S02E02 - The Widening Economic Gaps in Aotearoa

Summary

Max Rashbrook discusses the disparities in wealth and income distribution in New Zealand, highlighting the impact of low wages and underemployment. He explores the challenges of increasing the minimum wage and the need for higher value sectors in the economy. Rashbrook also emphasizes the lack of government investment in research and development and the influence of the real estate market on capital allocation. He concludes by discussing the historical factors that have contributed to the current situation. The conversation explores the lack of support and investment in skills and training, wealth inequality and the dominance of the fire economy, the need for a capital gains tax, transitioning to an inclusive economy, policy changes for an inclusive economy, and the power balance in the workplace and the role of unions.

Takeaways

• Wealth and income distribution in New Zealand is highly unequal, leading to a dysfunctional society with different opportunities for different individuals.

• Low wages and underemployment are significant issues in New Zealand, with many people struggling to make ends meet.

• Increasing the minimum wage can have positive effects on productivity and worker well-being, but it must be balanced with the viability of businesses.

• New Zealand needs to invest in higher value sectors and research and development to create high-paying jobs and drive economic growth.

• The real estate market and capital allocation play a role in the lack of investment in manufacturing and other productive industries. There is a lack of support and investment in skills and training, leading to a mismatch between the skills needed in the job market and the skills possessed by workers.

• Wealth inequality is a significant issue, with a small percentage of the population owning a large portion of the country's wealth.

• The dominance of the fire economy (finance, insurance, and real estate) contributes to wealth inequality and the lack of taxation on capital gains.

• Transitioning to an inclusive economy requires a shift from an extractive economy to one that invests in people's potential and physical infrastructure.

• Policy changes should focus on maintaining a decent minimum wage, investing in retraining programs for beneficiaries, and increasing investment in research and development.

• Unions play a crucial role in balancing the power dynamics in the workplace and ensuring fair wages and working conditions for workers.