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    Essential Information on an Essential Issue

    Letter No.21

    17 July, 1995

    We ask a cross-section of our subscribers to comment on the multi-party accord on employment.

    There is widespread disappointment with the multi-party agreement signed a fortnight ago by the leaders of the National, Labour and Alliance parties. We contacted many of our subscribers over the last week and the majority say that they would have preferred more of a committed plan of action from the political accord, rather than just an affirmation of policies. There has been a general thumbs-up for the Employment Taskforce itself, and their process of public consultations while reviewing our current employment policies. We have included a selection of our interviews as a special feature of this Jobs Letter.

    The Review Panel of Career Information and Guidance has reported back to the Minister of Education. The review recommended that the Career Service's role be limited to providing careers information, and that the guidance and counselling functions be contracted out. It says that the lack of co-ordination between government agencies means that people entering and re-entering the workforce are often missing out on career information and advice. It says that the Employment Service should provide more careers advice services, along with secondary schools and tertiary institutions. It also recommended that a central database for careers information be investigated, more money be allocated for careers advice for Maori, Pacific Islanders and rural groups, and national guidelines be established which will outline school's careers guidance responsibilities.
    - New Zealand Herald 30 June 1995 "Career service role change suggested"
    The relaxation of criteria for special needs grants announced by the government late last year has been responsible for a huge rise in recipients of these grants. Annette King last week released figures obtained under the Official Information Act which showed that more than 74,000 people received these grants for food in the first five months of this year. This is three times the number for the same period in 1992. King says that many of these beneficiaries have now obtained their maximum allowance for these grants and she predicts that the demand for food banks will rise back to higher levels.
    Source - The Daily News 10 July 1995 "Demand for food help trebles"
    Average household incomes in NZ are forecast to rise during the next two years, but the gap between rich and poor will continue to grow. This is the prediction of the Pacific Economic Co-operation Council in its report Pacific Economic Outlook. The report also says :"Low-skilled workers and households relying on government transfer payments are likely to see their incomes fall relative to growth in average wages and investment income..."
    Source - The Dominion 3 July 1995 "Incomes expected to rise"
    The Labour Party says that, under their alternative budget, they would return benefits to close to the level they were before the 1991 benefit cuts. They would also rationalise them so that the sickness benefit, the unemployment benefit, the training benefit, the woman alone benefit and student allowances were paid at the same rate. Their figures: under Labour, married couples would get $262.24 a week and single adults $157.34.
    Source - New Zealand Herald 4 July 1995 "Labour promises $6 billion to be fair"
    Employees facing redundancy should be taught new skills to allow them to relocate to other industries. This is the view of CTU President Ken Douglas, who was addressing a Nelson employment forum last week. He said that though unions were effective in arguing for financial compensation for employees facing closures and redundancy, more emphasis should be placed on teaching people new skills. He said there should be a legislative requirement on local authorities to play a leadership role in auditing the resources and job skills in their communities and in leading the debate on preparing a strategic employment plan.
    Source - The Dominion 8 July 1995 "Teach new skills, urges Douglas"
    The Engineers Union has come out in favour of company levies to fund Industry Training Organisations (ITOs). They believe it will help avert a chronic skills shortage in the workforce, especially in the engineering, building and construction industries. Union Secretary Rex Jones told The Dominion that the ITOs had a crucial role in identifying skill requirements and ensuring training programmes were set up. The majority of ITOs were struggling on present funding levels which are provided by government grants and voluntary contributions from companies. Jones says that a levy would stop "freeloading" where a few companies carry the training development for an entire industry: " NZ industries reap the benefits, so it is unreasonable to rely on the public purse for funds. It makes sense that companies should increase support for industry training..."
    - The Dominion 15 June 1995 "Training Plan Endorsed"
    There's a shortage of good candidates for chief executive jobs in NZ, and headhunting is rife. The Independent's Barbara Fountain reports that this is part of the fallout from the 1980s when law, accountancy and finance (and not business management) were the favoured subjects at university. Also, the manufacturing layoffs of the late 1980s left a gap in middle management and a lack of people moving up the ranks. Fountain : "Almost a whole generation of potential managers was lost in the '80s...".
    Source - The Independent 7 July 1995 "Top job market left in lurch by `lost generation'" by Barbara Fountain.
    Ian Webster of Opal Consulting says that the market for CEOs has gone full circle. Two years ago, following the first round of redundancies, an ad for a top job would generate 40-60 responses, and " we're lucky to get 10-12." Webster says that after the early redundancy rounds many people found they were holding down the equivalent of one and a half jobs. Now there are moves to restore the balance. He says the NZ skills shortage in CEOs is partly being alleviated by recruiting ex-pat Kiwis returning home from overseas. - The Independent
    Source - The Independent 7 July 1995 "Top job market left in lurch by `lost generation'" by Barbara Fountain.
    The Boost project is a 12-month pilot scheme aimed at young people who are living on the Independent Youth Benefit. This benefit is paid to young people between the ages of 14-18yrs who are either unable to live in their families (often because of violence or sexual abuse} or who have no family willing to support them. This is a group of young people who were neglected by the system in the past. When they qualified for the benefit, they got financial assistance, but nobody was required to take any direct responsibility for them. Once signed on the benefit, it was often eight weeks before anyone checked up on the young people to see how they were doing. Under the new programme, each of the young people are carefully assessed and monitored as to how they can put their lives back together. They are required to be either in school, training, or in part-time work, and most are also expected to complete a range of life-skills courses. The pilot programme is being run in Christchurch, Dunedin, New Plymouth, Wanganui, Henderson and the Far North.
    Source - New Zealand Herald 7 July 1995 "Firm management pulls youth off the scrapheap"
    New Zealand Herald economics editor Patricia Herbert, is recently back from a nine-month Harkness Fellowship in the United States, and has written a four-part series of articles on economic policy and the American workforce. In the first of these articles she writes about the rise of the self-employed in the US, and the rise of an "anxious class" of workers (the bottom 60% of the workforce) who are uneasy about their long-term job prospects and fearful about their children's future. Herbert is critical of `neo-conservative' economic methodology in the US (and NZ) and believes that the current policy practices are hostile to workers interests.

    Herbert describes three major features of this hostile methodology : (1) "...while it is correct in assuming that inflationary pressures can be contained only if wage increases are not allowed to exceed productivity gains, it effectively inhibits productivity growth and investment through maintaining an artificially high interest rate structure." (2) "It assumes that there is a trade-off between the rate of inflation and the rate of unemployment and that high unemployment is the lesser of these two evils. The neo-conservatives will therefore intervene to push up unemployment if they feel their inflation target is threatened." (3) " It relies on fear and insecurity to discipline the labour market and it gives play to these forces through systematically dismantling worker protections..."

    - New Zealand Herald 8 July 1995 "The haves, the have-nots and the anxious class" part one of a series by Patricia Herbert.
    In the USA, the wealthiest fifth of all households now command 48.2% of the national income, the highest share in history. Meanwhile the middle fifth's share has slumped to 18.2% and the bottom fifth's to just 4.2% - both record lows. - quoted in "The haves, the have-nots and the anxious class" by Patricia Herbert. New Zealand Herald 8 July 1995

    Privatisation of government-owned enterprises has been on the agenda of most countries over the last decade, with `downsizing' the labour force being a common effect of the privatisation process. The United Nations Conference of Trade and Development, Geneva (1993), reviewed how countries have handled the social effects of the privatisation process, particularly in creating a `safety net' from the effects of unemployment.

    Many of the countries at the conference already had socially-related support measures in place which were part of a 'social plan' related to a privatisation operation. Such support measures have included: redundancy or severance payments, voluntary early retirement schemes, retraining or vocational training, the promotion of entrepreneurship and the setting up of small businesses. In many instances, the proceeds of privatisation were tagged to pay for these measures.

  • Two examples of note : Germany has, in addition to vocational training, used early pension schemes, public work programmes and a shorter working week as part of a massive labour market policy to reduce unemployment in the newly privatised businesses in Eastern Germany. In Venezuela, their Privatisation Act ensures that at least 15% of the proceeds of privatisation be devoted to technical education and vocational training, and that 10% of the proceeds be devoted to technical innovation, industrial development and the development of small businesses.
    Source -- - Report from the "Ad-Hoc Working Group on Comparative Experiences with privatisation" United Nations Conference on Trade and Development Geneva November 1993

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