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.
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.
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.
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