like most workers have had their spines removed and living in this country is often like living in land of masochists, drugged up on apathy.

What is needed is an utterly frank discussion among revolutionaries about the state of the working class, a discussion without illusions and the fictions that the far left too often subsists on, and the bringing together of people who are prepared to have that discussion and hammer out what is to be done about this sorry state of affairs.  In the absence of class struggle by the workers, a new left cannot get off the ground, but an initial core of a future new left can start to cohere.

Further reading:
Low pay, longer hours and less social mobility: welcome to 21st New Zealand capitalism 
Whatever happened to workers’ resistance? 
Herbert Marcuse and the passivity of the NZ working class 
The productivity trap: heads they win, tails we lose 
Unions and the fight against redundancies 
Christchurch teachers: cap in hand gets kick in guts 
Which way forward for workers and unions? 
“Appeasement doesn’t work: the bosses and their lackeys in government always want more”: speech by RMT organiser 
Building a class-struggle trade union: interview with Tommy McKearney 
Income and wealth inequality unchanged by last Labour government 
The Truth about Labour: a bosses’ party 
Key’s ‘vision’: managing the malaise of NZ capitalism 


  1. It’s interesting that super-wealth in NZ was fairly stagnant under the nine years of the fourth National government in the 1990s and then rocketed up under the nine years of the fifith Labour government. No wonder the OECD said NZ was a great place to do business when Labour was in power.

  2. The casualisation of employment would be a major contributor to workers passivity. Workers are pitted against one another creating scenarios where bringing up issues amongst your fellow employees can result in snitching to the boss (anything to get those extra hours for the week). It seems that being a scab has become the new normal.

  3. No doubt you’re right about that.

    In non-casualised workplaces, it may be somewhat better but often not a lot. I can think of two workplaces in the past two years where I was either directly involved or knew people who were and the workers faced large-scale redundancies.

    One place was being shut down altogether, the other place was being decimated. In the place that was to be shut down a couple of people, including the union organiser, suggested occupying. Even thought the workers had nothing to lose, and could probably have rallied a fair bit of support from other workers and the public at large, they simply weren’t interested.

    In the other workplace, it made no sense to suggest an occupation because of the nature of the workplace – it wasn’t somewhere that could be occupied and run by workers – but some kind of fight culd still have been put up, but no-one was interested.

    And a lot of the workers at each of those places, while they were getting significant redundancy payouts, were not going to find it easy to get new jobs. They really had nothing to lose. They just weren’t up to a fight. And, generally, they were older workers with long histories of being union members going back to the days when most workers were unionised and there was a tradition of unionism.

    I have also been on pickets outside workplaces where the bulk of people on the picketline were not from the workplace, as the workers didn’t want to picket. The last time I did this was in a workplace where they were all permanent staff, well-unionised, and had *serious clout* – they could immediately do economic damage to the company – if they chose to use it. But most of them were happy enough to let others do their fighting for them.

    After that picket I decided ‘never again’. I will continue to do whatever I can to support workers in struggle but never again would I go on a picket line which was dependent on other people because the particular group of workers themselves couldn’t be assed to defend their own conditions, let alone fight for something better.

    In fact, I think that should be a principle of the revolutionary left. If we believe that the emancipation of the working class is the job of the working class, we need to be consistent on that one. There are still leftists who basically substitute for the decision of a lot of workers not to fight. (And I’m not talking about situations where it may be very hard for casuaised workers to picket utside their workplace – but, then, again it’s a damn site harder for workers in the Third World to fight for basic rights, but they still do. They risk being batoned, tear-gassed, shot with live rounds, tortured and even killed, but they fight.


  4. People care about unions about as much as they do about work itself, which isn’t much at all!

    The concept of work itself needs to be abolished. A Marxian critique of political economy is one from within political economy itself, where work and use value are held in high regard.

  5. This is a vital topic, and i think the reasons are complex and multiple. The major form of workers’ resistance that I have seen is job quitting these days, rather than doing the hard yards of staying in a shitty workplace and trying to change it.

    I think a major factor has how capital – or different fractions of capital – targetted the most militant workplaces for restructuring from the late 1970s. So take the meatworks. Meatworks used to account for a ridiculous number of strikes in the past, by far the most militant industry in NZ in the 1970s. But capitalists restructured the industry from about the late 1970s – they cut the workforce and wages by something like up to half while increasing doubling productivity! Now meatworkers are low-paid, and far more precarious than they used to be, subject to a lot more discipline etc.

    To put it really simplistically, the old militant union tradition and tradition of workplace solidarity got smashed, and what has been left intact is generally public sector unions who’ve never been militant (or had a militant membership apart from a few workplaces) and are basically pure service organisations who rarely struggle (they let their members get stuffed over with continual restructuring in govt depts, low pay and overwork, so long as they retain membership by providing lots of services). The blue-collar unions who claim to be struggle-based rarely struggle. Most struggle emphasise media stunts/public pressure/shaming rather than grassroots organising eg. the living wage campaign does not actually involve strikes or protest (while overseas it has).

    I don’t think we can blame workers for being spineless and gutless, or say capital has complete hegemony – it is just really hard to struggle these days, not just for casualised workers. there is a lot more management, control, discipline and surveillence in workplaces these days, and you can even get fired in some workplaces for not having a ‘positive attitude’. Part of the current regime of accumulation is to intensify and speed up work: it’s a deliberate strategy to put us under pressure at work, through a constant stream of big and small requirements. For example, in white-collar workplaces i’ve worked in, you continually swamped by all these orders to do petty admin, performance reviews, plus all your normal work, all are given unrealistic deadlines (plus you’re basically doing the job of two people), and then management blames workers who can’t put up with this toll, which is never sustainable. But this type of thing is not talked about or acted against – in fact, unions are off in la la land talking about productivity deals!

    Plus unemployment is kept high as a further form of discipline and to limit workers bargaining power. While heaps and heaps of workers are individualistic, and do happily stuff other workers over and suck up to the boss etc. some in my experience do want to struggle, but just don’t have much experience and don’t know how do it collectively.

    I think one thing that needs more analysis is the development of a kind of ‘nihilist ideology’ particualry among some many people (particularly youth) – by ideology i mean ideology in the marxist sense – so there is a sort of cynicism out there, a distrust and scepticism of people in power, but also a belief that this can’t be changed, it will always be that way, some new lot who are just as bad if not worse than those in power will just replace them (and in this way it serves to perpetuate class relations). This of course is the ideology of Game of Thrones (i hate to admit i watch it – it’s very overrated), and i suspect it is popular because it expresses this ideology.

    I’ve got a lot of other thoughts on this subject – it is very complex – but I’ll have to write them up later.

  6. I was in two minds about the use f the word spineless but, in the end I opted for it. It’s good to see it has helped provoke some good discussion and debate.

    I agree with all the points made in the contribution from Vomiting Diamonds. But those things have happened pretty much everywhere and yet nowhere that I know is there a working class that is as passive as here. So those factors, as important as they are, don’t explain why the working class here is *as docile as it is* and *more docile* than other working classes which have been screwed over in the same way.

    Moreover, in most of the world, workers have to risk a great deal more to protest conditions than is the case here, and yet they do. Think about what workers in India or China or Iran or South Africa face – Marikana! – and yet they fight back.

    About two years ago I had a very interesting experience on a bus in Christchurch. The bus had stopped part way along route for a change of drivers. The new driver would have been maybe 60-ish. When he was setting up there was some wee thing wrong with the bus or the seat or something. This led him into a monologue, spoken loud enough that everyone on the bus could hear (which was clearly his intent). His monologue went something like this:
    “Well, I could complain to the company, but that would be no good. They wouldn’t listen. They’re not interested in their workers’ views. So, I suppose I could go to the union. But what good would that be. They’re in the bosses’ pocket, they’re hopeless, they’re not really even a union. Well, I could kick up some kind of fuss, but I’m a NZ worker and we don’t make a fuss about anything. You can walk all over us and we won’t do a thing. We’re NZers, we don’t fight. Not like the French. Piss French workers around and they’ll fight. But not us., We’re timid, tame NZ workers. We do nothing, no matter what shit is done to us.”


    Needless to say, I went and sat up front and for the last few stops before I got off I engaged him in conversation. He was just entirely fucked off. He said he was going to emigrate with his daughter to Australia, because he couldn’t stand living here any more.

    A few days ago I was talking to a mate of mine in London about the appalling lack of resistance here and saying to him that it was a pity Australia and NZ didn’t federate because then we’d have some fighting workers because people across the ditch are more Bolshie. He made an interesting comment in response. He said this, “I’m not surprised about the NZ working class, but I don’t think it would be better in Australia. Their white working class may be more combative, but in a narrow, economistic way that is entirely at one with an imperial outlook. This is a common phenomenon in the Anglo Saxon world, even beyond: a loyalist working class brought up on an implicit, even explicit, deal with the ruling class over the past century and more – welfare for loyalty to the nation.”

    I think that’s very true and, while that old ‘social contract’ has been whittled away at, the welfare state is still very much in existence. A lot of the left acts as if the welfare state has been abolished and I recall slipping easily into that rhetoric myself when I came back here in 1994. It took a few years to wake up and realise that the welfare state in this country is still very much a going concern and, while the ruling class waged a very one-sided class war (they consistently attacked and the working class consistently retreated, and some simply ran away), it was more about the terms of the social contract than its existence.

    Lastly, here’s a contrast. In NZ, you can only legally strike in extremely limited circumstances. And as soon as someone waves a stick and says something is illegal, the vast majority of people back off. Can’t possibly break the law. No matter how unjust, how blatantly class-biased, Oh no, can’t break the law.

    In the south of Ireland, people simply refuse to register and refuse to pay punitive taxes like the new water tax. In working class communities people *physically resist* the installation of water meters. If the cops show up to try to help the water company, people continue to resist and frequently force the cops and water meter installers to leave. Where they’re able to prevent the installation of meters because of the cops, they sabotage them after the cops have gone.

    Workers in the south of Ireland and the nationalist working class in the north simply don’t care whether some form of action is legal or illegal. They care if it’s effective. If it’s illegal but effective, they do it.

    Here, workers and unions are largely house-trained. They will do all sorts of ineffective things to keep busy and put on a show of opposition, because they won’t do the effective things as they’re all illegal.

    Somewhere, sometime, somehow, there has to be a group of workers who will say, “We need to do what works, regardless of whether it is legal or not.”

    How long will it take?

    If I was young and had kids, I would actually emigrate. I simply could not stand the idea of my kids growing up in a country where people were so supine and yet had so little to risk by fighting.

    And it’s not just industrial stuff. Remember those huge protests in Feb 2003, before the invasion of Iraq. In Australia, 10% of the population took part in marches. Here, it was about 0.33%.


    • I think the situation is pretty dire, but there are always contradictions – the real problem is that one could easily slip into a very conservative view that the NZ working class is (a-historically) ultra-conservative, reactionary, authoritarian, atomised etc – a la Miles Fairburn or Bruce Jesson. (There is an element of truth to that view, but in my experience it is contradictory, even today – for example, in a recent workplace i worked in a team leader accused me of not following orders when her orders were at fault, and a right-wing worker who hated protesters and spent most of her time dissing other workers for not working hard enough surprisingly supported me and got together everyone in my ‘team’ and almost led a walkout, and my job was saved; in another workplace 4 years ago where there was a complete lack of solidarity, we went on strike on and off for an few hours every week for months, and surprisingly 80% or so went out at first (but support dwindled and by the end only about 5% were striking, oh dear).

      So is all not all bleak. It is really a strange time – a lot of workers i meet seem pretty pissed off, but this cynicism with work and union bureaucracy and bosses just doesn’t lead to action (perhaps that nihilist ideology at work, or just the very right wing times we live in). But overall my work experience is that there is an incredible lack of solidarity in most workplaces i have worked in – most workers are happy to stab in the back other workers or blame other workers for not doing a good job so they can gain favour with management.

      In terms of international comparisons, yes the NZ working class is pretty docile these days. I was lucky enuf to be living overseas recently and was amazed by the level of protest in Europe – major revolts happened in Slovenia and Bosnia against austerity in 2014 that we haven’t even heard of.

      But we tend to compare ourselves with Australia, the UK and Ireland etc – all countries which have a much stronger militant tradition and have historically been highly strike prone countries in world terms. (with Ireland one of the most strike prone countries, close to levels experienced in stellar radical countries like Italy). I looked at some stats from 1960-2000 and in that period NZ was a middle-range country in terms of working days not worked per 1000 workers – had much more working days not worked than countries that sometimes are associated with strikes like South Africa, Sth Korea, Philippines, India – as well as many high income countries like Japan, almost all of Northern Europe (apart from UK, Ireland, Iceland and Finland).

      But in the period since 2000 i guess NZ is now among the lowest strike prone countries in the world (i havent seen some comparisons tho). So what has happened is that NZ has slipped from a middle rung country to a low strike country. It is an internatioal trend in all high-income countries for this slip to happen, just that it is more pronounced in NZ from looking at the stats.

      Places like India, Bangladesh, China, Vietnam, south africa which are experiencing strike waves currently are becoming more strike prone due to many factors – one of them being that workers’ expectations are rising due to industrialisation and economic growth. While in NZ workers expectations are incredibly low and are kept that way (which of course is a solid plank of the current regime of accumulation).

      The water revolt in Ireland (sorry south of Ireland) is impressive – great to see people getting around the law – in NZ we did have a minor version of that in Auckland with the water pressure group which did public reconnections of water etc but that was a few years ago. See https://vomitingdiamonds.wordpress.com/2012/05/12/the-water-pressure-group-lessons-learned/
      (from interface journal).

      I am not sure if this is true because i have not seen a decent international comparison (it is more a statement made by Jane Kelsey), but it is possible that recent passivity is due to neoliberalism being much harsher in NZ in the 1980s and up to the mid 1990s in comparison to other high income countries (not to places like South America where neoliberalism was imposed by dictatorships). NZ was cushioned from the effects of the global recession from 2007 by booming economies in Australia and China, so never needed to make thorough cuts like what has happened in Ireland, UK, Spain, Greece etc. But overall sad to see the global wave of protest with the Arab spring, anti-austerity movements etc pass NZ by. I hoped Christchurch, given the shit people have gone through, would have been the epicentre of a mini-revolt, but it never really happened (a few small protests and solidarity, but mostly just individual or family-based coping as far as i could see).

      I totally agree that a social contract is still in place in NZ – eg. we still have a welfare state, it has just been reduced. But i think the social contract under neoliberalism (I think we still live under a neoliberal paradigm/regime of accumulation, even if has been modified lots in the last 20 years) is a bit different – more like overwork/long hours/stagnant real wages/highish unemployment/high underemployment/casualisation etc in return for cheap commodities/cheap finance/a reduced welfare state/more diversity of commodities etc. Or something like that. There are tensions within this compromise that you’d hope will lead to resistance one day (i hope…).

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