Academic journal article New Zealand Sociology

Work and Inequality in Neoliberal New Zealand

Academic journal article New Zealand Sociology

Work and Inequality in Neoliberal New Zealand

Article excerpt


Developed capitalist economies have experienced considerable changes in labour markets, the nature of work, and work-related inequalities over recent decades. Changes in New Zealand have paralleled those in other countries which adopted the neoliberal prescription of a market-oriented economic model. This has produced relatively high levels of joblessness and greater flexibility and insecurity in employment than in the past. The decline in manual production work and growing demand for professional and managerial skills has also caused some significant shifts in class structure. The benefits of economic restructuring and reform have not been evenly shared, favouring capital at the expense of labour, and skilled workers at the expense of the less skilled. This article uses official data sources to examine these changes in the context of New Zealand's economic transformation since the 1980s.


The radical transformation of New Zealand's economy in the 1980s and 1990s entailed major upheavals in production and employment. The post-War decades had been a time of industrialisation, full employment and wage growth, under the direction of an interventionist state and abetted by an expedient compromise between capital and labour. But the global crisis of the 1970s undermined the foundations of this economic model and gave impetus to the gathering forces of neoliberalism and its advocacy of free-market capitalism. New Zealand was a relatively late convert to the neoliberal doctrine that was already transforming other developed capitalist economies, but from 1984 onwards it embraced it with unparalleled zeal as it embarked on a comprehensive project of restructuring and reform. The effects on the labour market were severe as production industries withered from exposure to global competition, domestic demand slumped and unemployment soared. It was a process of creative destruction and in time the economy and employment recovered, but what emerged from the wreckage was a very different economic model and a very different labour market. Job growth was in different industries and occupations from those which had borne the brunt of restructuring, the labour market was characterised by greater labour surpluses and more flexibility and insecurity, and organised labour had been severely weakened. The result was a more inequitable relationship between capital and labour and between workers who had been either the victims or beneficiaries of the restructuring project.

This article explores the changes in New Zealand's labour market and employment structures in the context of the economic transformations occurring locally and globally since the 1980s. It begins with an overview of the restructuring process, drawing out key distinctions between the before and after economic models and their implications for the capital-labour relationship and labour market. It then looks at three particular aspects of change in the labour market and employment structures with consequences for inequality: the co- existence of labour surpluses and skills shortages, the trend towards more flexible and insecure forms of employment, and changes in class structure resulting from shifts in relations of production and divisions of labour. There are some limitations in the scope of the article given the constraints of space: it does not include any empirical analysis of the relationship between labour market change and income inequality, and nor does it examine the consequences for gender and ethnic inequalities in any detail. These are obviously important dimensions of the story and are touched on at various points of the narrative, but they warrant more detailed analysis than can be given here.1

A new mode of development

The story of New Zealand's neoliberal revolution of the 1980s and 1990s is well known and does not need to be recounted in any detail here (Kelsey, 1995; Roper, 2005). However, to understand its transformative effects on the labour market and employment structures it is helpful to place it in some historical and global context. …

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