It strikes me that we have learned a great deal over these years. First that well-working labour markets and stable economic growth matter a lot and yield large employment benefits.

Second, that policy and its implementation does matter. Changes to labour market rules, the age and entitlement to national superannuation, and the concerted performance targets of WINZ and its predecessors in getting people into work have all contributed to these gains.

Third, we have learned that long-term detachment from the labour market has significant, long-term costs. Studies have shown larger lasting income losses for those out of work the longest. Even now, Pacific and Maori participation rates have not returned to earlier levels as detachment was most severe for these and other lower skilled groups.

Fourth, we have learned that getting people off-benefit does not equate with getting them into work and sustaining their attachment and progress in the labour market (e.g. see LEED research reports). We still have some work to determine the appropriate responsibilities of our public institutions in this regard and how best to assist successful work transitions.

Fifth, we’ve learned that employment growth, by raising the real and relative incomes of low-income people, has the potential to improve equity in the distribution of income, at least in the lower half of the income distribution (see Treasury working paper on the earnings distribution and Motu analysis of the Maori income distribution).

Lastly, I observe that we have gained new understanding of how dynamic the labour market is. The LEED data offer dramatic new insights here. For every new job created in a quarter, perhaps five to ten times as many are starting and a similar number are finishing. High job turnover means that there are many opportunities for job seekers to enter the labour market, but we have also learned that tenure is often very short.

We have learned a great deal over the 12 years. We have learned more about the full social costs of radical economic reform. We have learned more about the strengths and weaknesses of a market economy. We have learned more about our society’s willingness to accept ethnic and sexual diversity. We have learned more about the strengths and weaknesses of central and local government policies for improving social, economic, environmental and cultural well-being.

Most of all, we have learned that even in a period of rising economic prosperity, serious problems of poverty (in its widest sense) remain. In particular, New Zealand continues to have shocking issues with child and youth poverty. Social Report 2006 records that 38% of dependent children under 18 years had low living standards in 2004, an increase from 34% in 2000. It also records that New Zealand has the third highest male youth suicide rate and the highest female youth suicide rate in the world. We are one of the few countries where the suicide rate is higher at younger ages than at older ages.

Punitive approaches like benefit cuts and work-for-the-dole are doomed to fail. They don’t lead to real jobs, and they use up case managers time in administration.

Only a strong economy and targeted, specialised services deliver sustained employment growth. Services must match people’s skills and circumstances, and acknowledge that some have greater barriers to work than others.

The more we reduce unemployment benefit numbers, the more time and resources we can focus on supporting other groups, like people with ill health or a disability or the long-term unemployed.

Results like benefit numbers are easy to measure and quick to see. Others, like sustained improvements in education or living standards, take a longer time. We need to measure immediate and long-term progress to get a genuine sense of what’s working.

Work-for-the-dole schemes don’t work, and a strong vibrant economy is a better road to creating jobs than forcing people to work for subsistence wages.

Under the current government’s approach, part of the price for higher employment rates appears to be very low wages and poor conditions of employment for many workers.

A local government/government partnership (Mayors Taskforce for Jobs) working together to help end youth unemployment can begin to effect real change for the better.

Both National and Labour-led Governments are happy to entrench structural discrimination against beneficiaries and their children and to continue with an income support regime which is usually not enough for people to live on, impossibly complex and expensive in its administration, and often unfair in its application.

There is a lot more that needs to be done by all of us who care — across all sectors — to end unemployment and poverty in this country.

I have learned that when we go through significant restructuring we should think long term and not just short term. When we restructured in the 1980s and 1990s we left a group within our community in NZ without engagement, or hope, and we then did not train people for where our economy was heading. We did not train trades people. We relied on the ‘market’ to meet future needs. The partnership between public and private was non-existent. The concept of ‘non market intervention’ was a mantra chanted by the high priests of the market.

A modern economy needs an active engagement by both public and private sectors. Our forebears understood this and they set up a good mix of training which was not just at universities.

We have to make sure that careers advisors understand where jobs are, and what skills are needed. This will lead to our young people being exposed to many potential opportunities for their lives.

We have a lot of lost time to make up if our economy is to have the skilled workforce which will be necessary to meet the demands of new world markets for our goods and services. Let us never repeat the awful mistakes we made during the past two decades with our dreadful ‘hands off’ approach.

We are a resilient country that has been rocked by globalisation, oil prices and even the weather in recent times, but we have met these challenges and continue to grow.

Today, beneficiaries are being blamed once more for their ‘dependency’ and their children are denied access to the entitlements provided for children or parents in paid work. Hard won recognition of the Tiriti o Waitangi are being expunged from law and policy as Maori are targeted once again through familiar practices of institutional and personal racism. The hospitals are culling waiting lists to meet their budgets. Schools in poor areas struggle with kids who are hungry and whose parents can’t pay the ‘voluntary’ fees. Talk of tax cuts no longer draws howls of outrage about the richer getting richer or what will have to be cut to pay for them.

No-one talks about these things any more. What has changed? Poverty, inequality, exploitive employment, deteriorating public services and user charges for the poor have become normalised. Successive governments that have claimed to represent working people have been more concerned about threats of capital flight and a crisis of investor confidence. Even compliance with New Zealand’s international obligations on paid parental leave only occurred through pressure from the Alliance Party, which was deliberately killed off at the 2001 election.

Peter McCardle, Former Minister of Employment

I doubt that New Zealand has learned the most important economic facts that are clear from the experience of the last 20 years: that the single most important key to reducing unemployment and hardship is strong and sustained real economic growth of over 3% per annum. Policy must therefore put this goal at the top of its considerations. While the economic growth of recent times (on the back of the reforms of a decade or more ago) has been hugely positive, it is now falling away to a lower level, and there is a real risk New Zealand’s living standards and job growth will fall further behind comparable countries such as Australia that already have much higher standards of living.

We have learned that the ‘divide and conquer’ strategy still works, Fritz Schumacher was right, the monetary status quo where interest-bearing-debt-operating-for-profit-only has sucked us all in and is unsustainable, consumerism is unsustainable, competition needs to give way to co-operation, most institutions in our western society need to be reformed into more sustainable social relationships, we must protect our environment, another world is possible, the trickle down system has not worked, divisional barriers need to be abolished and that we are one species that needs to work together.

It is more what we are about to learn … which is attacking poverty with a work-incentive tied to children is a clumsy and ineffective approach. It punishes those children whose parents lose their jobs in a recession and by being so expensive — diminishes the political will to increase disposable income of those who can’t work.

In terms of learning, we have learned nothing from the failures of the family income support measures of the 1990s including the introduction of the highly divisive and discriminatory Child Tax Credit in 1996. The In Work Payment of 2006 perpetrates the inequity.

We have learned nothing from the benefit cuts of 1991 as they have been mirrored in 2005 with core benefit reductions and changes to hardship provisions.

We have learned little from the failure to index family support with indexation applying to cumulative inflation over 5% only from 2007.

We have taught women that the only value they have is if they are in the workforce. What we will learn from this is that when women also undervalue their care-giving role, society is immeasurably worse off.

The market does not (nor should it be expected to) provide services and opportunities that are neither commercial nor profitable.

Developing and maintaining a fair, just and equitable society requires visionary public and community intervention and investment.

Contracts for services in the not-for-profit sector is a poor substitute for developing partnership approaches between the public, private and community sectors to address gaps.

A long-term commitment to investing in research and development work in the community sector is a pre-requisite for building more robust and sustainable economies.

We should have learned by now that ‘trickle down’ does not work. Tax cuts for the rich, higher profits, privatisation of state assets and so on did not trickle down benefits to all. If anything they trickled up and then flooded out of the country.

We should have learned that there is nothing wrong with strong regulations that can ensure redistribution of income through the tax system and the labour market.

We have learned that in the right circumstances, minimum wages can rise sharply without leading to high unemployment.

Also we know that if employability relies on having a transferable skill, then we need investment in skills. Knowledge may be an infinite resource — but it needs to be nurtured.

We have learned that it is very hard to come back later and address the major social deficits that develop when right-wing economic policies reign supreme for over a decade.

Hopefully we have learned that a sustainable development framework is a better approach.

Peter Hughes, Chief Executive of the Ministry of Social Development

The Ministry’s living standards research highlighted the difficulties faced by a small proportion of families reliant on the benefit and supporting dependent children. Working for Families focuses on families with children and will make a significant contribution to addressing this issue.

Alister Barry, Documentary maker

We have learned that if a consensus on the use of unemployment as the basic mechanism for controlling inflation can be achieved amongst the two political parties, the business elite, the business media and most general media commentators, then permanent levels of unemployment (and poverty) around the level of the NAIRU (Non Accelerating Inflation Rate of Unemployment) will be tolerated by the general population.

Russel Norman, Green Party Co-Leader and Spokesperson on Economics and Trade

We have learned that cutting the wages of the lowest paid has negative economic outcomes as well as negative social outcomes. The productivity drop after the introduction of the Employment Contracts Act in 1991 should have surprised no one but is a sobering lesson. If we want to have a high wage economy then we need to have high productivity and you don’t get there by cutting wages. Extreme inequality is a major contributor to ill health and a raft of other negative social indicators. Inequality matters in and of itself. Social policy that remains focussed on getting people into low-wage jobs and is blind to the gap between the rich and the rest will fail to address inequality and all that goes with it.

Retaining of power and control generally drives political leaders and their bureaucracies, at both national and local levels, resulting in a reluctance to work in true partnership with citizens. Consequently local initiatives lack of support and encouragement and don’t tap the potential that exists within its citizens, limiting what can be achieved.

There’s growing evidence across all sections of society, of increasing anti-social attitudes and values ranging from things like selfishness, greed, lack of accountability, lawlessness, violence and abuse, lack of concern or consideration of others and so on, which also impinges on results. The need is for holistic rather than the pepper-pot approach for attempting to solve the symptoms of social problems or ills when the public demand for action means they can longer be ignored by authorities.

Such negative trends feature, in varying degrees, in all developed nations, indicating there’s a common denominator in this socialising failure of young over the last century or so.

I’m not sure that we have learned anything or we have we done anything to change or improve what we know. We have learned that we have a critical shortage of skilled workers and we are now addressing that with a number of initiatives.

We know that varsity graduates are leaving the country in order to pay off their huge debts because they are being offered better wages overseas ... and we are not really doing anything about that.

We have learned that wages are far better in Australia than here and we are advised by Michael Cullen not to ask for wage increases ... so we are not doing anything about that.

In a nutshell we have learned many things but are not doing anything about them.

Sadly, in respect of poverty we have learned nothing. The policies that brought so much hardship to so many in the 1990s have not been abandoned, and in the case of the In Work Payment, they have been made harsher. While CPAG endorses the principle that decent, well-paid work should be available to all who want it, we believe there must be official acknowledgement that the needs of children do not change according to the work status of their parents. And this acknowledgment should be accompanied by policies.

Nor have we relearned the value of well-paid, secure work. Communities devastated by the reforms of the 1980s are now struggling as parents work two or more jobs to stay afloat. A liveable minimum wage would seem an obvious lesson that has eluded us.

It is now acknowledged that the Employment Contract Act era of the 1990s encouraged employers to focus on reducing labour costs rather than investing in skill development and technology. The result is that our wages here are low enough to drive skilled workers offshore, particularly to Australia. The neo-liberal economic and welfare policies of the 1980s and 1990s created and worsened the conditions that result in the significant hardship faced by many low-income workers and beneficiaries.

More recently though, we have learned that if we involve workers in decision making on matters on the job that effect them, it can have positive results. A good example is the increased worker participation introduced by the 2002 health and safety reforms that are helping to bring down our still too high rates of workplace fatalities.

We have also learned that regular, albeit modest, increases in the minimum wage over the last six years has not seen large numbers of people being put out of work, instead it has coincided with the lowest unemployment in 20 years.

Dr Anne Else, Freelance writer; Research Associate, Gender and Women’s Studies, Victoria University

The drive to raise the minimum wage, like paid parental leave, indicates we’ve started to learn that what matters is not just jobs, but sustainable work — and that has to include unpaid work. When I wrote False Economy in 1996, there was little notion of how important this was. Talk of ‘work-life balance’ is commonplace now, even if real change is not. (At a recent seminar, I heard Treasury officials solemnly citing research to prove that having young children impacts on women’s paid work ‘commitment’. Well, yes.)

Darel Hall, Executive Director of the Industry Training Federation

We’ve re-learned that high-employment is good for poverty reduction — that high employment per se is a good goal. And we’re becoming better at constructing jobs within a career context so people feel an entry level job actually goes somewhere rather than just being a poorly paid job — that a brighter future for me is possible.

Ian Ritchie, Manawatu What have ‘we’ learned? That summarising the information in main stream print media is not likely to change anything, merely confirm the dominant, laisse-faire right wing agenda that poverty — even in work is good, and that low-wage employment is totally acceptable.

What we have learned is that good governance is one of the most vital ingredients to the survival of an organisation and the effectiveness of the programmes it delivers.

Robust evaluation is vital so that programmes can prove positive outcomes and improve delivery.

Funding streams are too often short term and there is a tendency from funders to throw money at good ideas that are not sustainable.

Organisations too often get obsessed with the process rather than outcomes and the end game.

There is insufficient emphasis on benchmarking for quality.

There is too much competition between organisations and not enough collaboration.

There is not enough collaboration between government ministries.

Gordon Hudson, Manager of Like Minds Taranaki There has been little long-term planning for sustained full-time employment — particularly in employment legislation and in tertiary training. Much of the current changes in employers’ attitudes to ensuring more flexible working conditions and retaining and retraining experienced staff is at best ad hoc. Better that than nothing happening.

Partnerships between business, economic development agencies, local government and central government are bringing good results both at national, regional and local level. Work & Income Regional Commissioners being given more autonomy and flexibility has enabled innovation and creativity in employment creation areas in partnership with Councils, the community and other key stakeholders. Regional labour market strategic plans also provide for a clear way forward. Key Department of Labour staff working with Ministry of Social Development staff at regional office level is a great step forward in breaking down central government silo thinking. I would like to see Tertiary Education Commission also working closer together with these two key government departments and members of the Mayors Taskforce for Jobs and their Councils. Now we have done the planning, let’s all work together to implement them and achieve full employment.

These 12 years have been hugely valuable as the population, in spite of much of the leadership, has re-established a consensus in favour of public services and other forms of social support and community building: essentially, a re-legitimisation of democratic government. It is now more legitimate to try to control socially and environmentally destructive activities and to plan and introduce desirable social and environmental policy. As well, some of the consumerist frenzy that followed deregulation seems to have eased.

Paul Callister, Institute of Policy Studies, Victoria University

We have learned about the challenges faced by New Zealand in a time of high unemployment. But we have also learned that there are challenges when there is low unemployment. We have to make sure that we don’t lose this knowledge.

What have we learned? It will be hard to tell until, and if, the economy eases to levels similar to what it was 12 years ago. Only then will we know if robust, effective and sustainable changes have been made to the economic and social fundamentals, or whether our former unemployment, poverty and deprivation will return, perhaps at worse levels.

We think we have learned that it is best to help communities find their own sustainable futures through processes that focus on their assets and cross sector commitment to agreed actions and desired outcomes. This is not easy especially in deprived and ‘over serviced’ communities, but it promises to provide more resilient, caring, and self determining futures than those primarily dependent on outside resources and programmes.

We have learned how to encourage people to work and we have learned to appreciate the skills of our workforce. Visiting the United States and Europe in late 90s clearly illustrated the likelihood of this to me. New Zealand needs to learn now from the experiences of other countries with a workforce that is accelerating in its ageing and its ethnic diversity.

We’ve learned that New Zealand needs to be vigilant about the promotion and protection of employment rights, whether it be accessing the labour market, moving within it or exiting paid employment.

Despite high levels of employment, disabled people for example, find it very difficult to access decent work.

Despite the increased female labour force participation, the gender pay gap is still structurally embedded and may even be widening.

Despite years of workplace policies, media exposure and societal debate, sexual harassment and bullying are too prevalent.

We have learned that we cannot take equal employment opportunities for granted.

Margaret Crozier, Senior Analyst, Department of Labour

We’ve learned how important the passion and commitment is of people who push for more collaboration and better strategies, who articulate social objectives and build a community vision.

Lindsay Mitchell, Institute for Liberal Values NZ

Carrots alone are not effective. This is evidenced by the large drop in numbers drawing the unemployment benefit by people who want to work, and, given an alternative, others will not. The economy of itself will not solve our dependency-driven poverty problem. Lessons from the United States welfare reforms should be heeded. They have 60% fewer people on welfare since passing the 1996 Personal Responsibility and Work Opportunity Reconciliation Bill, which time-limited welfare. Different measures of poverty show varying results — some up, some down. But the main consideration should be the gain for the next generation, many more of whom are now growing up in working homes.

Parekura Horomia, Minister of Maori Affairs; Associate Minister for Social Development

We have learned that with an increase in work and education, people’s lives change. If it’s a parent, it positively affects their whole whanau. Even with employment and education at high levels, there will always be more to do. We have also learned that to support every member of society, it takes ownership from each and every one of us.

We have learned that anti-poverty measures are complicated and need collaborative multi-faceted approaches across sectors. However, political commitment to these understandings is weak and where trialled, have been piecemeal and short-term and under resourced.

To address unemployment requires the active participation of the government, private and community sectors. Unemployment cannot be solved by any one sector working alone and cannot be left to market forces.

To achieve positive employment outcomes there is a necessity to encourage economic development in the provincial regions, not only the main urban centres.

Strong regional growth in employment comes from incremental improvement in predominantly locally owned businesses rather than a series of one off big projects.

Dependency on benefits not only disempowers individuals but is also detrimental to their health and well being. The encouragement of the ‘benefit culture’ in the mid to late 80s has seen generational benefit dependency resulting in a lack of role models for teenage young people. It has taken years to roll back this dependency and perception by many ‘working people’ that anyone who has been long-term unemployed does not want work and is not worth employing.

Many of our young people do not have the basic work habits which were almost instinctive 30 years ago. Moreover, many have related issues such as alcohol and drug abuse, family violence and related mental illness that need to be addressed before they are ready to undertake training or employment.

Collaboration rather than competition achieves far more for communities.

Sharing of information and resources enable communities to feel empowered and assist with their development.

Our economy is increasingly susceptible to world events and the waxing/waning of major economies like United States and China. This in turn reflects on our competitiveness in the export market and the opportunities for growth in employment.

Full-employment is no longer achievable. However a vision that people of all ages have the opportunity and are encouraged to be in paid work, in training or education or in productive community activities is one which should be achievable.

Yvonne Sharp, Mayor of the Far North District Council

I believe that our successes and the still-prevailing challenges portray the key lessons. The former is manifest when all government agencies including local authorities work collaboratively and closely with communities to achieve sustainable economic development. This requires an ongoing commitment to identify and harness opportunities in tune with available resources, plus ensuring that appropriate upskilling is focused on those most in need. The challenges include the continuing high incidence of youth featuring in our unemployment statistics. Many of these same youth are at-risk with poor role modelling from both their immediate peers and their unemployed parents or caregivers.

We have learned that economic growth alone will not provide the quality outcomes we want for all our people. There is now more recognition that we need to start with the local and take local ownership and leadership and devise local solutions. We also know that these local solutions need to be well resourced and given time — a long-term view is needed for real change to occur. Whilst projects and programmes can bring people together and galvanise enthusiasm and action, it is the long-term vision and quality leadership which will drive us to a sustainable future.

Taking a long-term view will ensure we do have the required skills in our workplaces of the future and that groups such as the young who provide us with enthusiasm, energy and vitality will be assured of their value and seen as an investment; and that the older workforce provides us with knowledge, experience and wisdom which we also need to value. We have learned that our vision for the future must encourage diversity, courage and eccentricity! When central government policy is informed by local information and perspectives the best policy is made.

We have learned that while controversial and not always successful, risk taking is imperative if we are to find solutions which will last over time and be adaptable to change. We have also learned that even with our current low-unemployment the gap between rich and poor is increasing and needs to be addressed to ensure equity in our society.

The official rate of unemployment is now 3.6%, which under estimates the change, since there has also been a reduction of those not-in-the-labour force. Why has this happened?

The first reason is that the economy has expanded, creating some 660,000 jobs, or around 45% more than 15 years ago. The second reason is that in the early 1990s the government introduced a more active labour market programme, although many saw this as the stick of forcing people to look for work, to go with the carrot of pay and training.

We cannot rely on either trend in the future. First, past economic growth has involved low productivity growth and the taking aboard of additional labour. The labour reserves are running out — New Zealand now has high labour force participation by OECD standards, and it appears that the annual hours worked by New Zealanders are among the highest in the OECD (although the data may not be internationally comparable). Future economic growth is going to have to be from greater productivity growth, which means higher skills, more capital, changing workplace practices, and the abandoning low-productivity jobs for high-productivity ones. Labour market programmes need to be more pervasive.

A second difficulty occurs from the anti-inflation regime. The Reserve Bank has shown it has no ‘target rate’ of unemployment, below which it will try to reduce demand in contrast to the 1990s when a 5% rate seemed to be the target. But can unemployment get so low that the Bank will take action? In fact, the labour market inflationary pressures are not likely to come through a shortage of unskilled labour, which low unemployment indicates, but by a shortage of key skilled labour who push up their wages as employers compete for them. If other workers follow the wage rises then the labour market adds to other rising costs. Higher unemployment among the unskilled is just collateral damage – but very damaging to those concerned.

Moreover, we cannot rule out that there will be an economic downturn which will slow down economic and jobs growth. Hopefully it will not be a self-induced one as occurred in the 1987-1993 period and, if it is an internationally induced one, it will be short and not too deep — more like the Asian crisis of the late 1990s rather than that of the Great Depression.

So macroeconomic concerns won’t go away, Even if they did there will still be ‘frictional unemployment’ — workers moving from low-productivity to high-productivity jobs passing through a transitional (and hopefully brief) period of unemployment. But there is likely to remain a core of those who will not easily return to employment. Some will have various limitations, others have got so embedded into the culture of welfare through a long — and often inter-generational — period of unemployment, that it will be difficult to shift them into employment.

Jim Anderton, Progressive Party Leader; Government Minister

Judging from the results of the last election, New Zealanders want to stick with the Labour-Progressive coalition government because we get things done. People often forget how bad it was when National was last in government — how they froze the minimum wage for two years in a row so that the gap between those who were on benefits and those who were on low wages closed. This Labour-Progressive government has increased the Minimum Wage every single year we’ve been in government so that there is merit in getting a job and improving your financial position.

Have we even started to comprehend work possibilities beyond that which has been with us since Henry Ford production lines? Any change of this nature takes a generation. Many of the issues championed by The Jobs Letter have not been picked up or even considered by those developing public policy.

We have learned that the power players in the world of work are comfortable and won’t change easily. I sat at the recent Flexible Work Summit reflecting on this as the industry partners squared off and celebrated making minor adjustments at the fringes.

We have also learned that the great tall poppy machine is alive in well in this land which has created the biggest growth industry in NZ — the risk management mantra that has taken the public service by storm and now moving to the community sector (e.g.the ‘Hip Hop’ fallout).

Wally Stone, Kaikoura

What have we learned? Unfortunately, not a lot.

TOP