Essential Information on an Essential Issue
17 July, 1995
- AFTER THE TASKFORCE
We ask a cross-section of our subscribers to comment on the multi-party accord on employment.
- LITTLE SUPPORT FOR MULTI-PARTY AGREEMENT
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.
- CAREERS SERVICE TO BE SPLIT
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"
- SPECIAL NEEDS GRANT APPLICATIONS TREBLES SINCE 1992
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"
- LOW INCOME EXPECTED TO GO LOWER
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"
- LABOUR WOULD RATIONALISE BENEFITS AT PRE-1991 RATE
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"
- CALL FOR RE-TRAINING
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"
- ENGINEERS SUPPORT COMPANY LEVIES TO ITOS
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"
- SHORTAGE OF POTENTIAL CHIEF EXECS
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 " ...now 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.
- BOOST FOR AT RISK TEENAGERS
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"
- AN NZ'ER LOOKS AT THE `ANXIOUS CLASS' OF AMERICAN WORKERS
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
- New Zealand Herald 8 July 1995 "The haves, the have-nots and the anxious class" part one of a series by Patricia Herbert.
- RICH AND POOR IN AMERICA
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
- SOCIAL SAFETY NET
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.
- 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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