Saturday, December 26, 2015

WHAT PRICE LOYALTY, NEW ZEALAND?


Now here’s an interesting article:

Made in NZ - do you buy into it?” [Nikki MacDonald, Stuff, July 2013]

I de-based myself today.  I went lower than I ever thought it was possible to go.  No, I didn’t buy instant coffee.  Worse; I bought a bottle of Australian wine.  

Now, here in New Zealand, buying Aussie wine is a bit like an American buying an AK-47.  It’s not yet a crime, but it’s pretty bad, eh?

Before you grab your torch and pitchfork, here me out: I bought on price.  The simple fact is that Australian red wines are – by and large – cheaper than our own wines here in Godzone.  As I was looking at the expensive NZ wines, I thought to myself for the first time, “What loyalty do I owe these companies?”

When I was growing up in the UK, I remember the advertising campaign that seemed to run for years; “British goods mean British jobs.”  This was a reflection that cheaper goods were starting to filter in from Taiwan, Japan and China.  The reality was that – to pay British workers a fair wage – British goods were more expensive than those from the Far East.  And we accepted that in good faith.  Indeed, it’s still a wonder today, that Chinese factories can exploit their workforce to the degree that a Chinese worker can roll a car off the production line for the cost of a bowl of rice.  That is the economic reality in China.  But Chinese workers don’t have the same protection ours do; Chinese factories don’t have the rigorous regulation, employment or Health and Safety regimentation that the West does, so their cost of labour is far lower.

So if we consumers are being fed messages to Buy New Zealand-Made, why am I struggling more and more every year - as an earning employee - to afford those New Zealand goods?  Why am I not feeling the love?

Let’s come back to the economic conditions here in NZ – compared with Oz.  Goods bought here - even NZ-made - are often more expensive than abroad, including Australia.  Is it because our wages are too high?  Are we being paid a fair wage?  Well, Australian workers continue to outstrip us in terms of wages, despite their downturn.  Indeed, over the last 30 years, New Zealand wages have hardly risen at all in real terms.  This means that our ability to keep up with the rising cost of goods actually falls shorter every year.  And yet, our productivity continues to soar!  If there is ever a Case Study for exploitation, I think it’s here in New Zealand.  In other words, we are working harder, longer, and for less money.  It's little consolation we're not alone.

If New Zealand wages are so low, why are NZ goods so damned expensive here?  Milk is an obvious one after wine.  Our wines are good - exported around the world - but we’re the international HUB of milk production.  And the reason for that is that it costs less to make milk here; cheaper water, cheaper wages, and relatively cheaper land.  Yet, it’s dearer to buy a litre of milk here than in most European countries!   

I'll tell you why that is.  It’s because price has NOTHING to do with cost-of-production.  Price has everything to do with our willingness to pay.  Yes, yes, yes; basic economic theory tells us that profit = sales – cost, so price depends on that equation.  However, if the customer isn’t willing to pay the price, the theory falls over.  If it costs $100 to make the widget, but the customer will only pay $1, then widgets aren’t made.  However, if a widget costs $1 to make, and the customer is willing to pay $100, then you can bet the customer will be charged $100.  It might not be fair, but that’s capitalism.  So if we are going to be charged more for NZ milk and NZ wine, how far should our loyalty stretch?  Frankly, there are some large and high-profile companies here in New Zealand, pulling on our heartstrings.  They pull out the “Loyal” card – but they ain’t givin’ back.

Let’s look at the theory of NZ goods keeping NZ jobs.  Well broadly, that’s still a truism today – but it’s not quite as “true” as it once was.  NZ corporates focus on “productivity” – "We need to be more productive," they cry.  But, if we are more productive, we actually do ourselves out of jobs!  We HAVE been more productive - and our continued broad increased productivity means less jobs across the NZ economy!  However, the statistics continue to show that we are not seeing the benefits of our productivity.  Not only are New Zealanders being exploited, but the corporate, right-wing spin today, is that we should have some sort of loyalty for our large NZ companies with those limited budgets of ours. We're told that NZ money spent on NZ goods trickles down into the economy, instead of going overseas.  Well I can tell you, the trickle down theory is the biggest bag of shite since Margaret Thatcher filled her rubber underpants.   Despite the right-wing spin doctors CONTINUING to promote “Trickle Down”, the economists and the statistics do not support the fact.  Indeed, money does NOT “trickle down”; money trickles UP.

I’m not saying that every business here in New Zealand is like this.  Indeed, there are some cracking businesses that earn our loyalty by the directors/owners’ hard work, their dedication to their staff, and their exceptional, true respect for the customer.  But there are many NZ businesses that don’t.  

So in summary, there are a lot of businesses in New Zealand that aren't paying their way in our country;

  • As employees, businesses in New Zealand aren’t giving us the return for our hard work
  • As customers, businesses in New Zealand aren't giving us lower prices for their lower cost-of-production – they can’t have it both ways!
  • There are New Zealand businesses who are fleecing the consumer – charging us more than our overseas counterparts, playing on our heartstrings, but not passing that increased revenue component onto New Zealand workers.
  • Directors in New Zealand continually award themselves annual pay rises MANY TIMES higher than inflation, but plead poverty when it comes to staff pay rises.
  • New Zealand businesses want consumer loyalty from kiwis, but won’t reward staff for their productivity and won’t pass on the lower cost-of production to the consumer, in terms of lower prices.  So why should be loyal?

With all of that said, let’s be choosy about how freely we give our loyalty.  Let us not be blindly sucked into the "Buy NZ" game - until we have the incomes to have that luxury!  Instead, let’s give our loyalty to those great kiwi companies who have earned it, not to those who demand it.


FURTHER READING:

"Real Wages - the Brutal Truth" [ Mike Treen, Unite News, Feb 2014]

“The lag in wages vs. productivity costs you hundreds of dollars per week” [Systemic Disorder, Sept 2014]


"Re-run: Unemployment up, productivity up" [Marty G, The Standard, March 2011]


"Does your company give you a $148,000 bonus?" [Sydney Morning Herald, Dec 2015]

"Are the fat cats pouring their own milk?" [Nicholas Blumsky-Gibbs, Otago University, Oct 2012]

THE CHRISTMAS DONKEY



Now here’s an interesting article;

"Keys wish Kiwis a happy Christmas" [New Zealand Herald, 22 Dec 2016]

I haven’t written a blog specifically on John Key yet – I mean, where do I start?  There's too much material!  But this nonsense is a doozy worth making the effort.

"I love Christmas; it's a time of family and friends, a little bit of downtime and to get that work-life balance back into perspective," he says.

This one sentence alone demonstrates how out-of-touch this donkey is with the lives of real New Zealanders.  For many of us, Christmas is a nightmare.  We dread mulling around the shops sweating it out with the rest of the frantic proles, trying to find Christmas presents that fit into our limited budget.  And that’s only AFTER we’ve sworn at the idiot who’s stolen our parking space.

I’m not saying that I wouldn’t LOVE for Christmas to be the same as DonKey’s vision.  But frankly, he and his government ain’t makin’ it happen.  For many of us, Christmas is an hour glass, running out of sand while we try do all the USUAL things in our lives -  AS WELL AS prepare for Christmas.  

For some reason,  I can’t see DonKey swearing as he has to face the Christmas rush AGAIN, when he’s remembered a last minute Christmas present. I can’t see DonKey having to argue with one of the proles, that have stolen HIS parking space that he was about to reverse into.  I can’t see DonKey worrying that the postage of a present abroad is going to root his budget.  I can’t see DonKey having to choose the cheaper present, because the dearer one would smash his VISA bill next month.  I can’t see DonKey cooking Christmas dinner – can you?  In fact, I can’t even see DonKey putting up his own Christmas tree - unless there's a news camera team present.

It’s obvious from his Christmas message that DonKey lives in another world.  I rather think that he only has to issue instructions to the people he pays – and they do it all for him.   I rather suspect that DonKey has so many people running around after him, that it’s clear he’s never even had to use a hammer in his life.  Unlike the rest of us, living in real New Zealand.

"John Key Hammer Fail" [TVNZ One News, March 2015]



"Asked if he was a home handyman, Mr Key said no. "Bronagh [Mr Key's wife] gets a man in. Don't worry about that." 

I don't know about you, but in my 16 years in New Zealand, I have learned more about DIY than in the other 34 years of my life.  Why?  Because I've had to.  I can't afford to "get a man in" any time there's a nail that needs hammering.

It’s fair to say that his wealth solves most – if not all – his Christmas woes.  So, I can’t see DonKey worrying about much at all at this time of year – hence his Christmas message.  And because he doesn’t have these worries, he doesn’t understand that the rest of us - living in real New Zealand – often DREAD Christmas.  

Of course DonKey loves Christmas – he doesn’t have to do any of the work that we have to do, in the insane run-up to the Festive Season.  This is why the man who supposedly governs us shouldn’t BE governing us – he’s completely out of touch with the “real New Zealanders,” he thinks he knows.

For us “real New Zealanders,” Christmas is a frantic end to an exhausting year of fending off the wolves and trying to make ends meet.  We don’t have any “downtime.”  And we don’t have the luxury of being able to pay people to put up the Christmas tree, buy the presents on the shopping list or cook Christmas dinner.  For most of us, we have to do all these things ourselves.  For many of us – and I’m luckier than those further down the ladder  – DonKey’s message is a painful reminder that Christmas is actually a time of deadlines, stress and financial hardship

Yes, Christmas is great if you don’t have to worry about time or money.  How many of us living in real New Zealand are relieved of that burden?