Friday, August 15, 2014

Educational Readings - so called ed research/ Finland/ Educ myths/ Corporate takeover!



By Allan Alach

I welcome suggested articles, so if you come across a gem,
 email it to me at allan.alach@ihug.co.nz.

This weeks homework!

A Big Problem with Ed Research
If this article is accurate (and theres no reason to suspect otherwise) then the basis of Hatties mega-analysis research may have been severely undermined.

It means that very likely a great deal of what's passed off as research-based knowledge is information that has never been checked, the result of just one piece of research. Imagine if you were seriously ill and your doctor said, "Well, there's this one treatment that only one guy did only this one time, and he thought it turned out well.'

Revisiting Content And Direct Instruction
This is a very important article about the battle for education in America (and applicable elsewhere) over the last century. The seeds of todays problems were sown a long time ago, and survive, in spite of visionaries such as Dewey and Freire.

Before diving into the content and direct instruction debates, I want to address what is really going on. You dont have to read George Orwell or Ray Bradbury to know this (although you should*), but the powerful in any society recognize that those who control knowledge (and language is knowledge) ultimately control everything. Thus, to codify what is known, what counts as knowledge, and what facts mean is to establish power.

A Conversation On Lessons From Finland
More from Pasi Sahlberg, this time in conversation with an Australian educator. Very applicable all over, especially in the usual five Anglo-Saxon dominated countries.

Your question about the value of PISA is like asking what do you think about fire! They are both useful and can benefit our lives significantly if we know how to deal with them. Unfortunately PISA is often like a box of matches in the hands of a child. PISA certainly has had negative consequences in some places where it has taken the drivers seat in determining priorities in national education policies. There are a number of countries now (including Australia) that have formulated their goals in education to be on the top of the global league tables. An over-reliance on reaching such targets, by insisting that schools and teachers focus on a narrow area of academic achievement at the expense of broader learning and personal development goals, may have worrying effects later on.

The Time is Now
An article by Dr Robert Valiant, sourced from the US website Defend-Ed.

I have been doing a little reading on one of my true loves, brain research, and would like to take a moment to say that rapid growth in the field is producing astounding findings that are important to those of us in the brain business, teaching and learning. I am, of course, dismayed by the current education reform efforts, most of which appear to be diametrically opposed to the new research findings. I won't go into detail here, but even on the macro level the predatory reformers have it wrong.

Manufactured education
Another blog posting from UK academic Steve Wheeler:

And yet standardisation, synchonisation and centralisation stubbornly persist in a few notable enclaves. Perhaps the most notorious resistance to the technological wave comes from the state
education systems. And:

The factory model of education persists, because in the mind of its proponents, it is still the most efficient, cost effective way to train the workforce of the future. And yet, according to critics such as Sir Ken Robinson, this is not the way forward. In a recent speech, Robinson intoned: "We still educate children by batches. We put them through the system by age group. Why do we do that? Why is there an assumption that the most important thing kids have in common is their date of manufacture?”’

Education As Great EqualizerDeforming Myth, Not Reality
A very comprehensive article that debunks the neoliberal myth that education is the solution to poverty.

So, you are 2.5x more likely to be a rich adult if you were born rich and never bothered to go to
college than if you were born poor and, against all odds, went to college and graduated. The disparity in the outcomes of rich and poor kids persists, not only when you control for college attainment, but even when you compare non-degreed rich kids to degreed poor kids!

Growth Mindset The Holy Grail Of Education?

The author of mindset theory, Carol Dweck, cited neuroscience research that examined brain activity of students when receiving feedback. Students were asked various questions and then told whether they were right or wrong. If they were wrong, they were also told what the correct answer was. Pretty much every students brains were active when being told whether they were right or wrong but only growth mindset studentsbrains remained active to hear what the correct answer was if they had made a mistake."

Ranking and Sorting: The Sordid History of Standards and Tests
Very important article by Anthony Cody, which will give you the essential understanding of the whole testing and standards movement. Its not nice.

One of my heroes was the late Stephen Jay Gould, who devoted his life to exploring and explaining the intricacies of evolution. In his book, The Mismeasure of Man, he reveals the roots of standardized testing in the work of Lewis Terman, who brought to us the first widely applied tests, building on the work of Binet, who had pioneered intelligence tests for inductees into the Army during World War 1.
This scienceof measurement was also connected to a movement called eugenics.It was seen as undesirable for the less intelligent to reproduce, since their offspring would be inferior, and thus a burden to society. And there were heavy racial implications as well.


This weeks contributions from

6 Things You Should Know About The Future
Bruce: The futures not what it used to be!!

Thats the funny thing about the future.  Its never as fantastic as we hope nor as horrible as we
fear.  The one thing thats for sure is that times will change and we will have to adapt. While there is no way of knowing exactly how that change will play out, we can identify trends, make common sense judgments about where they lead and prepare for them.

Why phonetic spelling isn't effective
GERMers seem to love phonics as the solution to everything (e.g State of New South Wales in Australia). They obviously havent read Frank Smith.

However, it seems to me, that those people who want phonetic spelling have not thought through all the problems that would be created by it. The problem is that different people pronounce some words differently and so would spell them differently phonetically. Amongst people who speak English there are many different types of accents and thus pronunciations.

15 Things Every Teacher Needs from a Principal
Bruces comment:Seems an insightful list to me.

Principalshipentails many things, but at its core, it isand has always beenabout building trusting relationships. We may balance the budget and successfully maintain the building; we may ensure that teachers have the necessary resources and all the professional development opportunities in the worldbut if we fail to build trusting relationships, what good are balanced budgets, SMARTclassrooms, one-for-one programs, and squeaky clean amenities?

From Bruces oldies but goodies file:

The corporate takeover of society and education.
This is the GERM that needs to be challenged the key issue of the upcoming NZ election. One of Bruce's most popular blogs.

As part of the corporate strategy was the demeaning the teaching profession through finger pointing and blaming them for student failure while at the same time ignoring the effects of poverty
on student achievement. The market forces  corporate ideology places value on hardnosed economic growth and demonizes teachers and schools as failing students and being stuck in the past. To reform this seemingly failing situation a standardised model has been implemented which has resulted in a one dimensional approach to education with success being determined and measured by narrow literacy and numeracy levels in primary school and NZCEA levels in secondary.

Another expert on teacher quality? Disruptive or dangerous?
While this article is about New Zealand, it discusses a problem common to all GERM countries, and also the OECD, where economists feel qualified to comment on education and teacher quality. Dangerous.

No one would challenge Makhlouf's assertion that education is the key to economic success but how one defines achievement ( in a narrow literacy / numeracy sense, or the development of
student's talent and gifts) needs debating. And as for Makhloufs enthusiasm for performance pay, once again, this depends on what is counted as achievement. Performance pay has had a checkered career in the US. Makhlouf , being an economist, believes it is all about collecting data to measure success. Simplistic stuff - important learning  attributes defy easy measurement.

Basing education around student inquiry.
Bruces comment: This popular blog  outlines a discovery approach NZ creative teachers at all levels are aware of.

Well-executed PBL begins with the recognition that, as in the real world, its often difficult to
distinguish between acquiring information and using it. Students learn knowledge and elements of the core curriculum, but also apply what they know to solve authentic problems and produce results that matter. Students focus on a problem or challenge, work in teams to find a solution to the problem, and often exhibit their work to an adult audience at the end of the project.

The Blue School

The Blue School in Lower Manhattan was established by members of the Blue Sky Company -a company involved in helping organisations develop creative ideas.They wanted to establish a school
that celebrated the creativity and ideas of children - they wanted to establish a school they would have liked to have gone to - a dream school for their own children. They wanted school committed to keeping alive the sense of wonder, play and joy of young children. The school currently caters for children from 2 to 6. The ideas will not be new to creative teachers, particularly those that 'teach' younger children but their emphasis on making student inquiry central is a challenge to us all in these day of making literacy and numeracy achievement central.

This weeks contributions from Phil Cullen

A History of Blanket Testing
This is a powerful article from Phil that discusses his experience of Minimum Competency Testing in the USA in 1980. You will notice that apart from a change of name to common core standards, not much has changed. This is a must read.

Did I hear you say that things are different these days? Well. This is a personal account from back when. In 1980, I visited the USA and the UK for the express purpose of studying the Minimum Competency Movement in the USA and the Assessment of Performance Unit in the UK, both politically-produced ordurous reactions to the Back to Basics meme of the 1970s. The 70s standards debatehad been a vicious attack on schooling that was lasting far too long. In Australia, it was led by The Bulletinand one or two conspicuous non-teaching attention-grabbers in each state. It died in Australia as it deserved to do before the the educational dementia of national blanket testing set in. Not so in USA. Sad consequences there as reported below.

Tuesday, August 12, 2014

Back to school to see what really happens in the classroom – Nigel Latta


In recent years politicians from the ‘right’ have given the impression that our schools are failing – our current Minister is fond of saying ‘one in five of our children are failing’ and that the
introduction of National Standards will solve the situation.  ‘We so often hear stories about how standards have fallen,’ said Latta, ‘that you would be forgiven for thinking the sky has fallen in’.

With this in mind I was very curious about the conclusions Nigel Latta would come to after returning to school classrooms to see for himself. .

The two schools chosen to visit were Pakuranga College, a co-ed secondary school, and Point England, a low decile primary school. He wanted to get a grasp of how things like the basics were being taught.

What he found out was that schools were very different from his own school days.

 Today it is about helping students discover meaning while in his day, teachers had the ‘knowledge’ and they passed it on to their students.  Nigel reflected that he hated his own secondary schooling which ‘was boring. You sat down and shut up’. Nigel was to be very impressed with the involvement of students in their own learning during his class visits.

His first visit was to Pakuranga College.

 He wanted to find out about NCEA (National Certificate of Educational Achievement) which, even after a decade, many parents are still confused about. Many older parents sat School Certificate. Why had things changed? The principal, Michael Williams, answered by saying ‘with SC half the students failed’ and that in the past ‘school was a very effective sifting system and that NCEA changed the mold’.

So Nigel thought it might be fairer, but was it better? Prof Stuart McNaughton reported to Nigel ‘that NCEA gives a full picture of what a student can do….ranking exams like SC give a hard-nosed high stakes assessment…NCEA is fairer’.  The introduction of NCEA had changed the curriculum and the way things were taught, ‘education was once about replication today it is about problem solving’.

Nigel sat in a number of classrooms to see for himself, much to the amusement of the students.  His experience of Design Technology left him amazed when he observed students experiencing ‘
Maths lesson
a range of complex skills relevant to the real world.’
Sitting in on  physics  was another powerful lesson for Nigel as was English

He wondered if in this exploratory process was academic knowledge  being lost?

For an answer he turned to Prof John Hattie a world recognised authority on educational research. Nigel wanted to know how well we were doing in education and ‘why we are always led to believe there is a crisis?  Hattie replied that ‘fundamentally we have a very good system and this is entirely credited to the quality of the teaching profession’. This is in contrast to what some politicians tell us!

Prof Hattie told Nigel that ‘the purpose of education is to help students exceed their potential’ and that good teachers ‘care passionately to see something in their students’and added ‘luckily we have a lot of passionate teachers’.

Nigel sat in a maths lesson to see if students were being taught maths properly. The maths teacher explained that today maths is about learning strategies and that in the past, maths was about getting the right answer. In the past few people experienced mathematical thinking and as a result ended up hating maths. ‘Students need to play with maths to solve problems rather than follow procedures without understanding’. The students were learning and enjoying maths in a way that Nigel never experienced in his school days.

Another mind changing experience was physical education which Nigel, in his day, did his best to avoid. Today it is all about ‘fostering a joy in physical education’.

What about private schools? Do these schools provide a better education? John Hattie's research indicated ‘that they offer little advantage but it is what parents believe’.

John Hattie’s advice for parents selecting a school for their children is to walk around and see if the school is an inviting one; schools that focus on students learning in a safe environment.
Point England students


What about Maori and Pacifica kids – the kids who are lagging at the tail end’? What does being in a lower decile school mean? 

Many parents equate decile rating with the quality of learning in the school. ‘Is this true?’ wondered Nigel. John Hattie, if he had his way, would do away with the deciles. ‘They are criminal if seen by the parents as a proxy for quality. They have become league tables and this is  100% wrong. Some of the best schools are low decile schools.’

A culture of high expecataions
To explore this issue Nigel went to see for himself at Point England, a decile 1a primary school.

Russell Burt
The ten deciles are based on household incomes. Russell Burt, the school principal told Nigel that Point England students  ‘generally, at the age of five, enter school with an academic age of around three’.  'The average income of a decile 1a family  is $19,000 and the school provides  breakfast for a number of students whose parents can't afford a decent breakfast.'

Nigel’s first primary lesson was maths where he observed kids working in small groups solving problems. The teacher explained that as children worked at different levels they work collaboratively, making use of computers, helping each other; ‘kids are enjoying maths – it makes maths not such a big brick wall’.
Integrated technology

Point England is a school determined not to be defined by its decile level. Technology is integrated into all activities and the school is networked with 11 other schools, which Nigel thought ‘pretty amazing’.The whole community is linked with WIFI so children can learn at home.  Children have the opportunity to acquire their own digital device – something the parents wanted for their children and they contribute $3.50 a week do so.

Nigel was reassured by the principal that computers and group work do not come at the expense of ‘real’ learning. The school works closely with its parents who are supportive and know their children’s achievement levels and progress. Achievement levels have picked up with the introduction of digital devices, technology and open space learning. Technology has enabled the students to share in a way that it is hard to do with pencil and paper. Individuals can even learn with their computers in the holidays.

Point England is a school with high expectations – expectations the students have internalised.

 As an aside Nigel saw no behavioural issues and this he felt was because of the culture of learning they have built up – the ‘students are able to manage themselves’. It’s the culture, the expectations, the teachers, not the decile rating that makes the difference.

Nigel wished he had been a student at Point England School when he was a kid.

With regard to National Standards the school struggles despite enormous success. Students who start a couple of years behind do catch up at year 6; they have made great gains but it is not reflected in the Standards. The standards, comments Latta, ‘are too narrow and don’t reflect the huge strides the children at Point England have made’ ‘There is a need to rethink the National Standards.

Point England is a school respected and visited by other educators – Google even visited to make a documentary about the school! The big thing is ‘that the kids are not limited by what others think they should achieve’.

Nigel’s last lessons were back at Pakuranga College.


There is, he said, a lot of talk about the so called ‘soft subjects’ of the NCEA. He took part in a dance class and observed year 12 students panel beating. The dance class involved Nigel in an area beyond his expertise and he found it absorbing. In the panel shop he observed students who otherwise might have left school – students who like hands- on practical things.

Dance and panel beating – essential learning for those students who are attracted to such diverse learning experiences- are both respected as areas of valuable learning.

Nigel struggles in the dance class!
The principal commented that such courses break down the barriers between vocational and academic learning. Practical learning keeps students in the school environment. In the past, the principal said such students would have dropped out.

John Hattie commented to Nigel that traditional schooling privileged a certain group of students and that in contrast  the diversity of NCEA is a way to develop entrepreneurs, musicians  and people equipped to work in the service industries. ‘There are lots of ways of being excellent’.


There is no doubt Nigel’s return to see schools in action for himself was a revelation.  ‘It is not schooling as I knew school…it is about creating citizens’; students who will be well equipped to thrive in an unknown but exciting future.

There is no crisis.


No need to worry.

Foot note.

Russell Burt from Point England was appreciative of the above but to clarify the issue over National Standards sent me this to clarify the position re standards.


'With respect to your commentary regarding Pt England and the National Standards; 


-Our gains are reflected in the standards and are very significant. Its just that what the public sees at early and often only glance of National Standards data, is position rather than progress. If we were judged more by progress than position we would be judged (and were so by ERO) as a very high performing school.


Our concern as a learning community is more about how judgements are made, than about the standards themselves'.

Saturday, August 09, 2014

Educational Readings - creativity/prodigies/ space study and Nigel Latta



By Allan Alach

I welcome suggested articles, so if you come across a gem, email it to me at allan.alach@ihug.co.nz.

This weeks homework!

Thinking about Ones Thinking

Metacognition is, put simply, thinking about ones thinking.  More precisely, it refers to the processes used to plan, monitor, and assess ones understanding and performance. Metacognition
includes a critical awareness of a) ones thinking and learning and b) oneself as a thinker and learner.
This kind of explicit instruction will help students expand or replace existing learning strategies with new and more effective ones, give students a way to talk about learning and thinking, compare strategies with their classmates and make more informed choices, and render learning less opaque to students, rather than being something that happens mysteriously or that some students getand learn and others struggle and dont learn”’

An Open Letter To My Son's Second Grade Teacher

My son is a curious kid. He's high-energy and artistic and he loves thinking deeply. He's a sensitive soul and sometimes the smallest amount of criticism can feel crushing.  I could tell you the ideal way to teach him. I'd probably tell you to avoid the stickers. Opt out of homework. Go with qualitative feedback instead of grades. Forget the Class Dojo points and the Firebird Dollars and think instead about being ethical.
http://bit.ly/1l9i8Qt

Run schools like a business? Flip that theory to see flaws

This is an 
absurd comparison, yet schools are continuously compared to a business model, which, when reversed, would be considered stupid by those in business, for there would be little if any profit, and the expectations of 100 percent success are delusional at best.

One True Path

Another great article on Curmudgucation by Peter Greene.

This is one of the fundamental articles of faith for reformsters-- there is One True Path to a good life, to happy, healthy, productive adulthood. This idea-- along with its corollary (all happy, healthy, productive adult lives look pretty much the same)-- is so patently, observably false that I resist writing about it because I feel as if I'm using a slice of the internet to argue that grass is usually green. But as long as these guys keep saying it, we have to keep pointing out that it's wrong.

Child Prodigies and the Assault on Creativity

This is a very good article, that examines how the system restricts opportunities for children, especially those with Aspergers, ADD/ADHD, and other so-called disorders.

For some time now, the education system has been geared increasingly towards controlling
children in an authoritarian environment (much research has been conducted into the comparison between schools and prisons), preparing them for a regimented series of arbitrary tests to make them suitable for a particular vocation.
This assault on genuinely creative and original modes of thinking is inevitable, given that the ruling elites of the system are characterized by psychopathy, a personality trait which is inherently incapable of creative thought.

Payment by results a 'dangerous idiocy' that makes staff tell lies
Not that neoliberals will take any notice, of course
Here's why: payment by results does not reward organisations for supporting people to achieve what they need; it rewards organisations for producing data about targets; it rewards organisations for the fictions their staff are able to invent about what they have achieved; it pays people for porkies.

What do standardized tests actually test?

Another excellent article by US educator Marian Brady, a leading voice in the US anti-GERM campaign.
Thats three very different approaches to teachingtelling, showing, and involving. The first two lend themselves to standardized testing. The third onethe only one that really worksdoesnt. It
says that what needs to be evaluated are the outcomes of personal experience, and personal experience is very likely to be too individual, too idiosyncratic, too much a product of a teachable moment exploited or created by the teacher, for its outcome to be evaluated by machine-scored standardized test items.

The Danger of Back to School:Childrens Mental Health Crises Plummet in Summer and Rise in the School Year
Another very useful article by Peter Gray - brings back memories of the torture that was my experience of Rotorua Boys High School.

School, too often, is exactly like the kind of nightmare job that I just described; and, worse, it is a job that kids are not allowed to quit.  No matter how much they might be suffering, they are forced to continue, unless they have enlightened parents who have the means, know-how, and will to get them out of it.  Including homework, the hours are often more than those that their parents put into their full-time jobs, and freedom of movement for children at school is far less than that for their parents at work.

This weeks contributions from

Habits for Success in School and Life
Bruces comment: A number of schools in NZ have implemented Art Costas Habits of Mind. The link below will refresh your appreciation of  the thinking habits.

The 16 Habits of Mind are drawn from a modern view of intelligence that casts off traditional abilities-centered theories and replaces them with a growth mindset for remaining open to continuous learning, another important habit. These habits are often called soft skills or non-cognitive skills. In fact, these skills are among the most difficult to develop because they require a great deal of consciousness. Ultimately, they become an internal compass that helps us answer the question, What is the most thought-fullthing that I can do right now?”’

How to Make Your Classroom a Thinking Space

Take a moment and imagine a creative work environment. Dont worry about the kind of work going on. Just focus on the space. Close your eyes and picture it. What is that space like? What does it sound like? How are people interacting? Is there movement? Is there evidence of work in progress? Is it tidy, or busy-messy? Can you imagine working there?
Think back to your mental image of a creative workplace. Was the place you imagined a school? If the answer was no,why not? School is a work place for 55 million people in the United States where 51.5 million student workersand 3.5 million teachers are charged with shaping the future. Thats a big job. Thats work!

6 Things for Children to Understand About Writing and 4 Ways to Help Them Get Started

We understand that if kids dont read and write over the summer, their reading and writing muscles grow slack. They lose some of their imaginative muscle. Just like a coach sees the difference in her players if they spent the summer lounging instead of being active, I certainly see a literary sluggishness in my students if they return to school in the fall without picking up a book or writing in their journals with true engagement.

Learning your way into the future - applied to a Space Study
A blog posting by Bruce.

A recent TED Talk presenter, when talking about developing innovative enterprises, said the future was about learning not education. He continued that education is what others do to you learning you do for yourself and that it is important to learn how to learn. We need, he said, to learn our way forward. And:
A visit to your local primary or secondary schools will show that teachers are still teaching as if it is they who control the learning. Current teachers reflect the way they themselves were taught or are conformed by accountability systems and pre-defined curriculums.

An article by Bruce for New Zealand readers:

Nigel Latta: The new Haves and Have Nots’ – time for Moral Leadership in New Zealand

Nigel Latta and inequality
Even the idea that education is seen as a basis for a successful life is in doubt.  Students mount up tremendous debts. University students leave with $50000 loan debts and still have trouble finding jobs. Even students of the middle class are feeling the squeeze something never experienced by their parents. Free education is a myth.

Tuesday, August 05, 2014

Nigel Latta: The new ‘Haves and Have Nots’ – time for Moral Leadership in New Zealand

Nigel Latta outside Sth Auckland loan 'sharks'.
Blog based on Nigel Latta’s documentary http://tvnz.co.nz/nigel_latta/video

As we begin to focus on the upcoming elections Nigel Latta’s TV programme is timely. It is surely time to move away from on the personalities of leaders and to focus on the real issues facing our country.

The programme was a serious attempt to get to the core of inequality in NZ and its consequences for us all.

Once NZ had one of the highest home ownership figures in the world and we didn’t see examples of extreme wealth. Latta is careful to say he is not against people doing well but he was stunned to learn that over the past decades the gap between the rich and poor in NZ has widened more than anywhere in the Western World.

He wondered why this is the case; how did it happen and what are the consequences for us all?

.The recent Quality of Life Survey has reported that 1 in 5 families do not have enough money to live on. Many families have to resort to food banks that were not necessary in the 70s. One in 3 households cannot survive more than a few weeks if they were to lose their jobs.

Yet while there are those struggling to survive there are a relatively smaller number of people
Bernard Hickey
who are now fantastically wealthy.
Bernard Hickey (Financial Adviser) makes the point that during the 2008 global financial crisis (GFC) the people who were rich got richer and now corporate executives live in luxurious style. The trouble is, says Hickey, that the widening gap presents real problems, ‘When you have very unequal societies they tend to be slow growing economies. People with wealth invest in gold, houses and land which do not generate lots of jobs.’

The richest 100 people in NZ have increased their wealth in 12 months by 7 billion – an average increase of 47 million. During the same period the real wage fell by .05 %. We have been told for decades that the money would ‘trickle down’ but, Hickey says, ‘could it be actually flowing the other way?’

Hugh Fletcher (one of New Zealand’s richest men) states bluntly ‘the trickle-down theory doesn’t work.’ ‘All the fruits of the economy has gone to the top and the average income hasn’t gone anywhere in the last 30 years. Fletcher is concerned about the inequality because of its effect on social cohesion; ‘extreme poverty does not bring about cohesion’.

Hickey continues by saying ‘when you have a lot of poor people living in poverty they do things – they upset the apple cart. He says that ‘if you continue to press down and impoverish a group of people they end up living behind barb wire walls. The last time we saw such levels of impoverishment was during the 1930s.’

Traditional advice to those struggling is to get a job, work hard and save but this it seems to Latta is no longer possible. Many poor families have two people currently working but still can’t
Growing underclass
make ends meet. Such families, the programme showed, are able to feed their children properly of give their kid’s simple treats. One job may be at the minimum wage the other cleaning jobs earning $10 an hour working all hours of the night. These families are becoming the working poor. 40% of families with children living in poverty have parents in full employment.

Latta states the obvious (but too often ignored by politicians from the right) ‘research shows strong correlation between poverty and teen pregnancy, drug abuse, suicide, imprisonment and life expectancy’. The biggest impact of inequality is the crucial consequence of the effect it will have for later generations.

Dr Garesh Nana
Dr Garesh Nana (Chief Economist BERL) pointed out that the critical factor for life success is your endowment – what you start out with in life. Some people start well ahead – others well behind and the gap widens. There is no level playing field. The wealthy are able to buy up property while the others become increasingly desperate and those who start with the greatest advantage will eventually dominate all the others. So much for the trickle-down theory!

The bottom 10% adjusted wage rises have risen 13% since 1984 while the top 10% have seen their wages rise by 78% which is 40% faster than those in the middle  who have seen their wages rise by 19%. The rich are getting richer!

Gabriel Makhlouf
Gabriel Makhlouf ( Chief Executive of NZ Treasury) tells us inequality was on the decline but through the 80s the gap has widened due to two causes: the impact of technological changes that ‘have emptied out jobs’; and the impact of globalisation – things can be made cheaper elsewhere due to lower wages.

Bernard Hickey (Financial Consultant) comments that ‘the benefit of globalisation has accrued to those at the top and the costs spread to middle and lower income groups’.’ The real victims of globalisation has been the loss of a large number of jobs- it started in factories and now is being seen in the service industries- legal services, accountancy services, medical services, education services – jobs moving into the cloud and overseas.’

But it is not just overseas, says Hickey, incomes in NZ have also been eroded. In 1989 the hourly rate was $21.83 .If this had kept pace with productivity workers’ wages would have increased by 50% but instead have only risen by 16%.

So, asks Latta, how has society become so unequal (if you haven’t worked it out by now)?

Jane Kelsey
Jane Kelsey (University of Auckland) joked that ‘the government has been snatched by the money men’. ‘The major U-turn began in the mid-80s- this is when inequality took off’. ‘Everything was liberated from the financial to the labour market. As a result we now have more conspicuous wealthy and the reality of poverty more obvious – there are now beggars on the streets’.

Dr Charles Waldegrave and others have stated a campaign for a minimum living wage – defined as enough to supply the family with the basic necessities of life. ‘Research’, he says, ‘shows that with a minimum wage you increase production, increase work happiness, decrease instability’. ‘Such a living wage should be not be compulsory – but an aspirational goal to appeal to the best in people.’ ‘This is an idea that has been picked by such companies as the Warehouse – if they can afford it why not others?’

The world of the elite rich!
The growing wealth of the few has created a demand for extravagant houses particularly in Auckland – a 270% increase in house prices while salaries for workers has risen less than 1%. This means for those not on the property ladder owning a house is a romantic dream. Bernard Hickey comments, ‘for young people in their 20/30s there has been a collapse in home ownership the last decade’. ‘Banks in the last decade have allowed people to borrow more  and more so people can pay more for houses and the demand goes up’. ‘Middle income group borrowing has been encouraged by banks’. ’Those with extra money invested in houses as you avoid paying tax – which further drives up the demand and prices’.

This, Hickey says, ‘ends up with a housing market that is worth 12 times than the stock market and a very serious debt problem’ ‘The moment interest rates rise people will get mortgage debt and be wiped out’.

The 2008 Global Financial Crisis (GFC) ‘was a warning shot across the bows. Says Jane Kelsey, ‘and there will be more and they will affect NZ more deeply than the 2008 crisis’. ‘People cannot continue with a pyramid of debt. People don’t appreciate how indebted the NZ economy is – they would be shocked. It is not public debt it is private debt.’ ‘It is the debt that makes up the gap between real wages and what families have to live on.’

Jane Kelsey’s vision has Nigel Latta worried!

Back to Makhlouf at the Treasury. What are his concerns? The issue of private debt – household debt! There is, he warns, the possibility of the ‘housing bubble bursting’. ‘The surge in our debt is because borrowing has become easier; if the banks won’t loan there are the loan sharks’. Repayment for many is too much for wages to cope with.

 Latta comments that ‘poverty leads to immediate thinking and people fall into debt trap’ – the really poor fall back on pawn shops for cash supply for immediate needs. ‘Things are seriously messed up when good people are paying impossible interest payments to loan sharks’.

Even the idea that education is seen as a basis for a successful life is in doubt Students mount up tremendous debts. University students leave with $50000 loan debts and still have trouble finding jobs. Even students of the middle class are feeling the squeeze – something never experienced by their parents. Fee education is a myth.



So what has changed asks Latta in regard to Government money for public good?

The trouble is that the government gets less tax from companies and from people on a higher income. And lots of people are fiddling their taxes. As a result the government get less tax. Dr Lisa
Dr Lisa Marriet
Marriet (Victoria University of Wellington) tells us that ‘there is a significant amount of undisclosed tax – more than 5 or 6 billion!
‘And’, she says, ‘it is not just local companies and individuals, an enormous amount of tax is avoided by international corporations – Google, Facebook and Apple pay no taxes anywhere!’

We would all be better off if everyone paid their fair share of tax.


Make them pay a fair share!
As Nigel Latta says ‘it seems crazy to me that the tax system has been changed to suit the people with lots of money while the low earning kiwis, young people and students are forced into debt’.



Over the past 25 years most of us have seen little in wage growth while we all have been faced with increased house prices and ballooning debt – which you have to repay while living from day to

day. If you can’t you are in debt trap which some people see as the biggest failing in our current economy.

With regard to wages Bernard Hickey said that ‘Henry Ford quadrupled the wages of his workers so they could afford to buy his cars!’  ‘Our economy will stall if we get to poor to pay for goods.

Nigel Latta: ‘we need some visionary thinkers in business. People prepared to make bold movers that Henry Ford himself would find impressive. Luckily we have such an individual in Derek Handley’.

Derek Handley
Derek Handley is a self-made millionaire - a successful entrepreneur. Handley has joined a group of business visionaries concerned with the role business plays in the role preventing inequality. They are determined to revolutionize the way business leaders operate – they are calling themselves ‘The B Team’. Their mission is to encourage the purpose of business away from short term to long term gains/profits so as to be a driving force for social, environmental and economic benefit.

They want to change the game because of the growing problems and issues facing us. They are asking if business is so powerful why businesses aren’t playing a pivotal role in addressing such important issues that affect us all?

It is an ambitious plan but it has the support of global heavyweights such as Sir Richard Branson. Business has the power to make the world a better place but it needs a ‘Plan B’ –one that concerns itself people, the planet and the economy. There are business leaders in NZ who want to be part of such a movement.

Handley says, ‘We are talking about a total lack of moral leadership in  business leadership’

Handley believes that ‘it would only take a 100 of the top CEOs to change the world. Such people could be the leaders pointing the way to a better future for all.

As Latta comments, ‘up until now it has been profits first – why wouldn’t business leaders change? Why would they care?

 Handley answers by saying, ‘In the long run sustainability will be big business – businesses will need to include social and environmental goals’. Such goals will not only will it make our community better but it will be profitable in the long run. Businesses can help deliver on both.

Even the Treasury is considering measuring aspects well beyond GDP - to measure quality of life. It seems we have focussed too much on financial success for a few and not enough on the quality of life for everyone. Something new we will have yet to discover but to base success on simplistic GDP is so last century and is centred on the Christchurch rebuild and the dairy industry.

We owe’ says Latta, ‘a better life for our children; a dream of a better world for our kids; for them to grow up in a country where everyone has a fair chance of a job; a decent home to live in; and able to feed their kids’. ‘We don’t want a world where we have working people living in debt with the rich living in gated communities afraid of the poor’
.
‘Addressing the issue of growing inequality’, Latta comments, ‘is a no brainer because ultimately inequality hurts us all’. ‘More and more people are getting disillusioned. New economic thinking is
Beggars in NZ!
required to face up to the reality of growing inequality’
.

Nigel Latta has timely defined the real issue of the 2014 election – and without a politician in sight!

Political leadership will now be required to go forward

(Apologies for any misinterpretations; check the video yourself – Bruce Hammonds bhammonds@clear.net.nz )


More detailed information available at http://www.union.org.nz/economicbulletin159.