The growing alarm in New Zealand over the development of a visible 'underclass' is underpinned by a wider concern in the face of the country's dramatic relative decline in the postwar period. In the generation after 1945, New Zealand was said to have 'full employment', the third highest
standard of living in the world and an enviable record in the area of free education to university level. According to a popular self-image, and a central plank of New Zealand national identity, the country was egalitarian and universally prosperous. The development of an underclass, by contrast,
seems to indicate that this former British colony at the edge of empires could not protect itself against the tide of international neo-liberalism. However, the view that an underclass has suddenly appeared does not take into account factors which always prevailed against the notion of social
equality and inclusiveness — that, for example, most married women were not in education, employment or training in New Zealand in 1950; or that the indigenous New Zealanders, Maori, only began to enter paid employment in a systematic way as they urbanized. This article concentrates
upon the shadow which New Zealand's egalitarian reputation casts upon the terrain of labour historiography. A national identity based upon the idea of egalitarianism is now the most difficult issue New Zealand labour historians face.