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    Essential Information on an Essential Issue

    Letter No.41

    3 July, 1996

    Training and Jobs - The Economist challenges our assumptions on just what works.

    July 1st, the day the tax cuts package and new social policy measures came into effect, many employment activists and social service agencies met in Wellington to discuss even more radical changes to the welfare state in the form of a Universal Basic Income (UBI). The idea, which is yet to be championed by any major political party in NZ, is gaining acceptance and momentum amongst grassroots welfare groups and academics, and is part of a growing international debate on the future of the welfare state.

  • The Universal Basic Income would be a state-funded payment to all NZ citizens which is paid regardless of age, gender, marital or work 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.

    Many submissions to the Employment Taskforce last year suggested that the level of the Basic Income be in the region of $120-150 a week, or around $6-8,000 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 scheme would be paid for by changes to personal and company tax rates, in addition to increased taxes on assets and energy. 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 a UBI would not result in a mass exodus from the workforce.

    Professor Rob Watts, a social policy analyst at the Royal Melbourne Institute of Technology, was the speaker at the first UBI National Conference in Wellington this week. He told Radio NZ's Kim Hill that we can no longer assume that most people of work age (16-65yrs) will have access to full-time work throughout the bulk of their working lives, and this is going to have quite an impact on our notions of citizenship in the 21st century and how income is distributed in society.

    Watts: "We now have large numbers of people who are not getting access to the Labour Market on a full-time basis in a way they would have done 20 years ago. We have destroyed the youth labour market in many of the advanced industrial countries, and we are destroying the older age group of workers of people putting together cocktails of work amongst several different jobs."

    "In an era when we can no longer have the majority of work-aged people in full-time work, we've got to stop punishing people for being unemployed, The old 'moral economy' argument that you gained decency and respect for yourself by 'working' ... is no longer relevant, sustainable or possible. This throws up a challenge to most communities to think again about how we are going to sustain people with such a reduced access to work."

  • Sue Bradford of the Auckland Unemployed Workers Rights Centre is a strong advocate of the UBI scheme. She told the New Zealand Herald that the UBI would "put an end to welfare dependency, mass unemployment and means testing. It would give people more choice and lead to a more harmonious, creative society ..."

    Source - Kim Hill Radio NZ Interview with Rob Watts 1 July 1996 and New Zealand Herald 1 July 1996 "Activists advocating basic income for all"


    Average for the year ended March (in thousands)
    YearFull TimePart TimeTotal
    Source -- Statistics NZ

    Stats: Just how are 'the employed' counted by Statistics NZ? The 'employed' figures quoted in the media are usually a combined count of both full-time and part-time workers. According to Statistics NZ, people are defined as 'employed' in their survey if they have worked for one hour or more for pay or profit, or unpaid in a family business, during the reference week of the Household Labour Force Survey.

  • How many of the jobs in this economic recovery are full-time jobs? The chart above shows the growth in part-time jobs as a significant feature of the make-up of the 'employed'. In fact, it is only this year that the total number of full-time jobs has passed the level at which it was in 1987.

  • Full-time workers are defined as those people who usually work 30 hrs or more a week, while part-time workers are defined as working between 1 and 29 hrs per week.

  • Despite the economic recovery, and the political promotions that NZ has created 200,000 new jobs since the Employment Contracts act in 1991, the numbers of men actually in full-time work has yet to reach the level of the full-time jobs that existed for men back in 1987 (when Statistics NZ started their survey). The figures (averaged for the previous year to March): In 1987 there were 848,000 men in full-time jobs, in 1996 there are 827,650 men.

  • The new part-timers are much more likely to be women than men. 36% of the 'employed' women are in part-time work, compared to 10% of men.

  • Last year, there were 94,000 part-time workers counted in the Household Labour Force survey as saying they would "prefer to work more hours", and 23,200 part-timers who were "looking for full-time work".

    Source - Statistics NZ "Labour Market booklet, plus special tables provided to The Jobs Letter.

    While NZ uses an 'internationally recognised' definition of unemployment to define who is unemployed in this country, it is worth recognising that the official term 'unemployment' has been repeatedly re-defined over the last twenty years. In Britain for example, the rules defining the term 'unemployment' have been changed thirty-two times since 1979. Thirty-one of these changes narrowed the definition of who is unemployed. According to the Guardian Weekly, The official UK unemployment figure in the early 1990s was about 3 million people. Under the 1979 rules, this would be 4 million people.

    Source - The Guardian Weekly 28 Feb 1994 p4, as quoted in "The Doubters Companion" by John Ralston Saul

    Jocelyn Gibson of the Centre for Labour and Trade Union Studies, at Waikato University, writes : " Equal pay legislation has only ever provided for equal pay for equal work, ie. the same job. There are many ways employers can avoid paying men and women the same rate, such as defining their jobs differently. Also, equal pay legislation doesn't take account of the segregation of men and women into different jobs - so when the Equal Pay Act was introduced in 1972, those women employed in women-only occupations made no gains, whereas women in occupations where a men's pay rate existed received a pay increase. The Employment Contracts Act also makes equal pay even more difficult to enforce as pay rates are individualised...."

  • Gill Ellis, organisational consultant, and co-author of "Women Managers: Success on their Own Terms", comments on the EEO debate : " If EEO is designed to deal with inequity, then we are failing. The work we are doing in organisations is actually for the privileged few who have got jobs. That is not to say that we should stop doing what we are doing. But, in the long run, if it is equity issues we are concerned about, we should be addressing employment per se..."

    Ellis: "I know that some of our push for flexible work, and the sharing of jobs is helping that. But, underlying all the problems is our own desire for material wealth, consumer goods, and a salary that gives us a lifestyle we want. In other words, we are not prepared to give up what we need for there to be enough jobs to go around."

    "The key target group that is suffering inequity in employment in our society at the moment is the unemployed. The other large disadvantaged group in the community are care-givers -- of the aged, disabled, and so on. And you could probably add the employed poor to this shortlist -- those below the poverty line on low wages." Ellis points out that one of the problems of EEO, as currently constructed, is that it operates only within organisations, and doesn't encompass key groups outside the mainstream ... such as the unemployed.

    see also Jobs Letter No.39

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