The Poverty Trap
An occasional fable
with didactic notes,
by Phillip Mann
Bertold Brecht had a dirty mind: and I mean this not with reference to sexual matters, (though that assertion would be true enough) but with reference to politics. He suspected the worst of men in power, for he knew human nature to be fallible. He also knew that power is corrosive of goodness, and that the most well intentioned systems can result in the lives of human beings being deformed and reduced to misery. If one can render his political message down to one sentence, it would be that we must be ever vigilant and suspicious concerning the actions of those who have power over us. Equally, for artists working within dangerous political systems, he called for works of art which alerted people to danger by inviting them to think. He wanted warning fables which were recognizably true to the human condition but abstracted enough so that the principles in operation could be detected. It is in this spirit of a warning fable that I offer the following story and analysis.
Jack and Jill, having saved their money carefully for some time and being very much in love, decided to get married. Both were working and both were in buoyant good health. Helped with a loan from Jill’s mum and dad, they were able to put a deposit on a modest house and take out a mortgage. The mortgage rates were high but Jack reasoned, “They’re bound to come down soon. The Government says so. Inflation is down. Well be all right.”
The service was simple and Jill’s two younger sisters aged fourteen and fifteen served as bridesmaids.
It was just three months after they had married and moved into their new home that Jack was made redundant. Without warning, the business in which he was an assistant warehouse clerk, went into receivership. Jack could not believe it. He felt for the first time as though the firm ground under his feet had collapsed and he was sliding…
The central image I wish to pursue is that of the Poverty Trap. This can be likened to a particular kind of insect trap which has the form of a large jar. The neck is wide at the top but speedily narrows to a small aperture just wide enough for the falling insect to tumble through. Below this opening, the jar widens, and its walls are smooth, so that once in, the creature is trapped and there is no way out.
I believe that certain tendencies in legislation over the past few years are resulting in the creation of just such an economic poverty trap. I further believe that this poverty trap will be filled with a sizable segment of our population who will never be able to achieve economic freedom and who will be united only in their resentment, fear, lack of deep education, ill health and cynicism. The consequences of this will be to change once and for all, the nature of our society: so that when we do finally wake up, we will look at our diminished freedoms and relative impotence and cry aloud for the world we have lost. I hope I am wrong, but in my water I feel despondent.
Please read on.
The closure of Jack’s works was announced by one of the top executives at a snap meeting called one morning. The meeting was held in the staff canteen.
Jack could not believe his ears. He seemed in a dream as the executive, assisted with graphs and a portable overhead projector showed how sales had declined while costs had risen and productivity had remained constant. The executive concluded, “I’m sorry. And I know this will have come as a shock to most of you, but the decision to suspend operation for a time is final. Wage settlements including holiday pay are being drawn up by the accounts dept. I think that’s all there is to say.”
An angry murmur could be heard in the canteen. The senior executive departed hurriedly. The door was held open for him by one of the sales staff, and he climbed into his Holden Commodore and drove speedily away.
One of the problems of capitalism is that it places economic power in the hands of a small number of executives who may or may not be men of honour. They usually have privileged knowledge or have the means, though clever manipulation, to hide the truth of their undertakings until disaster strikes. Dependent on the wisdom of these men and ultimately on the economic and social theory that guides their actions, are a large number of other human beings who are the employed.
New Zealand governments of recent years have placed their faith in the economy as a means of “saving” the country. The argument runs as follows: If we can encourage exports while holding down imports and restricting domestic spending, the country will prosper, the external debt will be paid off and… (beyond this point we can begin talking about the kind of society we want and can afford.)
By and large economies are of two types, those that are regulated and those which trust the market place. Regulation is now not in favour in New Zealand as it hides true costs even though regulation might benefit less advantaged segments of the society or give the economy a competitive advantage. Of course, within these broad categories there is room for a great variety of national economies: witness for example the differences between Japan and Sweden. The important thing is to develop an economy which is in accord with the nature and values of one’s society. Have we done this? Are we at present perhaps imposing economic structures and patterns which have little organic relationship to our country?
In recent years, our governments have privatized and sold off public assets frequently, let it be said, in defiance of public outcry. The sale of Telecom is but one instance. We have developed a market driven economy, as the jargon has it. In simple terms this means trusting the market place, where supply meets demand, to regulate affairs.
This might not be too bad if the market place in some way took account of social values, but it does not. The market place is mindless and lacks both imagination and moral sense. It does, however, respond to aggression. The market driven economy is associated with the catch-phrase, “User pays” with which we are now sickeningly familiar.
One of the characteristics of catch phrases is that they numb the ability to think by providing snap answers to questions that may be subtle and complex. Hence, “User Pays” may be fine when it comes to an individual consumer’s purchase of non-essential, private, luxury goods, but it is lethal when it applies to essential goods and services for it emphasizes inequality. Charging for essential services widens the catchment area of the poverty trap while reducing the aperture from which the inmates might escape and is totally destructive of the fabric of society.
It is one of the tragedies of our economic system that we tend to reward those who already have abundant resources and deny those who have scant resources. One of the reasons why capitalism is so strong is that in its structure it reflects the pyramidal power structure of government. This empowers capitalism in subtle ways and makes its destructive economic consequences seem almost like a law of nature. But they are not. Power and resource sharing are just as valid as (say) proportional representation, which in their own way they reflect. However,
That night at home, Jack talked the matter over with Jill. She tried to cheer him up. “Don’t worry, love. It’s not the end of the world and I still have a job. And besides, you’ll soon get another job and if you don’t, there’s always the dole.” she said. “And I have something special to tell you.”
“I don’t want to be a dole bludger,” said Jack.
“Of course you don’t.”
“I’m fit and strong. And besides, I like working.”
“Of course you do. But the dole is just a way of making sure that when people get hit by hard times, they don’t die of starvation, or have to sell off everything or go begging or something. You’ve paid for it in your taxes. It is your right.”
“I suppose so,” said Jack uneasily, being unconvinced but not wanting to enter into an argument.
That evening they watched telly and eventually went to bed and made love. But still Jack could not settle. He finally rolled over on his back and sighed. “You know what they were saying at the works? They were saying that the closure was planned so that the management could re-organize and offer new contracts. What does it all mean?”
Unlike Jill, Jack had never really concerned himself with politics or had looked closely at the way society was managed. “That’s for them in the beehive. That’s what they’re paid for, isn’t it?” he’d said, echoing his father. Jack had been much keener on sport than politics, following the fortunes of the All Blacks and the All Whites and the Young Guns, and enjoying tramping into the bush and swimming. To him, if people did not do well it was somehow their own fault, probably through laziness. The dismissal he had experienced this very day was the first time that life had actually hit him a punishing blow and he did not quite know how to cope.
“You haven’t asked me what my secret is,” said Jill, cuddling up to him in the darkness.
“OK What is it? You won on Instant Kiwi?”
“I’m going to have a baby. We’re…”
Jack was unemployed for four months and eventually pocketed his pride and did apply for unemployment benefit only to discover that he was not eligible. Jill earned $380 per week before tax giving them a monthly income, before tax, of $1520. The cut off figure was $377 per week or $1,508.
Jack found the daily round of applying for jobs followed, as it seemed by automatic rejection, demoralizing at first. But then he found some companionship in the thousands of other people who were also unemployed and many of whom had been unemployed for much longer than he had. There were even people with university degrees who could not find work.
“Why was I made redundant?” asked Jack. “Why are there so many unemployed? What is happening in this country?”
One of the unemployed, an economics graduate, took Jack to one side one day and explained some elementary economics to him.
“You see, the Government following Treasury are wedded to a particular economic philosophy whereby Inflation is seen as the main economic evil since it destroys the value of your currency, makes you look like a banana republic, makes economic planning almost impossible and creates massive discontent. Now, to bring inflation down you must curb demand. You curb demand by taking money out of the system.”
“But I thought they wanted economic growth.”
“But if there is no demand, won’t firms go bankrupt?”
“Those that are inefficient will. Or that’s the argument. Of course, “inefficient” may mean that they have too many people on the payroll. So they trim the wage bill. Sack a few. Or get them to take redundancy..”
“What happens to them?”
“They become unemployed. Either they find another job or they go on the dole.”
“Just a minute this doesn’t make sense. The Government wants growth in the economy, right?”
“But they want to choke off demand because it’s inflationary. Right?”
“So. Why have they cut benefits? Surely that reduces demand thereby stifling growth while reducing income tax which would help pay for benefits etc. Surely all they are doing is increasing executive financial-manager type middle-men who take home a salary without creating wealth?”
“Hey, who’s running this country, you or Ruth Richardson?”
“But that’s silly.”
“The puritan mentality believes it is good for you. Listen to all the metaphors about taking harsh economic medicine. Doesn’t it make you tingle? But that’s not all.”
“If you create unemployment and cut benefits, what happens?”
“People become desperate.”
“And when people are desperate for food, shelter, and relief, what will they do?”
“In New Zealand? We’re too decent. Too used to pulling the forelock. Too respectful of authority. We’re not revolutionaries. Well not yet anyway. Bitter, angry and twisted perhaps. But tell me, what will we do when we are desperate?”
“Well I suppose we’ll take whatever job is offered.”
“Right. And so when you first create unemployment, you then need an Employment Contracts Act to make sure the workers never again get the upper hand. Mark my words.”
And Jack did. But still he could not find a job and so Jill’s income had to suffice.
At home, the standard of living which Jack and Jill enjoyed, while it had never been expensive or sumptuous, now declined in subtle ways: one less sausage in the pot, more meals made from mince, a decision not to buy a microwave, less times out at the pictures, a careful pondering of choices in the supermarket, more darning, more hours spent balancing the cheque book, more worry about the mortgage for this was suddenly a giant proportion of their income. Interest rates had not come down significantly and their only choice was to renegotiate their mortgage for a longer period.
At the same time, Jill’s pregnancy was not proving easy. At least her visits to the doctor were still free, but Jack walked in daily fear of himself becoming sick. The costs of being ill were suddenly savage, and illness became an item which had to be budgeted for.
We return to the question of user pays. The public health system of New Zealand is one of the country’s glories, envied by other countries, but it costs money and to survive needs to be backed by political idealism and political will. You will hear politicians say “I believe in the public health system but its is too costly as presently organized.” That means they do not believe in the public heath system but they do believe in cost accounting and are out looking for ways in which they can cut services. You will hear politicians say, “The small amounts which higher income families are being asked to pay for prescriptions, hospital residence and doctors’ fees is surely a small price for the maintenance of the public health system.” This might be all right if it were true, but the fact is that an administration has been installed in our public hospitals which is to gather money. Two years (or so) later, it will be found necessary to increase certain fees and require payment for other services – all in the interest of economy (you understand), all in the interest of maintaining the “present” system, all in the interest of helping the less privileged… And so it will go on. Gradually it will become accepted in the public mind that if you want medical help you must pay. Eventually the day will come when most services are privatized though they may not bear that name. We will look back in envy on the days when health care was paid for from the taxes paid by all citizens. The wealthy will have health insurance and the poor will have whatever scraps of social services are left in the trap. Do you doubt me? May I remind you that once there was television without adverts. Once programmes could be seen in their entirety without interruption. Now television, with its awesome power to mould public opinion, is the possession of commercial interests. However…
“Economizing takes a lot of time,” said Jill one evening. “They never told me that at poly tech.” Jack was suddenly aware how tired Jill was looking.
“You’re not overdoing things are you? Shall I rub your back?”
“It’s been a hard day. Doctor says I’ve got to get off my feet more.”
“I wish you didn’t have to work.”
“We’re lucky I’ve got the job. Just think -”
“Meaning what?” Jack was suddenly defensive. “I am trying to find work you know.”
“I know you are. It’s not your fault.”
“Its just that there aren’t any bloody jobs.”
He had raised his voice and Jill looked at him is astonishment and then suddenly broke down in tears. Immediately contrite, Jack came round the sofa to her and put his arm round her. “I’m sorry love. I didn’t mean to shout It just came out that way. I love you. I know how tough things are.”
He kissed her and she held him tight. “I’m not worried about us,” said Jill carefully. “Well be all right. Somehow. But, I was round at mum and dad’s today. You know that Denise has been having little blackouts recently?” Jack nodded. “Well, they’ve been to the doctor a couple of times. He’s done tests. He wants her to go for a brain scan at the hospital. There’s a chance, an outside one, that she might have a brain tumour.”
“Yes. Well, they made an appointment and there is a waiting list for over eighteen months. It could get worse in that time. It could even…”
“What are they going to do?”
“The doctor say they should get it done privately.”
“That’ll cost the earth.”
“I know. But they could get it done the day after tomorrow. They didn’t ask me but…”
“Well I wish we could just give them back a bit of the money they lent us.”
What would you do in a case like this, which is, I assure you, not fictitious? The gradual privatization of health is quite simply one of the most sinister moves of recent years. Let us remember, the wealthy can always pay or can afford proper insurance. The poor can not. No more clear division marks the gulf between the haves and the have nots. The fact is that many people will go without proper medical attention. I visited my doctor recently and when I rang to ask for an appointment I was asked when would I like to come. When I went to the surgery it was virtually deserted. Of course, to a government perplexed by National Super this may not be entirely a bad thing. The human body is resilient to a point. Aches and pains can be born, at least to a certain age. But the body does start to go down hill after fifty to fifty five and that is when the maladies of the younger years begin to take their toll. We can confidently expect that as health care becomes more expensive so people will choose to get by until the anguish is too great by which time situations which could have been treated are chronic and terminal. Ultimately the average age of death will lower and National Super will be less of a burden on the state.
So we begin to see how lethal is the environment of the Poverty Trap and how inescapable. However…
And then two days later Jack was offered a job. He started at 7.30 and finished at 5.00. The pay was poor and did not include travel costs. However, Jack was assured that the contract he was offered was completely in accord with the Employment Contracts Act.
“Take it or leave it. That’s your affair. There’s plenty more out there need the work. Just think, if you lived under Communism you wouldn’t have a choice.””
“I don’t have much choice as it is,” said Jack and signed his name.
He thus took on work that he did not want to do and that was not related to his interests and which would not bring a feeling of dignity or peace and happiness at home.
One of the most vicious characteristics of the poverty trap is that it denies its victims choice. We have already heard it said in this country that those who do not take work when it is offered should be denied unemployment benefits and the question must be asked, “In what ways is this system different from slavery?” Slavery is an emotive word and all its meanings revolve about the question of choice. When we talk about slavery, perhaps we think about black backs bent picking cotton in the Southern States of America while the white master sits on his veranda under a magnolia tree sipping coffee. Well many of these slaves exercised the only choice open to them and took their own lives whether by futile revolt or by felo de se. But one can also be a slave to a system. The poverty trap makes those inside it a slave for they can not exercise economic choice. The recent Employment Contracts Act has not only undermined the structure of collective bargaining but requires a high level of acumen on behalf of individual employees if they are to protect themselves. It has placed the control of employment firmly in the hands of the employers. To an employer, wages are an item of cost (and frequently a high item) and hence they seek to minimize those costs. To a worker, wages take their meaning from a combination of social and economic values among which must be included a sense of dignity and self-worth as well as the means of purchasing daily necessities. We have in a sense two incompatible value systems operating, and this explains why, as power falls more and more into the hands of the employers and contracts are negotiated more on employer’s terms, qualities such as loyalty, trust, and disinterestedness, tend to decline.
In this context we may also remember that the Employment Contracts Act does not encourage the high standards of safety insisted on by Unions and hence the workplace may be regarded as more dangerous while the quantity of toxic substances used in industry increases. This circumstance needs to be linked to my earlier comments on the increasing charges for health care and restrictions placed on accident compensation. However…
Discontent and a sense of helplessness preyed on Jack’s mind.
He observed himself change and harden and become mean. One day he found a man’s wallet. It contained twenty five dollars as well as credit cards and two undeclared cheques. Jack took the money and handed the wallet to a traffic officer saying he had found it on the path. While shopping, he received wrong change in his favour and said nothing even though he knew that the teller at the supermarket would have to make up the shortfall herself. He was tempted to shop lifting but didn’t quite have the nerve though he came to admire those who did. He became indignantly angry when he received change for five dollars claiming that he had handed over ten. Later, when he found the ten dollar bill rolled up at the bottom of his pocket, he did not go back to correct the mistake. He took to looking in the gutter for change.
He felt angry and bitter and powerless. And if he could have found one single cause for his bitterness he would have struck at it with both fists.
One evening he heard the Prime Minister say on television that unemployment and violence are not necessarily connected and suddenly, the contempt he felt for politics, politicians, so called experts, the wealthy and the privileged spilled over. “What do those bastards know?” he shouted. “Get them down here. They’ve all got land. They’ve all got businesses. They all earn good money. They all have guaranteed retirement plans. They can ignore us.” Jill looked at him in astonishment. “No body cares. They say they do, but they don’t Dog eats dog. That’s the way it really is. We’ve been lied to and cheated. Damn them all. Damn their filthy, inefficient cruel, mindless system. Damn them. Damn them. Damn…”
Jill was both privileged and aghast to see her husband cry.
But then he faced her. squarely. “But don’t you see it. Employment breeds poverty and poverty breeds crime. No wonder they want to amalgamate the Traffic Service and the Police. It’s got nothing to do with efficiency. They need more police and quickly too, because the rate of crime is going to go up and up and up.”
A few days later Jill met an old friend of the family, an unmarried woman that Jill had grown up calling Auntie Jessie, a woman who for all her life had been a school teacher. Jill saw in her friend’s eyes the same hunted and haunted look she had seen in Jack’s eyes.
“I’m afraid that bulk funding will mean that I am dispensable,” said Jessie.
“But you have years of experience.”
“Yes. And therefore I cost too much. They could employ two teachers straight out of college for what they pay me.”
“But they can’t just fire you.”
“There are many ways of getting rid of someone. Destroy my pride in my profession. Make me feel inconsequential. Make teaching a job rather man a vocation. Insensitivity begins at the top and works its way down. I have always believed that education was for the entire human being. But increasingly we are being forced to educate people so that they can pass tests, so that they can get a job, fit into the work place. We will end up with people who are literate without discrimination and numerate without values.”
“You sound bitter.”
“I am bitter.” Jessie looked at Jill sharply. “And you must be careful too. You’re going to have a baby. Well I hope you find a good school. The simple truth is that schools in poor economic areas are going to get poorer. They can not gain special expertise on their school boards. They can not fund raise to the same extent They can not afford the best teachers. Because teachers are human beings too, you know, They want the best for themselves. They will go where the money is – well most of them will. Wealthy schools will of course protect themselves. They will become well endowed and they will have the best equipment. The same polarization which you are seeing in society between the rich and the poor is being encouraged in education. Of course, the child of natural ability will always succeed. But they are the minority. For the majority, where they start is where they will end up. Yea even unto university and beyond into the job market. Yes I am bitter. We had one of the best school systems in the world based on an ideal of what we wanted a human being to be, just as we had one of the best health systems in the world. But because of a few faults we have let it become a pawn in the hands of politicians, or whoever controls the politicians, right wing idealogues who are so blind to human values that they want everything to have a price.”
Jill could think of nothing to say. Jessie’s anger overwhelmed her.
That night she watched television and saw teachers threatening to strike and hospital workers marching in protest “There’s still hope,” she thought.
So there you have the dimensions of the Poverty trap.
Like most events in life, it does not suddenly spring fully formed into existence but is gradually built, bit by bit, even sometimes by those who do not know what they are doing and who would be horrified if they could see how the piece of legislation they admire is itself part of a total plan of repression.
We are all born equal. But a second after birth politics takes over and men and women are diverted into paths of slavery or control. In a sense, all of us are slaves to a system which, having a materialist base, pays scant regard to humanist values in other than a token sense. Thus, no one would nowadays say they support slavery, but in their actions and philosophy they do by allowing systems and policies to persist which encourage inequality.
The poverty trap already exists. Current policies in Education, Health, Social Services and Employment are all in their different ways contributing to its existence. Only by a complete repudiation of materialist values and a sturdy no-nonsense affirmation of humanist values and, yes, socialist values, can it be overthrown. There are alternatives. But let no one think this is a party political broadcast. The ills we currently suffer have been created by the cynicism, lies, contempt for democracy and power games of both main parties. I am sorry for any lack of subtlety in this article, but sometimes it is necessary to paint in broad brush strokes and with bright, albeit garish, colours, if one wants a pattern to stand out clearly in a time of murky light.
So. Now it is now over to you, the reader, to write a happy ending to the story of Jack and Jill.