Return to Jobsletter Home

To the last Jobs Letter

To the next Jobs Letter

To this Letters Diary

To the Index







    Essential Information on an Essential Issue

    Letter No.2

    10 October, 1994

  • GDP UP
    If the government's main Jobs policy is to get growth back into the economy, then it can only take heart from the latest GDP figures : 6.1% growth in the year to June which is the highest annual level of economic activity since 1984, and higher than any other OECD country. The growth was across most business sectors - Construction was up 16.6%, Trade, Restaurants and Hotel industry up 8.7%, Transport, Communications and Services up 6.9%, Manufacturing up 5.8%, and Farming up 5.5%. The Dominion editorial on Oct 5 proclaimed : We're baking a bigger cake. " This is the stuff from which jobs are created and that has been happening at an average of 1100 a month - real jobs, not "disguise the unemployment figures" jobs which produce nothing and lead nowhere..."

    We may trumpet the spectacular growth in employment under our growing economy, but Brian Silverstone and Bridget Daldy of Waikato University point out there were 15 thousand people fewer in employment in March 1994 than there were employed in March 1986. Over the 8 years the size of the workforce remaining about the same, but the level of unemployment increased, markedly so in 1987 and 1990 until March 1991.

    Silverstone and Daldy found that over the past 15 years an increase in 1% economic growth only reduced unemployment by about one third of a percent. In other words, it takes a sustained growth rate of just over 3% just to prevent unemployment from rising. Brian Easton agrees. In his Listener column earlier this year, he wrote that to seriously reduce our jobless figures, we need to grow at 4%-5% per year for the next seven years.

    Source _ New Zealand Herald 27/8/94 NZ Growth Slower during June quarter, New Zealand Herald 23/8/94 Record number are in work

    Professor Peter Lloyd considers the objectives of economic policies should be recast with economic growth being the prime objective. He believes Treasury should be responsible for achieving a desired rate of growth and this should be written into the Treasury Secretary's job description. Lloyd, of the Asian Business Centre at Melbourne University, was speaking at the winter conference of the New Zealand Association of Economists. Lloyd is critical of a decade of reform in NZ which has brought the public sector and the balance of payments under control, dramatically lowering the rate of inflation, but it has not yielded sustained growth.

    Getting 2000 young people into Jobs. That's the aim of the Christchurch City Council's Jobskills employment programme, which has only been underway since May, but already has created 500 positions. Greg Jackson writes in the Christchurch Press that 80% of the Canterbury employers plan to keep the young workers on after their six-month subsidy expired. The scheme is a good example of joint initiative between the City Council and the New Zealand Employment Service, and could point the potential for further co-operation between district councils and the Service elsewhere in the country. 90% of the new jobs were in the private sector, with Local Government and community groups making up the balance.
    Source _ The Press 3 October 1994 "Employers keeping jobskills staff on" by Greg Jackson
    People registered as unemployed for more than five years has increased more than 3000 % since 1990. Employment Service figures released last month show that 6702 people have been registered as unemployed for more than five years, whereas in 1990 there were only 193.

    U-turns over the last month. Peter Gresham has changed his mind over allowing the cost of counselling for poor people to be met through the disability allowance. Limiting the use of the disability allowance was expected to save the Department between $5 and $10 million. There had been considerable pressure from community groups and the Auckland Peoples' Centre was challenging the legality of the cutbacks and a series of appeals had been lodged.

    Peter Gresham has also announced a proposed law-change to exempt mortgage and other debt insurance payments from means-tested benefits. Provisions will be back-dated to help redundant Fortex and Weddel workers.

    Social Welfare has also abandoned its attempts to gain information on beneficiaries from the patient information held by Doctors. Prediction : The legal powers to do so will be repealed.

    Job seekers looking for farm work in Northland are being warned by Federated Farmers of a "small minority" of farmers who are seeing the Employment Contracts act as a way of ripping off workers. Anecdotes : A 17-year old being told to supply his own farm bike, even though he was being paid no more than award wages of $8.50 an hour; and a farm worker having to live in a caravan with no windows. Federated Farmers is considering setting up a list of bad employers, and is to run workshops in Northland to help improve awareness of worker legal rights and employer responsibilities. Bill Guest of the Northland Federation Executive told the Dominion that the actions of these "irresponsible cowboys" is likely to turn potential assets to the industry off farming altogether.
    Source _ The Dominion 23/9/94 Farm lobby warns `cowboy' employers

    Many beneficiaries are being forced to use foodbanks for daily survival because they are repaying loans to the Social Welfare Department. Jeanette Coughlan of the Auckland City Mission told the New Zealand Herald that almost all of the foodbank clients are owing the Department for advances on their benefits or repaying special needs grants. She says these beneficiaries are forced to borrow every time they needed to move house or buy or repair a household appliance.

    Income Support says that its debtors owe an average of $1000 each, and had an average of three separate debts apiece. They were paying these debts back at an average rate of $16 a week, although official guidelines suggest $20 as a minimum weekly repayment.

    Source _ New Zealand Herald 21/9/94 Beneficiaries `forced' to use food banks

    Steve Maharey accuses the government of using unemployed people as cheap labour in areas where it should be providing money for proper wages. His target : The Community Task Force Scheme, and especially its involvement in schools. The task force scheme gives unemployed people three days work a week in exchange for the unemployed benefit and an extra $15 a week. Maharey says that figures show more than half the positions created were in schools, and about a quarter of these involved one-to-one situations with pupils. Maharey : " These jobs were demanding and should be rewarded accordingly."

    Women earn an average of 30-40% less than men for comparable work says a United Nations report from the Economic Commission for Europe, and this gap remains in place even in so-called "advanced" countries. Example : In Norway between 1980-92, women's average wage income was about half that of men.

    New Zealand doesn't do much better. Statistics NZ reports than men's weekly earnings here are growing faster than women's. Men in NZ are earning an average of $680 per week and women $498.

    Source _ New Zealand Herald 21/9/94 Job outlook bleak for women

    Violence and Unemployment. "Violent men tell us that when they stopped working they felt their lives stopped working also ... " - says Psychologist Les Gray of the Men for Non-Violence Network, speaking at the 3rd Annual Men's Leadership gathering at the Tauhara Centre, Taupo. Gray points out that losing a job can remove a lot of the structures of support that men experienced through their workplace, and turns the heat up on already fragile families or relationships.

    Source _ Les Gray, speaking at Tauhara Centre
    Violent crime, as measured by convictions, has doubled in New Zealand over the past ten years according to recent figures released by the Justice Department. Violent crime includes murder, rape, sexual violation, assaults and aggravated burglary. And while some of the reasons for more convictions are known, Mel Smith, Acting Secretary for Justice, says the reasons for the growth in serious crime have yet to be fully researched.

    Job Sharing and a reduced working week should be further investigated as an answer to unemployment. This was one of the main points Richard Randerson, the Anglican Social Responsibility Commissioner, made in his submission to the Employment Task Force. "There are reports of people in middle management and professional positions having to work 60-hrs a week while other skilled people are made redundant," he says. " A new ethos should be established in companies." His suggestion : In introducing a four-day week, people should be able to collect a fifth day's pay at the rate of the adult unemployment benefit.

    James Robertson advocates changing the taxation base from income and company tax and GST to land and energy taxes and a Universal Basic Income for all citizens. Robertson, who is Patron of the New Economics Foundation in London, considers these changes will remove obstacles to the more efficient use of the three traditional factors of production - labour, land and capital and will also help even out the regular stop-go cycles in the economy. His ideas are developed in a special booklet produced by the New Economics Foundation. Contact Katherine Peet, WEA, 87 Soleares Ave, Christchurch, 8.

    "The government is setting levels of benefits on the basis of poor information, and has done virtually no monitoring to assess the impact," says the Statistical Association, an independent group of professional statisticians, who believes that Statistics NZ should beef up its Household Economic survey to better predict the levels of benefit that should be paid. Says the report : People are just as happy to study policy or make policy based on anecdotes or particular cases rather than analysis. We are coming out of a decade where governments are used to making change with not a lot of information... "

    Bonnie Robinson of the NZ Council for Christian Social services comments : "It appears that government's 1991 benefit cuts were done without seriously considering the effect those cuts would have on the 25% of NZ children, who are supported by welfare benefits. "

    More from the Statistical Association report : While legal requirements to monitor government policies exist under the Public Finance Act, these requirements focus on monitoring how efficiently money is being spent, rather than whether the area on which the money is being spent is appropriate for solving any underlying social problem. Question : Should we be monitoring efficiency or effectiveness ?

    The job is turning into an opportunity for self-employment .... whether you like it or not ! From ex-state-owned enterprises (Telecom) to public services (MidCentral Health is the latest) redundancies are occurring as larger businesses follow the overseas trends of limiting their permanent staff to people involved in the organisations "core" services. Support and peripheral services are being contracted out. Enterprise Agencies tell us that being self-employed is not for everyone, as it brings with it a whole raft of new responsibilities and paperwork. But it is often the ex-employees who still know the job best, and are best suited to uplift these contracts.

    We all know there is more part-time work in our changing economy, but the nature of the part-time workforce has been going through profound changes over the last decade. There has been an increasing tendency for women entering the workforce to be employed in casual or part-time positions rather than full-time. There is less work and job security, and trends show that women and younger people are being paid less to work harder than before.

    Source - From a study of changes to part-time work for women in the retail, service, education and health sectors by Bray & Davidson of the NZ Institute for Social Research & Development, released in September.

    Trickle down economics doesn't appear to have made it as far as the young people of NZ. Commissioner for Children, Laurie O'Reilly, cites that the promises of the 5-year old Children's, Young Persons and their Families Act have not eventuated because of poor resources and lack of infrastructure. Lack of resourcing for many programmes for young people with social problems is pushing NZ towards becoming a socially toxic environment. " I am beginning to fear that at this time, the children of this country may be adversely effected by the policies being pursued ... "
    Source _ New Zealand Herald 29 September 1994 "NZ not safge for children: O'Reilly"
    The rise in international interest rates since June will cost New Zealanders an added $200 million, said Bill Birch in London on his way to the IMF/World Bank 50th birthday bash in Madrid. Birch told international bankers that the government's revenue from NZ's apparent 6% growth would mean NZ would be able to meet its rising debt servicing costs. He assured them that rising interest rates would keep the NZ economy from growing too quickly, and that economic targets were being met even in the face of pending MMP elections.
    Source _ The Daily News 3 October 1994 "Leading Industrial nations say global recession over" by Anthony Williams
    In Madrid, hundreds of economists, ecologists and sociologists are gathering at an anti-World Bank and IMF meeting called The Other Voices of the Planet. The wide gathering of critics - from abolitionists to reformers - are calling for debt write-offs for the poorest countries, an end to environmentally destructive lending, positive reform programmes, and more accountability and transparency on the part of the World Bank and the IMF. The critics say that loan conditions can destabilise governments, and widen the gap between rich and poor.
    Source _ The Dominion 28 September 1994 "Other voices to air IMF criticism in rival meeting"

    "Free trade is a means not an end. The end is rising living standards worldwide, more jobs and better jobs "
    -- Robert Reich, U S Secretary of Labour speaking to the ILO Conference in Geneva

    "There are only two true or ultimate objectives of economic policy - growth of real output and expenditures and the distribution of these expenditures among households."
    -- Professor Peter Lloyd, speaking to the NZ Association of Economists

    " I am surprised when I hear people metaphorically pat themselves on the back when they say they are better than others because they put people before the dollar. Who is really putting people before the dollar ? Last year economic growth added 58,000 extra jobs in NZ. To my mind that is a pretty big benefit to those people.... "
    -- Wyatt Creech, Minister of Employment

    " A furry feeling in the old tummy ..."
    -- Weddel worker Tony Verhoeven, as he left his Cambridge plant for the final time after 11 years.

    "Cabinet has never emotionally or psychologically understood what it is to be in the position of a beneficiary. It's a situation born of lack of understanding, rather than a desire to kneecap the poor. Cabinet does not understand."
    -- Michael Laws

    To the Top
    Top of Page
    This Letter's Main Page
    Stats | Subscribe | Index
    The Jobs Letter Home Page | The Website Home Page
    The Jobs Research Trust
    -- a not-for-profit Charitable Trust
    constituted in 1994
    We publish The Jobs Letter