Shioh Groot - Precarity: Uncertain, insecure and unequal lives in Aotearoa New Zealand

T he precariat is a structural feature of globalisation and is growing in all parts of the world, reflecting the impact of policies to make labour markets more flexible and open, and the impact of the ongoing technological revolution.

Governments, including New Zealands, have pursued social policies that have further expanded the precariat, in the ostensible pursuit of competitiveness. But they have done so in an inequitable way, by making labour relationships more insecure and uncertain. In sum, the precariat is not an incidental feature, or some failing of economic development. It is wanted by those steering and gaining from a global system that has veered a long way from anything close to a textbook version of a free market economy.

As described elsewhere, the reality is that we have a system best described as rentier capitalism, in which private property rights have triumphed over free market principles. That economic reality is outside the sphere of this book, but it is the context in which those entering or stuck in the precariat exist, and explains why their incomes are stagnant in real terms and increasingly uncertain.

There is an ongoing Global Transformation, in which a global market system is gradually taking shape. Old systems of regulation, social protection and income distribution that worked reasonably well in the middle decades of the twentieth century have broken down or been dismantled. But new systems suited to the more open, flexible economies have not yet been designed or put in place.

They are needed as a matter of urgency. A class fragmentation is taking shape that is forcing the precariat to hear a disproportionate cost in terms of disruption and multiple insecurities. So far, governments have reacted passively and have done remarkably little to alleviate those insecurities, typically resorting to tired strategies designed in a different age.

The precariat is defined primarily in four dimensions, and it is analytically and politically important to recognise all of them, not just the first and most obvious, the insecure labour relationship. Indeed, one could say that is the least important. Why would anybody want to be in a stable, secure job if it was stultifying, onerous, stressful and low-paid? And most of us would hate ourselves if we were stuck in the same job, doing the same few tasks, for years and years.

What is more important and worrying is that those in the precariat typically have no occupational narrative or identity. They feel they are going nowhere in their jobs. And they typically must do a great deal of work that is not labour, work that is neither recognised statistically nor remunerated in any way, but which must be done.

The second feature is that, in most countries, although less so in New Zealand, members of the precariat have to rely mainly if not entirely on wages. They do not receive the sort of non-wage benefits and subsidised services that members of the salariat usually receive, which are worth a great deal, such as occupational pensions in prospect, paid holidays and paid sick leave. In New Zealand, the Kiwisaver scheme at least offers a universal occupational pension for those who can pay into it.

In any case, conventional income statistics underplay the value of non-wage benefits and thus understate the extent of income inequality. But to make matters substantially worse, the wages available to the precariat are not just low but have been stagnant or declining. This is a global phenomenon, and policymakers and those representing the interests of the precariat must recognise that this is unlikely to change in OECD countries for years to come. Wages are likely to fall in real value.