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    Essential Information on an Essential Issue

    Letter No.11

    21 February, 1995

    Our media watch reports features on employment, livelihood and the future of work

    Official unemployment figures have dropped to 7.5% or 128,000 people out of work, and is at the lowest level since September 1990. We include our special insert on the jobs figures with this issue of The Jobs Letter.

  • While actual number of jobs in NZ is at a record high, and the spin on the news has seen the figures trumpeted as the `best result in nine years' and "further evidence that current economic policies are directly benefiting NZ'ers," (Wyatt Creech) ... it is worth remembering that figures are just returning to the level they were just before National took office in 1990, and the number of registered unemployed in NZ is still three and a half times the level it was in 1985.

  • It should be noted that while there has been a drop of 4,000 in the number of official unemployed in the last 3 months, at the same time there has been a rise in the jobless figures of 5,000 people. This is a significant rise in the `discouraged' as defined in the household survey.

  • Investment banker Bankcorp warns that further drops in the unemployment figures in will be harder to achieve. Figures indicate that the rate of decline slowed down at the end of last year, suggesting that economic growth had also begun to slow : " We expect the continued economic growth to be sufficient to absorb the increase in the size of the labour force, but perhaps not to utilise many more of the unemployed."
    Source -The Dominion 17/2/95 Employment up 75,000 to nine-year high _ Simon Kilroy, dns 17/2/95 Warning on drop in jobless, New Zealand Herald 17/2/95 Job figures climb to best in nine years by Audrey Young

    Steve Maharey, Jim Anderton and Wyatt Creech have had their first multi-party meeting to discuss the details of last November's Employment Taskforce report. Creech says it is impossible to predict how long the negotiations among the parties will take ... it depends on how far apart their positions will be on the 120 recommendations in the report. He expects the first spending initiatives from the Taskforce to be in this year's Budget.

  • Who got paid what for the Taskforce report : BERL for economic forecasts $11,534, Daphne Brasell for writing the Issues paper $6,942, Eugene Doyle for writing the 40-page summary paper $9,305, Martin, Jenkins de Lore for media and communications advice $4,013, Missen Design for design $5,622, and Network Communications for organising the regional consultations $139,265.

    There is considerable frustration amongst community groups as to the drying up of Community Employment Group (CEG) funding (see issue 10). Dennis Oliver, the Executive Director of the YMCA in Hastings asks : Does any other government department run out of money halfway through the year ? Writing to The Jobs Letter, Oliver remarks : " What happened to the recommendation No. 17 of the Prime Ministerial Taskforce which stated that `a review of current funding and delivery arrangements for enterprise assistance and ongoing mentoring assistance' should be undertaken ?"

    Oliver suggests that if the funding problem is unique to CEG, then he is led to two assumptions : (a) the top level management at CEG is inefficient in failing to plan the year ahead, or (b) CEG and its clients have insufficient political clout to get a share of the increased funding cake that the Taskforce recommended. Oliver : "The real reason is unmentionable by CEG and worse still, the unmentionability of the unmentionable is unmentionable." Oliver recommends that CEG clients make their local MP's aware that they need more money "if the great work started is encouraged to grow towards its natural potential..."

    The good news flows from the Christchurch Youth Employment Service. The Jobskills project - a joint Christchurch City Council and New Zealand Employment programme - has put more than 1000 young people into new jobs. Christchurch's Mayor Vicki Buck says that the scheme has an 83% success rate for continuing employment for the young workers once their six-month subsidy expires. The Jobskills project provides a full wage subsidy for young people aged 16-24 yrs in exchange for an employer offering support and training on the job. Wyatt Creech says that the schemes success was likely to lead to a similar national programme.

  • Despite the huge success of the Jobskills scheme, it has also highlighted worrying problems with unemployed youth in Christchurch. Christchurch City Councillor Garry Moore says that nearly half the local young unemployed who qualified for the scheme did not turn up for their initial or second interviews. He says the Jobskills programme has turned up many worrying aspects about youth unemployment, including a large number of young people who have never worked and have low motivation levels. Moore : We should be applauding the success of the scheme, but at the same time not ignoring the bedrock fact that half the under-25's eligible for the scheme could not hold down a job. It has highlighted what we already knew in our hearts - that the price of unemployment is horrendously high for some."

    Moore believes the government should bring in compulsory job schemes for school-leavers. "The next step forward is to work out what we can do as a society. The Employment Taskforce has already provided a lot of guidelines pointing towards local communities coming up with the solution to these sort of problems..."

    Source -The Press , 3/2/95 Job scheme puts 1000 youngsters into work by Greg Jackson, The Press 6/2/95 Call for debate on jhob scheme effectiveness by Greg Jackson

    A Social Welfare report, released under the Official Information Act, reports that foodbanks emerged as a feature of NZ's welfare landscape in the 1980's, but concludes that "the explosion of demand" was linked to the 1991 benefit cuts. The report, which was prepared before the govt offered an extra $33.5 million to help low income earners and beneficiaries late last year, said that there is likely o be little reduction in demand without changes to govt policy : "Indeed, it is likely that foodbanks will become entrenched as a more enduring component of the welfare system unless action is taken to reduce demand for their services by some form of public provision." The report says that food parcels valued at $500,000 a week are being distributed in NZ.
    Source- dns 8/2/95, Report: Benefit cuts caused foodbank boom, Nick Ventner, DNS 7/2/95 Clark calls on PM to confront pverty, New Zealand Herald 8/2/95 Food parcels cost $25m a year, The Press 8/2/95 Food banks may linger, Govt told by Michael REntoul

    More than a quarter of new applicants for sickness benefits are people transferring from the unemployment benefit. Many of these are applying because their health has suffered through the stress of long-term unemployment. The Social Welfare social policy agency, which gives policy advice to govt, recently made this discovery during an investigation into the reasons for large rises in the sickness and invalid benefits.
    Source- The Dominion 3/2/95 Many invalids former dole-getters

  • TARGETING PUSHES ACC CLAIMANTS ONTO THE DOLE The ACC plans to shift many of its claimants off ACC and onto the dole ... when it changes it's claim criteria in measures predicted to save the ACC up to $400 million. ACC Managing Director Gavin Robbins says that long-term claimants who may have been rehabilitated are staying on ACC because it pays more than the unemployment benefit. ACC Minister Bruce Cliffe plans to assess minor claims that seem to have dragged on for years. There are about 33,000 people who have been on ACC for more than 10 years, and Cliffe says there has been no effective reassessment procedures once a claimant began the scheme. Also being looked at : the possibility that long-term claimants be given the chance to "capitalise" their entitlements with a lump-sum payout.
    Source- Daily News 9/2/95 ACC review could see savings of $400m

    Research in the United States shows that their drop in unemployment is the result of people who lost their jobs during the recession being forced to take low-paid, part-time and temporary positions. Steve Maharey, in an recent article, observes that while the US unemployment rate has dropped from 7.4% to 5.4%, people are not getting the kind of `good' jobs they want. In the place of secure fulltime jobs, people are being offered low-wage jobs in service industries, particularly retailing. Half the middle-income people who lost their jobs in the recession and found jobs again are earning less than before. One in ten have only part-time or temporary jobs. Maharey reports that wages in the US are growing at the slowest rate on record. At the same time, companies have had greater profits, now reaching the highs experienced in 1989.
    Source - Time 6/2/95 That Sinking Feeling by John Greenwald

    Foreign investment in New Zealand has risen substantially over the last decade to become the second highest in the OECD as a proportion of GDP the Secretary to the Treasury Dr Murray Horn stated in Sydney recently. About a third of this investment, nearly $5 billion, has come from Australia.

    Employment and the Family. Latest figures from Statistics NZ show that, in 1991, the traditional nuclear family - where the parents are married with at least one child and the father is the sole breadwinner - makes up only 14% of all families. Nearly 30% of two-parent families had both parents in full-time employment. This was the same proportion as in 1986. However, over the same period the number of families where neither parent was in paid work has doubled from 6% to 12%. Two-parent families where the mother was the sole earner also grew rapidly in this time, and now made up 4% of families.
    Source - New Zealand Herald 19/1/95 One-person homes now 20pc, The Dominion 19/1/95 Huge increase in number of one-parent families by Simon Birkbeck

    We all know that, over the last generation, women have joined the paid workforce in unprecedented numbers. Australian statistics tell us that between 1966-1992, the labour force participation rate of married women almost doubled, from 29% to 53%. But while women are more active in the paid workforce, they also do four times as much housework as men, three times as much food preparation and cleaning up, and eight times as much laundry. Were women ever unemployed ?
    Source - New Zealand Herald 1/3/95, Women still doing most housework NZPA

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