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    Essential Information on an Essential Issue

    Letter No.31

    8 January, 1996

    Auckland business leaders are meeting this month to develop a plan of action over skill shortages. This follows a survey of 5000 Auckland companies by the Auckland Business Development Board (BDB) in which 45% reported skills shortages affecting their businesses. BDB Manager Neville Collett says that the survey was conducted because industry leaders had been telling the government for months of a worsening problem, but did not have any hard supporting evidence of the skills shortages. The BDB says there was little evidence that shortages would decline in the short-term, and they fear a tighter labour market for skilled workers will hamper employment growth, inflation targets and overall economic performance.

    Although the businesses in the survey identifying skill shortages were more likely to be involved in all types of training and education initiatives, the survey found that overall participation in external training and industry training organisations was low.

  • CTU President Ken Douglas says that a national training strategy was needed now to guarantee a skilled workforce in 10 years time. he says that the BDB survey shows that the government had no viable industry training strategy, which, in his view, is because the government is relying on the voluntary participation of employers.
    Source - New Zealand Herald 29 December 1995 "Alarm grows over skill shortage in workforce" by Mathew Dearnaley
    Despite skills shortages in areas like the construction industry, the Association of Polytechnics says that a squeeze on training costs is forcing smaller polytechs to drop courses. Jim Doyle, the Association's director, predicts that the number of polytech carpentry courses around NZ will be halved in the next two years. He says that although this will save taxpayers money and demand a greater efficiency from the surviving course providers ... it will also shift costs on to students in small towns who will have to travel to the main centres for their training.

    The Polytech Association is critical of the contracting system for off-the-job training, whereby the government gives money to industry training organisations (ITOs), which then choose their training providers from polytech bids. A report by Southland Polytech CEO David Kerr describes this system as a "mock tender round". Kerr says that the ITOs were using their position as monopoly buyers to force down the cost of training. He predicts that over the next three years the government will reduce the amount of money available and "...the cost of provision will be beaten down to a bare minimum and be beyond what all but a few can provide the service for."

    Source - The Dominion 29 December 1995 "Polytech courses may bear brunt of squeeze" by Andrew Laxon
    Treasury says the unemployment rate will drop to 5% by 1998, compared to the 6.3% now. In figures released as part of Bill Birch's December economic update, Treasury expects employment growth to be at 2.6%, and says the number of jobs will pick up in the second half of 1996 as tax cuts generate more consumer spending and production.

    Treasury predicts an extra 300,000 people to join the workforce each year. About half the increase is expected to come from population growth, a third from immigration, and the rest from those presently not working. They expect the workforce participation rate to rise only 1% to 66% of the working age population.

    Source - The Dominion 14 December 1995 "Unemployment tipped to drop to 5pc by 1998"
    Economic forecasters BERL are predicting a 4.1% unemployment rate by the year 2000. Its latest Monthly Monitor says that the workforce will grow an average of 0.6% a year. BERL predicts that this growth will slow after the year 2000, as pressures on prices and the balance of payments lead to lower growth.
    Source - The Dominion 28 December 1995 "Berl predicts 4% u employment by the year 2000" by James Weir
    As many as 14,000 long-term ACC claimants could be pushed off the scheme over the next five years, after the government introduction of work tests. Cabinet papers, obtained by the Dominion under the Official Information Act, indicate that long-term claimants could be halved under the work-tests, saving the ACC about $250 million by the year 2000 or a third of what it costs them now.

    The ACC has a `tail' of about 26,000 people who have been on weekly compensation for more than a year. Graeme Speden of the Dominion reports that these people are the most expensive group for the ACC, accounting for about two-thirds of the weekly compensation bill. The Cabinet papers predict that under the new regime of work tests, about 14,000 current claimants will be forced off the scheme. While most are expected to "go back to work", a number are expected to end up on social welfare benefits or on government-funded employment schemes ... at a cost that will be much smaller than continuing the ACC payments.

    Source - The Dominion 29 December 1995 "Move to push 14,000 off ACC" by Graeme Speden
    The Education Ministry is embarking on a recruitment drive in Britain to hire up to a hundred primary teachers just weeks before the start of the school year. The shortage is most acute in Auckland and in rural areas such as Northland. The drive to fill these positions with New Zealand and Australian teachers has failed, and the Ministry says it has "scraped the barrel dry". The government has issued a hundred special two-year work permits, and a $3000 teacher relocation package that includes airfares, a week's accommodation and an induction course.

    This teacher shortage comes just a few years after teacher colleges cut their intakes because of growing teacher unemployment. NZ Educational Institute secretary Rosslyn Noonan told the Dominion that just a few years ago large numbers of teacher graduates had left the profession forever because there were no jobs for them. She says the government had erred in arguing these people would be available to teaching later, rather than finding them temporary positions and promoting to full-time as the positions became available. Noonan: "...the shortages are in part a product of leaving everything to the market's supply and demand. This was an inadequate response when a long lead-in time is involved."

    Source - The Dominion 27 December 1995 "NZ seeks teachers from Britain" by Sarah Catherall and Alan Samson
    Despite the economic recovery, redundancies are still very much a threat to large sections of the workforce. A survey by the law firm Russell McVeagh on how employers deal with redundancy shows that 52% of the surveyed organisations, and 86% of those employing more than 500 workers, laid off workers in the past two years. The survey also showed that when it comes to redundancy, workers on collective contracts (rather than individual contracts) were more likely to get better notice and compensation from redundancy, better objective tests of which staff lose their jobs, and a better consultations and discussion of the alternatives to redundancies such as relocation, redeployment or retraining.
    Source - PSA Journal, December 1995 "Union deals best on redundancy: survey."
    Charles Handy has written a new book Beyond Certainty: The Changing Worlds of Organisations (pub Hutchinson). One of his more interesting and critical observations is of a new management mantra which he sums up in the equation: "½x2x3"; half the people on the payroll, paid twice as much, and producing three times the output.
    Source - "Just the Jobs" by Bob Tyrell review of Handy book in New Statesman and Society 1 September 1995
    A new British survey of working hours shows that two thirds of British workers work 40 hours or more, with a quarter working more than 50 hours. The survey was taken by the recruitment agency Austin Knight, and polled 22 organisations with a million white collar workers. Three quarters of those people questioned said that continual long hours was affecting them physically and many said they were being made sick enough to make them stop working. According to 90% of the employees, the long hours were also reducing performance and lowering morale, and undermining any productivity gains of the extra time at work.

    The survey revealed that the longest hours were being worked by men 81% of men put in 40hr or more compared to 56% of women. And 37% of men worked 50 hrs or more compared with 13% of women. But women were by no means better off... the survey also revealed that working women were three times more likely to be divorced or separated than working men, and two thirds of women in senior posts said they worked long hours.

    Boris Johnson, writing in the Weekly Telegraph comments: "Yes, the British work harder or rather they spend longer hours at work than any other nation in Europe. But we don't see our children all day. Our eyes are strained from goggling at the visual display unit. We drink so much coffee we start getting twitchy, and some of us have apparently even taken to the ridiculous practice of `power napping' in quiet corners and even having pizza there... perhaps we should wise up to the difference between hours of work and productivity..."

    Source - The Weekly Telegraph November 1995 "Jobs agency gives `too long hours warning" and "Do we have to work these crazy hours?" by Boris Johnson.
    A survey done in 1989 revealed that 80% of Americans would sacrifice career advancement in order to spend more time with their families. Juliet Schor, author of The Overworked American (pub Harper Collins) says that we need to establish time as a value in itself independent of its price "... that it can no longer be readily substituted for money."

    Schor calculates that if the rises in real income due to better productivity were shared with workers, and if those workers took time off, rather than more money, then the average American worker could, after ten years, be working 600 fewer hours per year on a 5hr workday. In other words, they could either work 5 hrs a day, or take two months more of holidays per year, or spend a term each year in furthering their education, or take more time with their partners or families, enjoy the arts, or volunteering on community projects.

    Source - Juliet Schor, The Overworked American, as quoted in Mathew Fox, Re-inventing Work
    In France, amidst social unrest, strikes and demonstrations against proposals for welfare reform, Mr Juppe, the French Prime Minister, has announced limited measures to boost consumer spending, revive the economy and fight unemployment. The priority for action will be youth unemployment, with proposals to 250,000 jobs for young people this year. Juppe also will continue talks aimed at reducing working hours, and helping French workers in early retirement.

    It remains to be seen whether these measures will help reconcile the huge political and social divisions throughout France over economic policies, or will only be `window-dressing' that will die for the lack of real resources. Mr Juppe and President Jacques Chirac came to power last May, on an election platform calling for bold reforms to stimulate the economy and to find inventive solutions to their unemployment crisis, which, at 11.8% is one of the highest in the OECD. After the election, however, the French leaders did a jolting reverse of these proposals and instead brought in a two-year programme of belt tightening in order to shrink the government's huge deficits. Their new priority: to meet the strict monetary and budgetary requirements needed to join Europe's single currency system by 1999.

    Just before Christmas, Mr Juppe was voted extraordinary powers by the National Assembly which will enable him to legislate by decree, short-circuiting Parliament, and ensuring that new taxes to pay off the welfare systems debts can be levied from January 1st 1996.

    Source - New Zealand Herald 23 December 1995 "Mixed views of summit", New Zealand Herald 21 December 1996 "Govt goes on with reforms", and Time 11 December 1995 "Is this a crossroads or the edge of a cliff?" by Thomas Sancton
    Internet Bookmark : Green Dollars
    New Zealand and Australia have over 300 LETS the Local Employment and Trading Systems which are using their own `local' money commonly known as green dollars. These groups have a very lively national networks on both countries, with inter-group newsletters (Ozlets and the NZ Green Dollar Quarterly) and have long had a presence on the internet.

    From this Australian home page you can view articles from Ozlets newsletter, access various research projects (such as those by Mark Jackson, a visitor in recent years to many NZ green dollar groups). You can download computer software packages and manuals which will enable you to get your own local groups started. And there are links to LETS groups around the world. Check out for an overview of LETS systems, local currencies and the future of money by Michael Linton, the Canadian founder of the green dollar concept.

    The Human Rights Commission has advised that employers requiring job applicants to have a certain number of years experience for a position, may be contravening the provisions against age discrimination in the Human Rights Act. Although this advice has yet to be tested in court, it is understood that if it is formally upheld, it would apply to all job advertisements which said that experience was required.

    The Commission advice was given on the new Journalist Training Organisation rules that require journalism teachers to have at least five years experience. The organisation has altered its rules to say that five years experience is "preferred".

    Source - The Dominion 21 December 1995 "Job ads prompt warning on rights"

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