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    Essential Information on an Essential Issue

    Letter No.5

    21 November, 1994

    Official unemployment figures have dropped to 7.8% or 132,000 people out of work, ... the lowest these figures have been since June 1990. We include our special insert on the jobs figures with this issue of The Jobs Letter.

  • The Markets and the Jobs Figures. Why are the financial markets reacting to the jobs figures by putting up wholesale interest rates ? Westpac economists say that their concern about the job figures centres on the impact on wages. The latest growth in jobs will increase the skills shortage and therefore put the pressure on wages to rise. Westpac's weekly market commentary says that inflationary dangers do not come from more jobs, but from more expenditure.

    Five hundred former Tomoana freezing workers have found jobs since the meat works closed in mid-August. Tomoana Resource Centre Manager George Rarere says that the centre has found jobs for 336 former workers while the Employment Service has found work for nearly 200. He says that the partnership between his centre, the Employment Service, and Income Support has been vital to securing the full-time and part-time jobs. Hastings Mayor Jeremy Dwyer concedes that much of the work is of a short-term nature, but he feels that it indicates that Hawkes Bay and Hastings will bounce back more quickly from the Tomoana closures, than it did from the closure of the Whakatu works. About 90 of the workers had found jobs in the meat industry, and some of the salaried staff have started their own businesses. About 170 former Tomoana workers have also become involved in retraining courses and seminars.
    Source _The Dominion 15/11/94 Tomoanasl workers enjoy job successes, The Dominion, 15/11/94, The Daily News, 14/11/94 Freezing workers find jobs

    In the last issue of The Jobs Letter we reported that the forestry sector was booming with 2900 new jobs being created in the last year. The Forestry Corp's decision to lay off 97 staff at processing plants at Waipa, near Rotorua, and Mt Maunganui has led to criticisms that this industry is in need of better long-term planning. Only two years ago, the plant at Waipa was launched by Jim Bolger, promising the creation of 265 jobs and profits of $100 million a year. Last week, Forestry Corp blamed significant losses from the processing operations for the layoffs. Jim Jones of the Wood Industries Union told the Dominion that the government was not heeding calls for an industry council to be set up to draw up a long-term plan. He says that such a plan would bring greater benefits for NZ, and better job security for workers, than the present system in which individual companies react to short-term prices.
    Source _ The Dominion 17/11/94 Axing of forestry jobs attacked by Anamika Vasil, New Zealand Herald 16/11/94 Mill jobs to be axed by John Manukia The Dominion 16/11/94 100 Forestry Corp jobs to go

    Something sound familiar about free-marketeer and IHC President Dr Rod Deane's blast at the health bureaucracies under the revamped health system ? Many community employment groups think so. Several managers of local employment and enterprise agencies have told The Jobs Letter that their experience of dealing with government contracts has been similar to that of the IHC. Their call : We need a greater public evaluation and discussion of the contract process, obligations and statistics gathering required by the Education and Training Support Agency and the Community Employment Group.

    Dr Deane's comments were specifically aimed at the complexity of dealing with the new regional health authority bureaucracies. His legal advisers have told him that the contract arrangements are hopelessly time-consuming, and a recipe for frustrations, uncertainties and unfairness. Under the 39-page contract the IHC has with Midland Health, the health authority could not be publicly criticised, was immune from liability, could alter the contract on eight weeks notice, could cancel the agreement but require services to continue for six months, could insist on complex reports and statistics and compliance with statutory requirements regardless of their applicability. Deane : " I simply do not believe that all the effort which has gone into the health reforms was intended to produce this sort of bizarre outcome..."

    Source _ The Dominion 9/11/94 IHC chief hits out at `bizarre' bureacracy, New Zealand Herald 9/11/94 Free-marleteer donounces health contract by Andrew Stone

    The Alliance has announced its non-negotiable policies which will set out its terms for a coalition agreement in a future MMP government. The policies, announced at last weekend's regional conference in Auckland, include : Changing the Reserve Bank Act to include a goal of sustainable economic wellbeing and full employment in setting monetary policy; A progressive tax system that includes taxing resource use and financial transactions; Reversing the 1991 social welfare benefit cuts; Full funding of public health and education and an end to means testing; and prohibiting the sale of rural land to foreigners.

    Their bottom line in active measures to achieve full employment include : government and private sector investment to rebuild our social and economic infrastructure, and to repair our damaged environment; regional development, planned locally and carried through with assistance from a government-established economic development fund; Reserve Bank low interest loans for approved local body initiatives to achieve wise resource management.

    Source _ New Zealand Herald 14/11/94, Alliance sets out rigid terms for deal on coalition by Audrey Young, The Press 14/11/94 Alliance takes hard line on coalition bargaining policies

    A Wellington public relations firm Martin Jenkins de Lore has given media training to members of the Prime Ministerial Task Force on Employment, including advice that the forthcoming issues policy release " must include rehearsals of likely questions and answers both positive and negative ...". We shall see the results soon ... the report is due for release before the end of this month.
    Source _ New Zealand Herald 8/11/94 Task force got advice

    Christchurch City Missioner Canon David Morrell has been touring voluntary social services in the UK and the US while on a Churchill Fellowship. He has returned adamant that social service agencies in NZ must adopt a strong, professional and pro-active advocacy role to highlight the plight of the needy. He told Sarona Iosefa of the Christchurch Press that more creative thinking in government was needed to successfully tackle unemployment and the growing "underclass'. The area most needed for creative thinking was where politicians assumed that the 40-hr work week is normal and part-time work is abnormal. Because the welfare system is based on that assumption, those finding part-time and casual work were being penalised. "As soon as they start earning, we take it off them, " says Morrell. The result is that people earn as little as possible to avoid losing the benefit, or they accept money under the table.

    Two creative suggestions Morrell reports from his travels : (1) that beneficiaries could work and keep all the money while still receiving the full dole for a year, but they would come off the benefit at the end of that year. This would provide an incentive for them to set themselves up for permanent work, or in a business. (2) that a compulsory savings system be introduced where any money earned above the dole would be saved and handed to workers at the end of the year to help them get off the dole or into further training.

    Source _ The Press 15/11/94 Working with the poor: need for advocacy, creative ideas by Sarona Iosefa

    If a beneficiary's expenses are judged to be more than their income, they may qualify for a special benefit. Up until now, the income/expenses gap had to be at least $20, but Maurice Williamson announced last week that, from 1st April 95, the gap need only be $10 a week. People on special hardship benefits will also have their cases reviewed every three months.

    Credit should be a human right. That's the view of Mohammed Yunus, the founder of the Grameen Bank in Bangladesh which began 18 years ago and now has nearly 2 million borrowers, 94% women. Few with any collateral. The bank is expected to disburse nearly half a billion $US in loans this year, the average of which will be about $100 US each, at 20%. Yunus : "If we are looking for one single action which will enable the poor to overcome their poverty, I would go for credit. Money is power." Grameen introduced housing loans in 1984. The average loan is $300 US, at 8%. Nearly 300,000 have been issued so far. Repayments are by weekly instalments over a period of 10 years, and repayment performance is nearly 99%. "The less you have, the higher the priority you get," is the principle the Bank follows.

    Can the capitalist system meet social goals? Yunus : "My answer is an emphatic `yes'. Instead of having personal greed as the only motivating force we can also have social dreams as another motivating force. In a capitalist framework we have always ignored the role of another type of entrepreneur : the social-consciousness-driven entrepreneur. I think it is time we paid serious attention to them... "

    Source - PSI Focus.

    The forgotten player on the stage of local economic development is the community economic sector that exists within the larger economy. Over the last decade, the nature of the economic debate has polarised between consideration of the market-oriented "public" and "private" sectors, and questions of ownership and control of the resources between these two options. That there is tremendous potential in the community sector is clearly evident in overseas examples in Britain, Europe and the United States. John Pearce, leading consultant on community enterprises in the UK, defines the enterprises within the community economic sector as " likely to be low in financial profit but high in community benefit. They often straddle the lines separating the formal and the informal economy, the paid and the unpaid. They are likely to be service oriented. They are influenced by values based upon human worth, environmental sustainability and mutuality...".

    Pearce suggests that the community economic sector over the last 20 years has had good performance in the following areas : Creating and managing new venture workshops and workspace; Property development with a mix of housing, commercial/industrial, community and environmental uses; Running training programmes; Running job creation schemes for the unemployed; Offering local social services, often on contract to the public sector; Running key commercial services which the private sector cannot make enough profit from; Providing care services; Providing recreational activities; Running local tourist or heritage centres; Running support services to other community organisations; Providing low-cost housing; Providing low cost personal loans, and loans to small enterprises.

    Japanese workers are working less and taking more holidays. Last year, for the first time since World War II, the average working week in Japan fell to under 40 hrs. Mind you, the workaholic Japanese can afford to give themselves some slack time ... they still work longer hours than any people in the world. 1992 figures (the latest available) showed they work on average 2017 hours throughout the year. Compare that to the average American worker putting in just 1957 hours, British 1911 hours, German 1870 and French 1993. Holidays in Japan still remain shorter than in many other countries. Japanese workers get a minimum of two weeks off, plus 13 public holidays. Japanese workers also put in an estimated 1.3 hrs of unrecorded and unpaid overtime per day. a widespread practice of "service" to the employer which is still prevalent in Japanese companies.
    Source - New Zealand Herald, 28/10/94. Japanese work less.

    Fewer employees are participating in employer-subsidised superannuation schemes, despite the government urgings that we should all save more for our own retirements. Employers in NZ spent 3.5% less on fund-matching schemes this year than last, according to Statistics NZ. Some reasons : many workers don't expect to be with their employer long enough to join a super scheme; many workers aren't earning enough to afford this form of long-term savings; super commitments often have strings attached that many workers are not comfortable with.

    Universities have agreed to include their degrees in the new qualifications framework, removing the last big stumbling block to a national qualifications system.
    Source _ The Press, 24/11/94 Universities and NZQA, The Press 17/11/94 Fundamental flaw at the heart of the new qualifications plan, The Dominion 18/11/94 Universities join national qulaifications framework by Sarah Catherall

    Do the best jobs go to the people with the best qualifications? US writer William Bridges in his new book Jobshift (pub Addison Wesley) doesn't think so. He believes that this rule is a half-truth because the whole idea of qualifications is changing. The importance of qualifications are giving way to the importance of attitudes and temperaments. Bridges : " The old qualifications included degrees or certifications, length of experience in a certain job, and recommendations. Today most recommendations are known to be hot air and tail-covering platitudes. Experience is more likely to produce a repetition of the past than the new kind of approaches that today's conditions demand. And there often isn't a degree or certification in the activity that today's organisation needs. " Bridges prescription - today's jobseeker needs D.A.T.A. - that you really want to do the work (Desire), that you are good at what the work requires (Ability), that you fit that kind of situation (Temperament) and that you have whatever other resources the work requires (Assets).

    Feedback from The Treasury. Dr Jim Hagan, Manager of the Working Age Policy Section writes : " Your description of Professor Peter Lloyd's presentation provided a different impression to the one I gained from my staff who attended the NZ Assoc. of Economists Conference. As I understand it, Prof. Lloyd was not "critical of a decade of reform", rather, he supported the economic reforms, and said they had not gone far enough.

    Lloyd identified three gaps in the reform process:
    -- Statutory marketing authorities with monopoly trading powers (The Diary Board, The Apple and Pear Marketing Board)
    -- Flat-rate, tax funded superannuation; and
    -- The lack of a capital gains tax.

    Prof Lloyd did not believe "Treasury should be responsible for a desired rate of growth" nor did he suggest this be written into the job description of the Treasury Secretary. He said this approach would be one way of focussing attention on policies that would raise the underlying rate of economic growth. When questioned further, he said the approach was unlikely to work in practice because of a lack of obvious instruments with which to target fiscal policy."

    Average weekly earnings for employees in NZ rose 2.8% in the year ended August 94. Average weekly earnings for males is $677.32, and for females $497.09.

    Forty per cent of all British children live in poverty today, writes journalist John Pilger in the New Statesman and Society. It is a breathtaking claim, yet the evidence was produced on a World in Action documentary in September by York University. Pilger says that although this figure was probably the highest since modern research into poverty in Britain began, it should not come as a surprise. In July, official figures showed that, since 1979, the number of children living in poverty had quadrupled. At least 14 million children and adults, a quarter of the British population are now impoverished, compared to 5 million at the time when Margaret Thatcher was elected. A fifth of all of Europe's poor in the 1990's are Britons.

    Pilger points out that the damage is not confined to a so-called "underclass", but runs wide and deep within British society. He quotes Richard Wilkinson's landmark research at Sussex University, who has shown the decline in life expectancy among British men and women due to social impoverishment. Wilkinson has traced the decline to 1985 when the gap between rich and poor began to widen as the tax and benefit systems were manipulated to favour the well-off.

  • Pilger believes that the level of poverty in Britain has become "sound monetarist policy which is now shared by both the Tory and Labour parties." He observes that Labour is now to the right of the Torys on a number of issues. His prediction : Under the guise of "modernising" welfare, the social wage in Britain will be slashed.

    John Pilger will be in New Zealand this week, speaking at the 1994 Media Peace Awards in Auckland on Friday 25th, promoting the new edition of his book "Distant Voices", and speaking on Death of a Nation his documentary on East Timor. Contact Foundation for Peace Studies 09-373-2379.

    Source _ New Statesman & Society, 2/9/94, The power that is within our grasp

    Parliamentary politics has for me personally become a brutalising arena to which I can no longer subject myself.
    -- Jim Anderton, in announcing his resignation as Alliance leader

    Social Service agencies expected to fill the gap left by government moving away from welfare need to be better organised, managed and led. There is real scope for groups to advocate on behalf of clients, but to do it well they must understand the political machine...
    -- Canon David Morrell, Christchurch City Missioner

    " The government is asking 10 thousand of NZ's most vulnerable citizens to suffer financial hardship or face the costs associated with moving house."
    --Major Campbell Roberts, spokesman for Christian Social Services Council

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