How unions can fight inequality

How unions can fight inequality

Unions can help reverse the growing class division in Aotearoa argues economist Max Rashbrooke in his new book.

In the mid-1980s, the wealthiest one percent owned an already disproportionate 16% of the country’s assets. As far as we can tell from limited data; the figure has skyrocketed since then to 25%.

Among the causes of this rise are the privatisation of previously public assets, the government’s failure to ensure the housing market works for everyone, and other changes brought in as we shifted to a pro-market, hyper-individualist mindset in the 1980s and 1990s.


Another major cause, as I outline in my new book Too Much Money: How Wealth Disparities Are Unbalancing Aotearoa New Zealand, is the shifting power balance in the workplace.

In the last 40 years, the power of employers has risen sharply, particularly due to their increased status in public debates and their ability to move (or threaten to move) operations offshore if they do not like government policies. Conversely, the power of workers has diminished as the numbers covered by trade unions has fallen from 70% to just 17%.

As the former CTU economist Bill Rosenberg has shown, if wage and salary earners had retained the share of company revenue that they enjoyed in the 1980s, the average wage would now be around $14,000 a year higher. (The story is roughly the same if one looks at the way that wages have failed to keep up with productivity gains.) That company revenue goes instead to business owners – to capital rather than labour, in technical terms.


The result is that business owners’ wealth rises (assuming they save even a small percentage of that increased revenue), while wage and salary earners struggle to save out of their inadequate pay.

Wealth disparities widen. And since wealth now buys other advantages – better housing, enhanced political power, greater opportunities for one’s children – inequalities in well-being also grow, disparities are passed down the generations, and social and class divisions become entrenched.


If workplace dynamics are at the heart of this widened inequality, so too are they central to the solutions. Fair Pay Agreements and pay equity settlements can strengthen workers’ bargaining power and raise salaries for those whose pay packets have long been inadequate.

Further changes will be needed, though: perhaps something along the lines of the ‘union default’ idea being promoted by Waikato University’s Mark Harcourt, in which employees would be automatically enrolled in a union and would have to consciously opt out, as they do with KiwiSaver.

More broadly, renewed investment in core public services like education and health – what I call ‘the engines of opportunity’ – is needed to ensure that life chances are close to being genuinely equal and the fabled ‘fair go’ becomes more than just a slogan.

Too Much Money is available from your local bookstore or

You can win a copy if you tell us what proportion of the country’s assets did the wealthiest one percent own in the 1980s. Email to go into the draw.

Also in this issue:

President's message

At the beginning of 2021, I doubt anyone imagined we would be in the situation we are in right now in Aotearoa.

Read More

Nothing about us, without us

Members of the PSA Deaf and Disabled network say the new Ministry for Disabled People must employ, represent and consult with people with all disabilities.

Read More

Mourning our Kaumātua

Kua hinga te tōtara i te wao tapu nui a Tāne, te hunga kua mene ki te pō.

Read More

Meri Kirihimete me ngā mihi o te tau hou!

Here are some kupu hararei to add to your kōrero over the festive break!

Read More

Kia Toipoto: Closing Gaps

An ambitious new plan aims to close pay gaps for women, Māori, Pacific peoples, and other ethnic groups across the public service and crown entities including DHBs.

Read More

Equal pay delayed is equal pay denied

DHB members went to Parliament in October to push for the speedy resolution of their equal pay claims.

Read More

More ambition on emissions

Last month on the eve of COP26, the government set out its updated international commitments to reduce emissions – which have been heavily criticised for outsourcing our responsibilities.

Read More

Training together online

Every year the PSA educates hundreds of delegates to support members in the workplace, so being able to moving training online during Covid disruptions has been a priority.

Read More


Thanks to the PSA winners of Public Service Day Awards who have shown outstanding service to their communities in 2021.

Read More

A high trust relationship

The Department of Conservation has been praised for having one of the best industrial relationships in the public service.

Read More

A safe world of work

Imagine a world where all of us, no matter where we work or what we do, are safe from violence and harassment.

Read More

Transforming Health

The government’s reform of our health system is drawing closer.

Read More

Leaving a lasting legacy

Changes to labour laws in Qatar in the leadup to the 2022 FIFA World Cup show how international sporting events can help promote human rights.

Read More

“This medal is ridiculously well-deserved”

A wheelchair has proved no barrier to Dr Gerald Rys continuing a distinguished career in agriculture and science that’s been recognised with a Public Service Medal.

Read More

Leading the way

When Sripriya Somasekhar received the NZ Public Service Medal, her citation declared she “lives and breathes” her commitment to inclusion and diversity.

Read More

“The work is changing day by day”

The last few months have been amongst the toughest of the pandemic for Aotearoa, and our members have continued to go above and beyond to support their communities. Here are a few of your stories.

Read More