2010 Christchurch protest against the 90-day legislation

Part of 2010 Christchurch protest against the 90-day legislation


by Phil Duncan

In 2009 the government introduced legislation which allowed bosses in workplaces with less than 20 workers to take on people in trial 90-day periods; within this 90 days they could fire at will.  In 2011, the legislation was extended to all workplaces.  Fairly quickly, the ‘opposition’ Labour Party declared that it would not repeal this legislation if it got back into office.  John Key’s rationalisation for this anti-worker measure was that it would make employers more likely to hire young people, migrants, beneficiaries, Maori and Pasifika workers.

Opponents of the legislation, like ourselves, pointed out that while the legislation was unlikely to have any devastating effect on the working class, it was essentially a sop to business, especially small business, which sought greater control over workers and more ‘flexibility’ on the part of workers – ie working as and when the bosses dictated.

Reduced costs for bosses, nothing for workers

Now a Treasury report has been issued confirming precisely what people like ourselves said back in 2009 and 2011.

The key findings of the report indicate, “the policy appears to make a positive, if small, contribution to the range of regulatory options for achieving labour market flexibility and increasing the ease of doing business”.  Thus, “trial periods allow firms to benefit from reduced costs associated with hiring and dismissals, without changing their behaviour”.  At the same time, “Jobseekers are neither more or less likely to find work, but may have to bear increased perceived uncertainty about their job security while on a trial period.”

The report notes the lack of evidence that 90-day trial periods have done anything to get employers to hire more young workers, beneficiaries, Maori and Pasefika.  It states, “when examining construction and wholesale trade (two industries that have made relatively high use of trial periods) the study found statistically weak evidence that the policy increased hiring. The researchers looked for, but did not find, evidence of significant changes in other aspects of hiring practices in construction and wholesale trade, and also did not find evidence of significant changes in any other industries.”

So no likelihood of it helping the specific groups of disproportionately unemployed workers the government claimed.  Indeed, official unemployment in New Zealand in the 4th quarter of 2008 was 4.6% and 6% in the fourth quarter of 2015.  Maori unemployment grew from 8.6% in 2008 to 13.2% in 2014, while the percentage of Maori youth not in jobs, education or training reached 21.9%.

The Treasury report also claims, however, that no adverse effects on employees such as higher job turnover had been found.  Given the scarcity of jobs and the low expectations of many workers at present this may well be the case.  It is likely that the dissatisfaction of workers affected by the 90-day legislation is therefore quite muffled and is not going to be reflected in a Treasury report.  Really what choice do these workers have?

Their view of how we workers fit into their capitalist economy

Along with pointing to the bullshit claims made for 90-day periods by the government, the report gives us – if we needed it – further insight into how workers fit into a capitalist economy.  For employers as a class, you see, workers are not human beings – they’re “labour inputs”.  This is how the report puts it in describing how the 90-day legislation provides greater ‘labour market flexibility’:

“Labour market flexibility allows employers to react to changing economic conditions, to grow, and to be competitive internationally, by adjusting their choice of labour inputs. The OECD compiles indicators of employment protection that are a proxy for this flexibility. Data from 2013 (the latest data available) places New Zealand within the top four countries with the least restrictions for all four indicators, including ranking first in two of these. This relative flexibility was likely an important contributor to New Zealand’s swift recovery from the Global Financial Crisis.”  (Actually, labour market flexibility had little to do with the GFC impact here.  NZ’s escape from the GFC had more to do with things like the greater carefulness of Australian banks and Kiwibank – the major part of the banking sector here – plus trade with China.)

In the 1800s, in the early years of industrial capitalism, workers were called ‘hands’, because that was what the bosses were mainly interested in.  That was the part of the worker that did the work.  So it was the part that mattered to the bosses.  Now, workers aren’t even called after body parts, they’re simply ‘labour inputs’.  However, it is the labour-power of actual human beings – workers – which creates the surplus-value that is the basis of capitalist profit.  Take out the worker, the ‘labour input’, and see how the capitalist gets on.

The Treasury report is also interesting because underneath the obvious – the 90-day legislation has made little difference to anything – is a deeper problem, one that doesn’t get talked about at all in public discourse.  This is the stagnation at the core of the economic system here (and in much of the rest of the capitalist world it is even worse).  Bosses see that they can’t hire and fire at will, so they assume this is a crucial source of their woes – in particular the phenomenon of the falling rate of profit, which is endemic to capitalism and causes periodic crises.   The bosses therefore focus on getting total control over the workplace and ‘their’ workers.

Getting more ‘labour flexibility’, however, doesn’t get rid of the fundamental problem.  The falling rate of profit leads to capitalists trying to make workers work harder, faster, longer, cheaper but without they themselves investing much more funds in new technology, newer plant, machinery and equipment, R&D and hiring and upskilling more workers.  Without massive new rounds of such investment, however, the economy remains fairly flat.  And opting for new rounds of such investment changes the organic composition of capital and therefore leads to falling rates of profit and new crises further down the track.

Capitalism is screwed – but so are we unless we fight back

Capitalism needs more than what the bosses might get from very slightly reduced costs of getting rid of workers in the 90-day period.

In fact, capitalism is screwed.  But, as long as the working class accepts it, it can hobble along at our expense.  There are no impossible situations for the system as long as most people accept its limits as being somehow natural limits about which nothing much can be done.

The media, the institutions of ‘learning’ and the parliamentary politicians all attempt to reconcile us to this situation.  As a class, we need to stop colluding in our own exploitation, stop wasting time and energy playing their games and by their rules and start working out – and fighting for – our own interests.  And those interests are as a detachment in the global working class.

For a more in-depth discussion of how capitalism works and why, ultimately, it doesn’t see here.  And for a discussion specifically on how the falling rate of profit and why it is key causal aspect of capitalist crisis see this article.



  1. Lennart Rahm says:

    Comrades,please note a new e-mail for me : lennartrahm.lr@gmail.com , please send your always very interesting courriers to that adress,

    Your comrade,


  2. Admin says:

    That’s weird. That’s the address the note about what’s new on Redline went to!

  3. Barrie says:

    Good article. It always strengthens a case when you use the system’s own experts against it. As Chomsky points out, its worth reading their stuff because the powers that be need to tell the truth to their own people in order to function and some of this is publically available. They couldn’t operate well if they just lied all the time or kept everything behind closed doors.

    You can always tell you’re being sold a dubious bottle of snake oil when the ruling class use the most vulnerable in society as examples of those who will benefit from their latest concoction. When ACT introduced Charter Schools the only examples they ever seemed to give were in relation to Pasifika and Maori, as if the good folks of Epsom really cared about that!

    The use of dehumanising nomenclature is a pretty insidious aspect of capitalist policy making. My personal gripe is hearing about Human Resource Departments as if people were the same as machines or oil. The other one is the shift to a business model within the state sector, with people being called ‘clients’ rather than seen as citizens. Anyone who has spent 10 minutes dealing with WINZ will know that it doesn’t matter that they call you a ‘client’, the power differential means you’ll be on the receiving end and unable to call the shots.

  4. Admin says:

    Yes, I love the client thing with institutions like WINZ. But while business ideology tells us “the customer (ie client) is always right”, WINZ’s version tells us the customer is always wrong! So the ideology is always ‘flexible’!


    • Admin says:

      Marx’s ‘Capital’ is full of wonderful little insights. The bit where Marx talks abut the origin of the term ‘hands’ is very short but a great little insight into how capitalism dehumanises the people who make the system itself possible.

      I think there is a powerful human/anti-alienation argument against the system.