Wednesday, February 15, 2012

What can the junk food industry tell us about the economy that Bill English won't?

Four years after the global economy hit the skids, New Zealand's economy continues to limp along losing jobs, being hammered by high exchange rates and falling demand in many of its key export markets. Yet according to our Minister of Finance (and the Prime Minister and his Minister for Social Development for that matter), there's nothing wrong, and if there is it's certainly nothing a bit of austerity won't fix. Bill does tend to flip flop according to his audience and which way the wind is blowing: the economy is doing well sometimes, but terrible budget constraints are forcing the government to flog off publicly-owned assets other times. But generally - aided and abetted by bank economists who have managed to call it wrong since the start of the GFC - the government is presenting a largely unquestioning public with a cheery picture (all quotes from official government propaganda machine):
  • the economy posted solid economic growth in the September quarter
  • we're building a more competitive economy based on exports and new jobs
  • we are in a good position compared to many other nations
  • the fall in unemployment to 6.3% is evidence the economy is heading in the right direction. 
With foodbanks and budgeting agencies continuing to report record demand for their services, it is reasonable to ask who, exactly, is heading in the right direction?
The evidence from the real world suggests it's not low-income people. $2 shops are predicated on the idea that even very poor people will have a few coins kicking around in their pockets, and if they want to treat themselves or the kids then the $2 shop can provide them with a cheap novelty or personal item. Major junk food outlets are also very sensitive to the health of their customers' wallets, and places like McDonalds and Wendys have been offering cheaper crud for some time. But what caught our eye was a Burger King ad which suggests that the major junk food chains have noticed that their actual customers (not the white middle class ones which feature in their ads) have even less money clanking around in their pockets than they did a couple of years ago. The BK ad is for some rubbish called Shots, and you can get two for a mere $2.90. $5 is now out of reach, but like the $2 shops, BK figure hungry people at least have a couple of coins in their pockets. This photo was taken at a bus stop, because you'd flog your cheapest deal to public transport losers.

Then we noticed this from McDonalds. Again, this suggests that whatever the Great Propaganda Machine is telling us about creating jobs, the reality for many people is that a $2 hamburger from McDonalds is about their financial limit. 

And it seems the junk food industry is not the only one that recognises the financial constraints many of its customers are facing. Here's something called a Big liq (I think that's what the label reads) purchased from one of our many local liquor outlets. It's photographed next to a cotton reel to get a sizing, it's 20% alcohol by volume, and you can purchase this nasty for a mere $2. Don't keep this stuff in the cellar to auction at Christies in 100 years time - it has a 'best by' date.

The first decade of the century was characterised by a two-speed economy as those who could take advantage of the global flow of cheap credit did so, and those that couldn't slipped further behind. The Great Grinding recession has heightened that divide, and forced more people onto benefits and into precarious employment (yep, I read the Household Labour Force Survey). In complete denial of the reality for thousands of New Zealanders, the government has embarked on another round of cuts to social services and seems intent on creating an economy for the benefit of the predatory 1%. Still, it's nice to see someone thinks they can still make a buck. Or two.