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    Essential Information on an Essential Issue

    Letter No.15

    18 April, 1995

    There are now over 50 Industry Training Organisations (ITOs) that have been officially recognised or are in the approval process. These groups have the responsibility of developing and delivering training to their particular industries. In addition to the ITOs, there are more than 200 industry advisory groups working with the NZ Qualifications Authority (NZQA) to develop units of qualification standards and the assessment processes which support them. The NZQA reports that these advisory groups cover more than 80% of NZ industry.

    The ITO training structure has now been operating for three years, since the passing of the Industry Training Act in 1992. The ITO strategy is based on (a) getting training unit standards registered on the NZQA 'Framework' of qualifications, and (b) restructuring the industry training delivery systems to fit in with the new standards. Different ITOs are at different stages of the process ... causing some confusion amongst the public mind as to the status of various training programmes. There is some uncertainty as to when the re-structuring process will finally be completed.

    ITO consultant Ken Harris is concerned that the details of the new Industry Training strategy are not well known amongst employers, even after three years. In an article in the Dominion, Harris quoted recent attitude surveys in several industries that indicate that ITO awareness has reached 70-80% of employers, which, he says "is good news..." But when it comes to a real understanding of the new qualifications system and what ITOs actually do, the accurate responses from employers drop to a level of 20-30%.

    This ignorance amongst employers of the wider role of ITOs seriously effects the issue of who will fund the ITOs in the long run. The development phases of ITO establishment has been funded by government, but when the ITOs become fully operational, they must begin to generate income from their respective industries through the provision of user-pays training services. Ken Harris : " This is a real challenge to ITOs... unless they can quickly establish a realistic understanding of the role they play, they will find it difficult to sell their services and generate income from industry...One of the key issues here is industry's willingness to pay for training - and NZ industry does not have an encouraging record on that account..."

    "Beyond the Employment Taskforce" is the title of an Auckland Employment Issues Forum being organised next month by the Auckland New Venture Trust. The forum will focus on the Employment Taskforce recommendations, and how they will effect local initiatives in employment and training, and community responses to unemployment. There will also be a discussion on the potential of local Employment Commissioners as recommended in the Taskforce report. Date : Tuesday, 16th May 1995 (9 am - 4:30 pm) Contact : Yvonne Krissansen 09-366 0860

    An NBR-Consultus opinion poll has found that most voters want the government to use the expected budget surplus on increase social service spending rather than on tax cuts. In the poll, people were asked whether this year's $3.5 billion budget surplus should be used to reduce taxes, pay back debt, or increase spending in areas such as health or education. The figures : 52% wanted increased social spending, 29% wanted debt repayment, and only 6% supported tax cuts. (The government has stated its first priority is to reduce debt, and Bill Birch says he might cut taxes from 1996-7 year).
    Source - National Business Review-Consultus poll conducted nationally, canvassing 750 people over 18 yrs, margin of error 3.5%. reported: The Dominion, 1/4/98, Social spending sought, not tax cuts - poll
    Hot : Investment in the Manufacturing Sector. At a briefing on the outlook for manufacturing, Manufacturer's Federation reported that the higher levels of investment coming into this sector should lead to a growth rate of 8% a year, meaning the entire sector could by about 50% by the year 2000. The economic recovery in NZ is now in its 14th quarter, the longest upturn since the mid-1970's. Manufacturers say that the investment in this sector is equivalent to what happened in Germany in the 1950's and 60's, and in Japan in the 70's and 80's.
    Source - The Dominion, 29/3/95, Manufactures expect 50% growth, New Zealand Herald, 2/4/95, Manufacturing on a roll
    Visiting American professor Jeffrey Pfeffer says that NZ's continuing economic growth and international competitiveness depends on developing the "people assets" in business : "Focussing solely on productivity and profit was a mistake, as is treating employees as costs rather than assets..." Pfeffer says he would hate to see NZ go down the road of the US, in which companies were doing well, but the economy was not. "...and that's happened because you have a bunch of people who have been 're-engineered' and are out on the pavement, and they can't participate in the economy because they can't afford to buy anything. "

    Pfeffer : "As the economy restructures, you need to make sure that you have adequate training and make sure that people are assisted with the transition. It's fine to talk about the redeployment of resources into more productive and more efficient uses, but if you are talking about human resources there needs to be some help with that..." Pfeffer believes that as well as staff training, companies should help staff cope with organisational change, relocate employees if the company moves, and find new jobs if redundancies were unavoidable.

    Professor Pfeffer, who specialises in organisational behaviour, is from Stanford University's graduate school of business. He was guest lecturer at Victoria University's graduate school of business.

    Source - The Dominion, 3/4/95, Employees 'assets, not costs'
    What students are now getting in allowances. Aged 16-24 yrs : $92.29 (living at home), $115.37 (away from home); Aged 25 yrs and over : $110.76 (living at home), $138.46 (away from home). The single over 25 yrs unemployment benefit rate is the same at $138.46.
    Source - New Zealand Herald, 3/4/95, Allowance increase for students
    More on Unemployment and Overwork (see last issue). Surveys in Canada indicate that almost one third of full-time workers would prefer to be working less - even if it meant earning less. Canadian Economist Frank Reid has estimated that about half the hours opened up by significant worktime reductions will turn into new employment. Reid calculates that if everyone in Canada who wants to work less were allowed to do so, it would open up 250,000 new jobs for Canadians. - Canadian Public Policy, Vol 12, No 2.

    Overwork is more often than not driven by the need to maintain a lifestyle that is slipping as the value of household incomes fall. Auckland Economist Keith Rankin sees the increasing role of women in the workplace as reflecting a householder strategy to preserve living standards as their real incomes fall. In a paper in the NZ Journal of Industrial Relations, he notes that more young people, mothers and older people seek work or delay retirement to supplement the main breadwinners income. He calls this 'the added worker effect'.

    Looking beyond the year 2000, Keith Rankin sees that if the recovery or economic expansion is limited, then the 'added worker effect' will be maintained. The alternative scenario is for households to adjust to reduced expectations for their living standards, reverse their efforts to seek employment and to opt for greater amounts of leisure time.

    "Men and Women as Breadwinner and Decisionmakers in 2005" is the title of a NZ Future's Trust report on the changing work environment. The report was used as a key paper at the International Working Women's Day conference in Wellington earlier this month. The report explains workplace trends in the next ten years amidst a huge upheaval in the way people work, and in the changing nature of business organisations.

    Source - Men and Women as Breadwinner and Decisionmakers in 2005, Available from The NZ Future's Trust, P.O.Box 12-008, Wellington for $8.
    In a recent landmark English High Court case, it was found that a social services officer suffered a nervous breakdown because of the pressures of extra work, saying that the officer's employer had acted negligently in rejecting his concerns about workload. In NZ, Canterbury University senior law lecturer John Hughes believes that this ruling may pave the way for kiwi workers here to sue for similar cases of stress. Workers have had the right to sue for stress-related illness since the the law was changed in 1992 to prevent workers from claiming ACC for non-physical injuries. They can now go to the courts for compensation.

    John Hughes told Kim Hill on Radio NZ that the English court case raises many issues for unions and others who are arguing against the effects of downsizing and redundancies on their surviving members. He reports that unions are already conducting surveys amongst members as to stress levels and the impact that stress is having on their working lives. Hughes : "As soon as employers become aware of the problem through surveys like these ... they are put on notice, and run an increased risk of being found liable ..."

    Harvey Brenner is a Harvard University Researcher who studies the patterns behind the occurrence of disease. In studying hospital records, Brenner has found that the rates of admission mirror changes in unemployment levels. Brenner also found that increasing levels of overwork measurably increased hospital admissions. His figures : As much as 20% of all admissions to hospitals can be attributed to unemployment. He estimates that these figures would also be comparable for the effects of overwork. - from "Working Harder Isn't Working" by Bruce O'Hara (pub. New Star Books, Vancouver)

    Source - The Dominion, 4/4/95, Ruling may pave way for workers to sue for stress
    The Wellington Volunteer Centre has for years been trying to convince politicians and bureaucrats that voluntary work is a significant pathway to paid employment. They now have the local figures available to back up their case. A survey has been done of 1400 people who have registered with the Volunteer Centre between January-June 1994. 51% identified as being unemployed and seeking paid work when they came to the centre, and a further 27%, expected to seek paid work in the not-too-distant-future.

    43% of volunteers said they increased their work experience and further developed their skills by doing voluntary work. The Volunteer Centre says that this is a clear signal that on-the-job training is happening through volunteer placements. 47% of volunteers reported that their work had improved their chances of finding a paid job, especially in contacts for future work, work references and improved confidence and self-esteem. Of those clients who were unemployed when they joined the Volunteer Centre, 65% were no longer unemployed at the time of the survey ... "a superb picture of people using voluntary work to move ahead..."

    Hamilton Maori entertainer Rim D Paul has begun a nationwide training project to lift the profile of Maori music. The project was born out of a study of the music industry which showed a lack of resources for Maori musicians. Paul hopes to develop iwi-based programmes for Maoris to nurture their musical talents and plans to establish Maori Schools of Music around the country by 1996. - Helene Anderson NZH

    Trend : Cheap labour is no longer the big factor in the choice for a location of a business investment. Charles Oman of the OECD has been studying the changing share of low skilled wage costs in overall production costs. He shows that it has been rapidly falling - from around 25% of production costs in the 1970's to perhaps 5-10% today. This reduces the incentive for Western companies to relocate to low-wage countries. Time magazine says that thanks to new production and inventory techniques, many industries of the future will no longer depend on hordes of blue-collar workers toiling along huge production lines : "Far more important than low wages are educated workers and good transport and communications..."

    Watch for a political backlash against people actually using the recent Citizens Initiated Referenda Act to get a national poll on government policies. Last week the Firefighters easily passed the 232,000 signature mark required to trigger a poll on whether they should lose their jobs. A date for the referendum must now be set for the next year. Even though his party introduced the Referendum Act, Jim Bolger is already criticising the cost of such an exercise, estimated to be about $10 million. He is supported by former Labour PM Sir Geoffrey Palmer who says is "absurd in the extreme" to determine people's conditions of employment and industrial relations matters by referendum. A Dominion editorial last week calls for caution: " NZ'ers are too obliging with lobbyists, pressure groups and agitators ... we are likely to sign almost any petition thrust in front of us..."
    Source - New Zealand Herald, 7/4/95, Referenda criticised
    An article by columnist Gordon Campbell in last week's Listener suggests that 19.1% of our potential workforce is deriving all or part of their income from benefits of one sort or another "...right now, at the height of the recovery..." His figures come from adding up all those on benefits as of March 1995 : The DPB (103,155), sickness benefit (32,851), invalids (39,012), unemployment (140,702), training benefit (13,820), widows (9,112), transition to retirement (7,537) and ACC earnings-related compensation (about 100,000). Grand Total : 446,189, compared to the 2,331,800 NZ'ers in the 15-64 yr old age group.

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