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    Essential Information on an Essential Issue

    Letter No.36

    1 April, 1996

    The Reserve Bank predicts that the unemployment rate, now at 6.1%, will rise to 6.9% and remain there over the next two years. In its latest economic forecast statement, the bank says that the increase in unemployment will come not from redundancies, but "... from the economy's failure to create enough jobs to absorb the growing working age population."
    Source - New Zealand Herald 22 March 1996 "Gloomy Brash keeps the brakes on."

    Five years of export-led growth has come to an end according to the Auckland Manufacturers Association chief executive Bruce Goldsworthy. As reported in the last Jobs Letter, the Association's recent survey of business conditions showed more than half the respondents bracing themselves for declining profits and more job cuts. Goldsworthy attributes the fall-off in export sales to the rising NZ dollar, the `softness' of the Australian economy and a fall off in international prices for manufactured goods. Auckland export sales are 18% lower than last year and nearly half of those responding to the Association survey stated they had reduced staff numbers. In the next three to six months 3% expect to increase staff, 80% expect to staffing to remain the same, and 13% intend to shed staff.

    Statistics NZ reports that export levels have fallen 8.2% in the year to February, as compared to the year ending Feb 1995. At the same time, imports have risen by 6.6%. The deficit for the period was $860 million, contrasted to a surplus of $507 for the year before.

    Sources - New Zealand Herald 27 March 1996 "Trade Surplus down as exports fall 8.2%" and "Manufacturers' export sales drop.

    The Engineers Union says that at least 600 workers in the car manufacturing industry would be out of work next year unless the government can be persuaded to retain tariffs on imported cars. Ford and Mazda said last week that they expected to close their car assembly plant in Wiri, Auckland, unless there was a shift in government policy. Tariffs on imports were dropping 2.5% each year and are expected to be completely removed by 2010. This was leading to the increased importation of new and used vehicles, and threatening the viability of local assembly plants. The union is joining with the car-makers to try and convince government to retain the tariffs, or to slow down their removal.
    Source - The Dominion 20 March 1996 "Falling tariffs may cost 600 jobs, says union"

    There is a national shortage of veterinarians which is putting stress on existing services and forcing some clinics to look to South Africa and Australia for staff. The shortage could become a crisis if the expected busy spring eventuates, and if the dairy boom continues. But, according to the Veterinary Association, there is also a pool of up to 140 overseas-trained vets in NZ, who were either on the dole or working in lower-skilled jobs because their qualifications as vets were not fully recognised here. Association president Dr Catherine Smith says that the immigrant vets had been mistakenly led to believe that their qualifications would have equivalence in NZ, when in fact they would have to complete the full NZ university course.

    Up to 500 overseas-trained medical practitioners are also claiming unemployment benefits or are working in other professions because they too had migrated on the false impressions that their qualifications entitled them to work. According to Alison Tocker of the Dominion, most of these doctors found they could not work without sitting a Medical Council exam that most of them failed to pass the first time.

    Source - The Dominion 26 March 1996 "Qualification conflict cited in vet shortage".

    Question: Shouldn't the NZ Qualifications Authority under its new `framework' be helping overseas-trained vets and doctors get recognition of their prior learning and experience?

    The pilot fully-funded work scheme Job Connection announced in the Government's response to the Employment Task Force is to get started in Gisborne, Whangarei, Invercargill, Lower Hutt and North Taranaki. The scheme restricted to 100 people nationwide and is only for people who have been out-of-work for more than four years.
    Source - The Daily News 26 March 1996 " NP in trial scheme to help long-term jobless.

    A survey of wage rates since the introduction of the Employment Contracts Act by the Institute of Economic Research shows that 43.5% of employers reported either lower or unchanged ordinary time wage rates since 1991. Overtime rates had been cut by 42.6% of employers and similar numbers had frozen rates. Allowances and other penal rates had been reduced by 40% of employers and frozen by another 44% of employers.

    CTU President Ken Douglas comments: " This is an incredible five-year wage freeze applied by nearly half of all employers, despite a prolonged economic expansion and high levels of profit growth..."

    Source - The Dominion 22 March 1996 "CTU blames Contracts Act for shrinking wages, benefits."

    Women's wages. Figures from the Ministry of Women's Affairs show that more women are entering the paid workforce. Since 1991 an additional 60,000 women have entered full-time jobs, and 31,000 women have taken up part-time work. But while more women are working, their wages continue to fall behind the wages of men. In the last year there has been a 5% increase in the gap between the average pay of men and women. A year ago, men earned on average $178.65 per week more than women. The latest figures show the gap to be $188.85.
    Source - Socialist Worker 18 March 1996 "The worth of women's work"

    A complete reform of the welfare system in NZ is advocated in a controversial new book From Welfare State to Civil Society: Towards Welfare that Works in NZ. The book, which has been published with the support of the Business Roundtable, is by Dr David Green of the London Institute of Economic Affairs, and contains a new blueprint for the future of state welfare in this country. Green says that present welfare policies were failing those they were designed to serve and perpetuating more problems than they solved. He says it is no longer valid to tolerate "manipulations of the benefit system", and he suggests that the onus of a new regime should be pushed back onto the individual, and that community organisations should provide more welfare services.

    Among the book's proposals is a policy to encourage unmarried mothers to live with their parents or in supervised accommodation "...preferably provided by voluntary associations that will take responsibility for bringing out the best in the mother and baby."

    The book has already come under criticism from welfare groups. While welcoming the discussion of social policy that this book will generate, the Council of Social Services' David Robinson says that to be effective, social policy needs to be developed in consultation with all relevant community groups. He says that Dr Green had ignored attempts by the Council to discuss this book while it was being researched. Voluntary Welfare Organisation executive director Ross Grantham says that community groups were "sick of being told they ought to pick up the pieces of growing social distress, while government policies made it harder for them and their clients to survive..."

    Source - The Dominion 26 March 1996 "Volunteers and homeless agree welfare debate needed" and New Zealand Herald 25 March 1996 "Book proposes welfare restructure"

    The Business Roundtable has also released a paper of its own called Moving into the Fast Lane, which is essentially its own "vision statement" for NZ. Its prescription includes amendments to the Employment Contracts Act to remove personal grievance "anomalies", reform of holidays legislation, a greater focus on education and training, and a radical downsizing of the welfare state.

    It also says that superannuitants are paid too much and should have to wait until they are 70 to qualify; domestic purposes beneficiaries should get their money from the non-custodial parent where possible and lose the benefit when their children pass aged 12; the unemployment, sickness and invalid benefits should be replaced with insurance or an income-contingent repayable loan scheme; in the meantime. the unemployed should have their dole axed after six months and be enrolled into training programmes; sickness and invalids beneficiaries need better vetting, and the minimum wage should be abolished so many of the unemployed can price themselves into jobs.

    Source - The Independent 22 March 1996 "Mini State Maxi Society. The Roundtable moves into the fast lane."

    Since last September, Income Support has been toughening up its checks on the medical condition of sickness and invalid beneficiaries, in order to encourage them back into work. But, as Mike Booker reports in the Independent, the effects of the tougher line does not seem to be having the financial impact that Social Welfare Minister Peter Gresham was hoping for. According to Booker, although fewer people are applying to get on the benefits and "hundreds" have been booted off the benefits, the department is "not on target" to reduce its costs by $8.8 million in this financial year. Booker reports that 5.8% or one in twenty work-age NZ'ers are not fit for work. Since the mid 1970s, invalid and sickness benefit numbers have risen more than 300% despite no significant changes in eligibility criteria.

    The figures: At the end of January 1996, nearly 103,000 NZers were either on the invalid and sickness benefits, or on ACC. There are 41,000 on invalid benefit (paid to those permanently out of the workforce), 33,000 on the sickness benefit (paid to those with temporary incapacitation), and 29,000 on ACC (paid 80% of their income as an earnings-related compensation for the loss of ability to work as the result of an accident).

    Booker says there is a financial incentive for anyone out of work to go on sickness and invalid benefits rather than the dole. For example, a 25-yr old single person on the invalids benefit receives $173 a week, compared to $144 on the sickness benefit and $138 on the dole. He believes that `malingerers' have a more comfortable existence on the sickness and invalids benefits because "...they will not be called upon to do training or apply for a job."

    Source - The Independent 15 March 1996 "Malingering The Kiwi malaise"

    A comprehensive guide to seasonal work in NZ has just been published by brother-and-sister travellers Gary and Heidi Andrews. The book gives a wealth of advice and background information on the estimated 40,000 seasonal jobs available from Kerikeri to the Bluff in sheep shearing, market gardening, orchards, vineyards, skiing and tourism work. It is designed as a practical on-hand work guide with tips on how to get the work, useful contacts and addresses, regional labour demands, payrates, transport and accommodation, plus detailed maps and seasonal work charts included. This book will no doubt become a standard purchase for people visiting this country on short-term working holidays (see next item), but also for a growing number of people who are making seasonal work their full-time livelihood.
    Seasonal Work in New Zealand by G and H Andrews, available from Andrews Publishing P.O.Box 8052, New Plymouth.

    Backpackers lobby groups are pushing for the government to change its restrictions on working visitors, saying that NZ could be missing out on a multi-million dollar backpacker windfall because of the current visa system. Current rules allow fewer than 4% of the country's annual intake of 73,000 backpackers to work legally. The Backpackers Accommodation Council says that the government should follow the Australian example of issuing more working visas with the anticipation that the travellers will spend most of their money here in NZ anyway.

    This year, Australia will issue a maximum of 38,000 one-year working holiday visas. These visas include a clause banning people from working for longer than three months in any one place as a way to safe-guard native Australians long-term job prospects. A recent Australian survey of working holidaymakers showed that the backpackers on these visas were staying longer and spending as much as $15,000 per person on their stay in Australia. In comparison, NZ Tourism Board figures show that our backpackers were staying for an average of 46 days, and spending only $2,700 each.

    Campbell Shepherd of the Backpackers Council dismisses suggestions that changing NZ visa regulations would take jobs away from NZers. Shepherd told Sunday Star-Times: " They want the jobs that Kiwis don't. You ask the fruit-growers... The feedback I get from travellers is if they could work here rather than Australia, they would..."

    Source - Sunday Star-Times 11 February 1996 " Backpacker `windfall' lost to NZ."

    Throughout the US last month, General Motors plants were at a standstill as 65,000 GM workers went on strike. Their strike was not so much about their present wages or conditions, but about the future of their work. The source of their dispute: the continuing use of cheaper outside contractors or "outsourcing" to make car components presently made within the GM plants.

    The GM company pleads that it is no longer competitive, and it is trying to save on labour costs compared to other US manufacturers who use much more outsourcing. Figures show GM makes only $413 profit on every vehicle it sells, compared to Chrysler making $2,200 per vehicle.

    Seventy percent of a GM motor vehicle is made by GM workers making $40/hr (including benefits). Only thirty percent is sent to outside contractors. A Chrysler vehicle shows almost the reverse picture with its $40/hr workers only making thirty percent of the vehicle, while the remaining seventy percent of the vehicle is sent out to outside contractors making half as much wages, or less.

    Source - ABC News 12 March 1996 lead story

    The Rebirth Referral Service (RRS) offers a unique facility for people in the workforce who are worried about their job prospects after their next re-incarnation. The Service offers a solution to the age-old dilemma : What chance does a returning soul have of landing a great paying job ? The RRS makes returning to the physical world much easier. Chief Executive Officer Michele Flack says that they can guarantee that their clients can come back and move into a decent job, at a good salary, without having to "start at the bottom" for yet another lifetime. The client signs up with the service and pays a one-time fee. When the client dies, the RRS contracts a team of Tibetan lamas to track the client to their next reincarnation. Once their location has been found, the client will be directed to an employer that has already been pre-approved.

    Flack: " How many times have you worked part-time odd jobs at a low wage? Maybe you were an assistant goat-herder in Greece, a limestone quarry clean-up boy in Egypt, a pot-washer in medieval Europe, or a stall mucker in the wild West. If you're like most folks, you won't care to go through that again. Now you can start out in your next life in a comfortable position..."

    Rebirth Referral Service phone 0800-555-679. Jobsletter subscribers are advised to check the date of this issue before making direct contact.

    Source - based on a clipping sent to the Jobs Letter by Michael Fleck
    "The result of Moving into the Fast Lane] would be a government taxing less, spending less, owing less and providing less a bit player in a society where the real decisions are made in the comfortable homes and boardrooms of a wealthy "civil society" able to look after itself pretty well, thank you very much, while retaining a safety net for those who really can't look after themselves..."
    The Independent columnist Steve Evans, commenting on the Business Roundtable's `vision statement' for NZ.

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