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    Essential Information on an Essential Issue

    Letter No.17

    16 May, 1995

    The rising NZ Dollar (see last Jobs Letter) has been cited as the main reason behind the loss of 88 jobs at the McKechnie Metals plant in New Plymouth. The company is critical of the government's hands-off approach to the recent currency movements against the US and Australian dollars. A statement from the McKechnie's says : " The continuation of the government's deliberate non-intervention policy can only result in a serious deterioration in the NZ economy ... one of the major exports to Australia in the coming months is likely to be jobs..."

    Engineers Unions national secretary Rex Jones notes that McKechnie's is an award-winning company that has adopted a total quality management approach and increased its productivity. The company estimates that in the last 12 months it has lost 15% of its competitiveness because of currency movements. Jones : "It is almost criminal that an export company like this is suffering because of a Reserve Bank policy that drives up the exchange rate. "

    Source The Daily News, 5/5/95 Jobs go as dollar takes off, The Dominion, 5/5/95, Job losses blamed on strong dollar, New Zealand Herald, 6/5/95, Jobs go as dollar rises
    Project Achievement is an Auckland Pacific Island Affairs Ministry scheme which provides Pacific Island school pupils with a "mentor" to help them prepare for tertiary studies or employment training. The mentor's role is to focus on the ambitions of students and parents, ensure they are realistic, and then help make them happen. Pacific Islands Ministry chief executive Apii Rongo-Raea says 60 secondary pupils were on the project last year. All but two of these pupils had entered tertiary studies or employment training. Before being given mentors, two-thirds of the pupils had not thought they could gain their long-term goals. Project Achievement will be expanded to 120 pupils in Auckland schools this year.
    Source Sunday Star-Times
    What happened to the government review of all its enterprise and business assistance schemes? The review team (see JL14) was meant to report at the end of March, but this has been delayed because of a separate review of TradeNZ and the need to fit their recommendations into the Employment Taskforce process. Our best guess for the reporting date is the end of this month.

    The Dream Academy is a programme developed by Maori actor and entertainer Ray Bishop in order to inform youth of sporting, educational and employment opportunities and to arrange contacts in these areas. Watch for the single CD and video of """Become Somebody""" which features a 70-strong chorus of NZ's top sporting and entertainment personalities. Sales of the CD will benefit the Academy which hopes to channel "young energy and talent into dreams and aspirations..."

    The heat is going on government for allowing the fishing industry to use cheap-labour foreign crews on chartered boats catching fishing quota in NZ waters. The case in point : A Christchurch fishing company Takaroa Industries has chartered a Japanese trawler to catch its quota, and has permits from the Immigration Service to employ a crew of Indonesians. Talleys Fisheries Boss Peter Talley told the Independent that the Immigration Service is allowing fishing companies to hire cheap foreign crews without properly advertising the jobs to NZers. There are about 5000 foreigners fishing in NZ waters, and Talley believes those jobs would help trim our own job queues.

    The commodity at stake here is super-cheap wages. When the Japanese or Korean boats come here under charter to NZ firms, they pick up Indonesian, Burmese or Filipino crews on the way here because of the cheap labour costs. Last year, there were claims that Ukranians were working on foreign-owned NZ-chartered boats and being paid $4.50 for a 12-hr day. The Fishing Industry says it is moving as fast as possible to ensure they are employing 75% NZers in the fishing harvest by the year 2000. But getting the boats up to NZ's minimum employment wages and standards may result in some fishing charters becoming uneconomic.

    With Treaty of Waitangi-based fishing settlements, and the promise of fishing opportunities being held out to unemployed Maori, Bob Edlin of the Independent has highlighted the "astonishing" Ngai Tahu tribal connection to the controversial Takaroa Industries fishing charter. Edlin : "Most NZers remember being told fishing quota was being given to Maori so they could become involved in the fishing industry. This engendered visions of unemployed Maori surging for work on the boats and learning new skills. The idea was to substitute this economic opportunity - a big share of the rich harvest of the seas - for the loss of tribal lands ... But Ngai Tahu corporate chiefs are just as focused as others on profit-optimising enterprise, meaning the job opportunities are going to Indonesians ..."

    The Second Chance Business Register is being mooted in a campaign to help former offenders into employment. The Wellington Prisoners Aid and Rehabilitation Society has applied to government for funds to establish the pilot, and hopes to stamp out job discrimination against convicted criminals. The Second Chance Register will list companies that will consider employing staff with criminal records and is based on a similar scheme run in parts of Australia. Society national director John Whitty also wants human rights legislation amended to make it unlawful to discriminate on the ground of irrelevant criminal convictions.
    Source Sunday Star Times, 7/5/95, Scheme plans second chance for offenders
    With Jacques Chirac elected as the President of France, he becomes one of the most powerful leaders in the West, and one the first heads of state who will be still in office in the year 2000. The main focus of the French elections was not the resumption of nuclear testing in the Pacific, but the near-record 3.25 million people unemployed, now exceeding 12% of the French workforce. Student fury over the 20% youth unemployment rate boiled over into riots recently, and there have been a spate of other street demonstrations against joblessness. Says Chirac in his victory speech : " Our main battle has a name : unemployment. The conventional remedies have failed. We need a new approach and new methods ..."

    Chirac senses that job insecurity now touches all of French society, and he says he is prepared to spend much more money on job creation and training schemes - even at the risk of budget deficits that will endanger French eligibility for joining the European Union single currency in 1997. Under consideration : more public funds for training centres, especially those training the unemployed to use high technology machines ... and measures to introduce a shorter working week.

    The French have estimated that if they universally adopted a four-day, 33-hr work week, with an average 5% reduction in salary, they would create two million new jobs and save $28 billion in unemployment insurance. - from the UN Human Development Report 1994

    Amidst the French national obsession with unemployment, even wine growers are doing some extraordinary things to help out. In one French province, they have printed the short cv's of a thousand unemployed onto wine labels and pasted them on a million bottles of wine. Their hope is that a discerning palate may also lead to a discerning employer.

    Source BBC World, also, The Dominion, 19/5/95, France's mood of failure, The Daily News, 9/5/95, Chirac new French president
    In Australia, a major report on Aboriginal life shows that 38% of aboriginals were unemployed compared to the national figure of 9%. Only 30% of aborigines are employed in jobs other than a work scheme.

    It was the frequent juxtaposition of unemployed and overworked individuals amongst his career counselling case-load that convinced Canadian Bruce O'Hara that there needed to be a better and more balanced way to apportion working hours. O'Hara founded Work Well, a resource centre to promote voluntary arrangements to reduce or restructure working times: job sharing, phased retirement, permanent part-time, banked overtime, flexitime and telecommuting. O'Hara's recent book """"Working Harder Isn't Working contains a detailed plan for implementing a four-day working week and general advice on "how we can save the environment, the economy and our sanity by working less and enjoying life more..."

    Some of the suggestions to reduce working hours :
    Job Sharing - an arrangement in which two workers share the hours, duties, salary, and benefits of one position.
    Phased Retirement - where workers can cut back their work weeks in the years before retirement, without reducing their eventual superannuation.
    Banked overtime - where workers can take extra time-off in lieu of overtime pay.
    Permanent Part-Time - where the worker works less than full time work, but with the benefits and seniority rights comparable to a full-time worker.
    Deferred Salary Leave - a savings plan where, typically, 20% of an employee's wages are held in trust for four years, after which they can take a year off, with pay.

    Like many others, O'Hara is struck by a strange paradox : futurists have long been united in predicting the coming age of leisure and abundance - yet most workers in western economies were instead finding themselves working more and more - for less and less. O'Hara : "Prosperity and leisure is not an either/or choice. In the 1990's we will have to create the means to have them both - or we will end up with neither..."

    Working Harder Isn't Working by Bruce O'Hara (pub. New Star Books, Vancouver)

    Back in NZ, researchers at the Otago University's human nutrition department have estimated that it costs $43 per week to feed a man and $41 to feed a woman on basic food items. The survey found that an adolescent boy costs $55 a week to feed, while an adolescent girl cost $46.
    Source The Dominion, 1/5/95, $43 weekly to feed a man
    The economic changes of the last decade have led to more welfare dependency amongst NZers. Statistics NZ has produced figures revealing a breakdown on the amount people are able to contribute in taxes, compared to the amount in benefits they receive. The figures for all NZers show that in 1987/88, we paid 82.5% more tax than we received in benefits. But in the 1993/94 survey, this gap had dropped to 45%.

    When these figures are broken down along ethnic lines (see sidebar on this page) that a quite startling picture of welfare dependency emerges, particularly amongst Maori and Pacific Islanders. The Statistics NZ data shows that Maori have been carrying more than their share of the burden of dependency arising from the economic reforms of the last decade. In 1987/88, Maori on average received 23% more on welfare benefits than they paid in direct tax. In 1993/94, this gap had grown to 50%.

    Source Sunday Star Times, 16/4/1995, Major initiative to get Maori off the dole
    During the submissions to last year's Employment Taskforce, there were many people expressing an interest in the concept of introducing a Universal Basic Income, or UBI, which would fundamentally reform our approach to welfare in this country. The ideas did not surface in the final Taskforce recommendations, but UBI advocates have been gathering steam in recent months in order to further their research and generate greater interest in the concept.

    The Universal Basic Income is a government funded payment to all citizens regardless of age, gender, marital, work or income status. It would replace all other forms of publicly funded income assistance, be tax-free, and not be affected by any other income or means-testing. Most submissions to the Taskforce suggested that the level of the Basic Income be in the region of $100 a week, or around $6-8000 per year. The amount could be determined by the age of the recipient with adults receiving more than children, and superannuitants receiving more than `working age' adults. The proponents of UBI believe that because people want more than what they would get on the basic income, and also want the social benefits of work, the introduction of UBI would not result in a mass exodus from the workforce.

    Last month, a national organisation was established to promote the concept of UBI in NZ. A workshop, organised by the Manawatu Working Party on UBI in Palmerston North, was addressed by economics professor Srikanta Chatterjee of Massey University and Colin Whitmill who attended the European Congress on UBI last year. Contact : UBI Group c/- Private Bag 11-042, Palmerston North.

    Is new technology going to see an end to more jobs ? Not so, according to and OECD "Jobs Study: Evidence and Explanations" published last year. If anything, the current wave of technological change has been modestly beneficial for jobs. The demand-boosting effects of technology have more than offset the job-destroying ones. And the countries that have been most successful in creating jobs - America and Japan - have also seen the fastest shift in their industrial structure towards a high-tech, knowledge-based economy.

    Figures from Statistics NZ 1993-94 household economic survey.

    on average receive 50% more in welfare benefits than they pay in tax.

    on average receive 64% more in welfare benefits than they pay in tax.

    on average pay 63% more in tax than they receive in welfare benefits.

    on average pay 229% more in tax than they receive in welfare benefits.

    ALL NZers
    on average pay 45% more in taxes than they receive in welfare payments.

    "A very glossy picture has been painted today, which omits any reference to the social costs of the NZ experiment. Is it not infinitely irresponsible to be promoting the NZ experiment as a desirable one for other countries which already suffer from endemic inequalities, especially when that process has devastated the lives of hundreds of thousands of NZ people ? ..."
    - Academic and Activist Jane Kelsey, at the "NZ : the Turnaround Economy" seminar at the ADB Bank Conference.

    "Price stability is not only important to the economy, it's very important to social justice. People with high incomes cannot only protect themselves from inflation, they can actually make inflation work to their advantage ..."
    - Reserve Bank Governor Don Brash, responding to Jane Kelsey at the ADB Conference.

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