National’s McJob Creation Scheme

The Spark August 2009burger
Byron Clark

The government has made a deal with fast food giant McDonald’s in which young people receiving the unemployment benefit will be sent to jobs in McDonald’s restaurants, and have their ‘training’ subsidised by the state. Every beneficiary McDonald’s hires will get the company up to $16,000 which is the equivalent of about 8 months wages for a McDonalds worker. Social Development and Employment Minister Paula Bennett is citing the relationship with the golden arches as an example of “the Government’s commitment to getting beneficiaries into jobs,” but while the growing number of unemployed certainly need jobs, McDonald’s needs workers a whole lot more, and this is what the scheme is really about.

Fast food is a growth industry during this recession, as people who would have previously eaten at more up-market restaurants lower their budgets. McDonald’s in New Zealand is continuing to build on its profits, enough to open a number of new outlets. They need to employ an estimated 6,000 workers over the next few years. The reason? Those workers are where their profit comes from. The company can provide an investment to build a new store with all the cooking and food preparing equipment that requires, but it can’t see a return on that investment until labour (ie, workers) is added. A McDonald’s worker doing an eight hour shift for minimum wage will be paid $100, but by turning raw materials (buns, meat patties, frozen Happy Meals, that worker could produce $200 for the company. Without the worker, McDonald’s couldn’t realise a profit. [Read more…]

Recession scenarios

Philip Ferguson

In the past couple few weeks the Reserve Bank governor Alan Bollard, prime minister John Key, and other commentators have been talking about the recession, or at least the worst of it, being over. 

 Bollard is a fairly level-headed and reasonably sophisticated bourgeois economist and Key is a fairly level-headed, reasonably sophisticated capitalist political manoeuvrer. So their view of the current state of the recession is worth some consideration and can’t just be dismissed as capitalist propaganda.

 The evidence, such as it is, that has been presented to suggest NZ is coming out of recession is pretty flimsy, however. A news item that featured what they were saying on the subject showed a case of one house that had been sold in five days, whereas last year the same house hadn’t sold in months. That is hardly evidence for much at all.

 Harcourts’ real estate blue book in early July contained an ‘informational’ sheet in which Harcourts declared the recession, or at least the recession in house prices, over. Their evidence was improved house sales for the past two months. This verdict on their part seemed rather unconvincing – especially since it came in a blue book that was at least 1/3 smaller than the size of the blue books last year. If the housing market was really jumping back up, then the Realtor and the Harcourts blue book wouldn’t be the slimmed down volumes that they are at present.

 More importantly, a real recovery couldn’t be judged from house prices. No new value is created in the sale of houses – all that is involved is prices going up and down. If they go up, above the actual value of houses, these boosted prices simply draw money from elsewhere in the economy – and, usually, also involve the extension of more credit. [Read more…]

Working class resistance and the economy

John Edmundson
The  Spark July 2009

The sub-prime crisis and credit crisis have finally brought an end to the “good times”. As trade has slowed down, unemployment has begun to rise and in some countries, large scale demonstrations have occurred in anger against the collapse of the economy and the attacks on workers that have followed.

If workers do not fight back, the recovery when it comes will leave workers worse off than before. As always, workers’ wages and working conditions will be cut in response to the recession and unemployment. [Read more…]

“That capitalism is in crisis.”

 First in Victoria University Debating Society 2009 series of public debates on topical public policy issues.  (Rutherford House, 6.30pm, 11 May 2009)

 Third affirmative speaker Don Franks

 Unfortunately capitalism is not on its deathbed, but it is in a state of crisis.  You don’t have to take the word of a communist union organiser – just listen to the despairing of senior capitalist mouthpieces.

 “Our world is broken—and I honestly don’t know what is going to replace it. The compass by which we steered as Americans has gone. The last time I saw anything like this, in the sense of disorientation and loss, was among my Russian friends when the Soviet Union broke up.” So said Bernie Sucher, Merrill Lynch operations head in Moscow, in the March 8th  Financial Times.

 In the same edition of the Financial Times Associate editor and chief economics commentator Martin Wolf despaired: “It is impossible at such a turning point to know where we are going… Yet the combination of financial collapse with a huge recession, if not something worse, will surely change the world. The legitimacy of the market will weaken. The credibility of the US will be damaged. The authority of China will rise. Globalization itself may founder. This is a time of upheaval.”

 In the midst of this time of upheaval, Wolf continued clinging to the old capitalist mantra: “no credible alternative to the market economy exists…” [Read more…]

Shorter work-hours: They say less pay, we say more pay

Jared Phillips The Spark April 2009

Resulting from the Job Summit in February, the government has now announced the introduction of the Job Support Scheme. At the time of writing, between 20-30 companies have taken up the government’s offer. Who benefits from the 9-day working fortnight?

In the past socialists have successfully fought for a shorter working week for the same pay. This has happened in the construction industry in Australia and in the meat industry in New Zealand. We need to raise these arguments again and also raise them at a higher level. Continual productivity gains make it possible for us to move to a society in which workers can consciously organise and limit the amount of time spent working while increasing their leisure time. Oppositely, under the capitalist system, the lives of the working class are organised by the rhythms of production. This is clearly the case when we look at the way hours of work are currently being re-regulated. [Read more…]