How Smart We Are

Beware People in Black Robes
The aged care industry in New Zealand had laboured under government price controls for many years.  Our “socialism without doctrines” has led us down the track of the government funding rest home care for the elderly.  Once upon a time it was incumbent upon each family to ensure reasonable care could be afforded for aging parents and grandparents.  But gradually the state has subsidised and paid more and more of the care of the elderly.  Smug New Zealanders patted themselves on the back and said to one another, “What a wonderful system we have here in ‘godz own’.”  

Baby boomers are now entering the demographic cohort of the “aged”.  Large numbers are needing care.  There is a burgeoning aged care industry, with large corporates building swanky retirement and rest-care facilities.  But the industry has been effectively price controlled.  The presence of a state subsidy for rest home care functions as a price control in the market.  Therefore, the market is inefficient.  Price signals are grossly distorted.

Recently the government was (indirectly) hit with a court case.  A rest-home carer took her employer (and implicitly, the state) to court on the grounds of pay equity.
 The argument was entirely specious, but the courts looked with favour upon the plaintiff.  It ran like this: rest home care is an industry dominated by a female work force.  While, to be sure, this work force was getting paid higher than the minimum wage, it would be paid substantially more if males were being employed as carers, and it was a male dominated career.  In other words, the work force in the rest home industry was suffering under sexism.

August judges took it upon themselves to determine what wages these women should be paid.  They found for the plaintiff.  Now the government was between a rock and a hard place.  Either it had to increase the level of state funding for rest home care, or it could do nothing, and let the industry hit the wall.  With great political sagacity, the government decided it had to pay more in rest-home care subsidies.

Care workers in women-dominated industries will get pay rises worth up to a $5000 a year after a historic settlement with the Government.  In all, the package will cost more than $2 billion and could require a lift in ACC levies or higher fees for aged care residents.  It will cover 55,000 care workers, mostly women, in the aged residential care, home support and disability service sectors.

The settlement comes after a pay equity claim brought by E Tu (previously the Service and Food Workers Union) on behalf of care worker Kristine Bartlett against her employer TerraNova.  It is the first legal settlement in New Zealand which recognises that some jobs pay less because they are done mainly by women. [NZ Herald.  Emphasis, ours.]

Behold the implicit socialism of the court.  The taxpayer will pick up the bill.  No other option.  If rest-home providers end up going bust as a result, have no fear: the government will pick up the tab by paying higher rest home subsidies.

As one blogger put it:

 A 49% pay increase for no productivity gain. If this was a private sector employer they’d go bust. Instead we’ll just pay more in taxes and ACC levies.

There are lots of occupations in New Zealand where the labour force is predominantly made up of Pacific Islanders and Maori.  We are now awaiting the next iteration from our self-aggrandizing courts: pay in such positions and labouring occupations is self-evidently and clearly less because the jobs are being done by people of colour.

Yet another iteration will undoubtedly follow.  It is self-evident that young people get paid less than older people.  Hah, our socialist courts will doubtless say, youth are getting paid less than older people because they are young.  Ageism is a violation of human rights.

There will be no end to it.  Social justice activists ruling though the courts.  A new elite from Mars has just taken over.  What a dumb, dumb government with which we are afflicted.  What a wonderful system we have here in “godz own”.
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