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    Essential Information on an Essential Issue

    Letter No.59

    5 May, 1997

    The Questions for Consultation : Peter McCardle's Employment Strategy

    With the Coalition government signalling huge changes to employment and training policy and services, it is embarking on a short and focussed consultation process over the details of its changes.

    The government has established an "Officials Steering Group" which will be independently chaired by Alf Kirk. This committee is charged with the policy design and implementation strategy of the new services -- specifically on the regional delivery mechanisms, the development of community work and training options, and the community wage and training allowance (which will replace the unemployment benefit).

  • This Steering Group is working on a tight timeframe for the consultation because it is required to offer its advice to the Ministers by the end of July. They are asking for written submissions to be received on a list of specific questions ... no later than 23 May 1997. A request has gone out to a network of community trusts, Maori organisations and interested government agencies to participate in this consultation process.

    The Steering Group is only considering written submissions, and will not be replying to them. They are hoping that various nationwide organisations that have regional and/or constituent parts will concentrate their input through their national bodies.

    The Steering Group says it is also taking into consideration the submissions already received by the 1994 Prime Ministerial Task Force on Employment ... a consultation exercise in which the NZ First Party did not participate.

  • We list the questions for consultation on the Employment Strategy in this issue of this Jobs Letter. If you wish to participate in the consultation, send your responses to: The Employment Implementation Steering Group, P.O.Box 1115, Wellington, by 23 May 1997.
    Source -- letter to the Jobs Research Trust from Employment Implementation Steering Group chairman Alf Kirk 24 April 1997

    Employment Minister Peter McCardle is not pretending that his new employment strategies will solve unemployment. He maintains that it is "... economic policy, not employment policy that largely determines the numbers of people out of work". But he fervently believes that his new policies can influence how long a person is out of work and "... how readily they are able to keep themselves connected to the workforce, motivated and skilled while they are between jobs." Consequently, McCardle says that the success of the activities undertaken in the new Employment Strategy will be measured by the results achieved in reducing the duration of unemployment.

  • A key difference in McCardle's approach will be found in what he calls the difference between 'activities' and 'outcomes', a familiar distinction in the 90s culture of government social services. McCardle: "The activities that government purchase to assist unemployed job seekers must no longer be the end in themselves. Rather, the activities must be a means to the end with the ultimate outcome being the reduction in the percentage of long-term job-seekers..." His example: Instead of the government purchasing an activity goal (such as placing 10,000 job seekers into training, or onto Taskforce Green) ... it will purchase an outcome (for example, having no job seekers unemployed over two years).
    Source -- Memo from Minister of Employment, April 1997

    What happens to the Community Employment Group (CEG) programmes under the re-structuring towards an Integrated Employment Service? CEG is already on a strategy of 'exiting' from its funding commitments to its programmes such as Mainstreets, Be Your Own Boss business courses, the Mature Employment Services, and Business Grow ... and contracted groups are receiving steadily reducing funds. It was hoped that other government departments and agencies (Commerce, NZES, CFA, ETSA etc) were to look at picking up the funding of these popular programmes, but so far, no concrete commitments have emerged.

    There are rumours circulating within government agencies, however, that the Be Your Own Boss programme -- and its $3.8m funding -- will survive into the new Integrated Employment Service.

    Source -- confidential conversations between Labour Dept staff and Jobs Letter Editor Vivian Hutchinson

    Job training schemes involving the Army are being expanded to cater for a further 1,300 recruits. The Limited Service Volunteer Scheme has an annual budget of about $1.4m, and provides Army-style life skills to long-term unemployed and disadvantaged young people. It will be boosted from its present 720 places based at Christchurch's Burnham Camp, to a maximum of 2,000 places a year at both Burnham and the Waiouru camps. Minister of Defence, Paul East, told parliament last week that the schemes were "a high priority" for the coalition government.
    Source -- New Zealand Herald 23 April 1997 "Army work schemes to get step up" by Warren Gamble

    Meanwhile, Social Welfare Minister Roger Sowry has told parliament that axing people's welfare benefits quickly if they failed work tests would "encourage people to take advantage of employment and other opportunities available to them, and help them share in the economic recovery ..."

    Sowry was speaking to the introduction of the Social Security Amendment Bill which proposes that Social Welfare be allowed to cut people's benefits with five day's notice, instead of the present nine days. The bill was referred to a select committee.

    Source -- The Dominion 25 April 1997 "Sowry backs five-day notice for beneficiaries" by Helen Bain

    Widespread job losses are expected in the fishing industry after a high Court decision backing government plans to cut the snapper quota in the northern region by 40%. The annual commercial snapper catch is to be reduced from 5,000 tonnes to 3,000 tonnes in order to ensure the survival of the snapper fishery. This will cost the industry about $300m a year and lead to job losses, particularly in smaller northern communities. Sir Graham Latimer, chairman of the Maori Council and of Moana Pacific Fisheries, says that the 'savage' quota cut "...will destroy the livelihood of many commercial fisheries -- both Maori and Pakeha -- and the loss of local revenue will place further burdens on many regional towns."
    Source -- The Dominion 28 April 1997 "Jobs at risk after snapper quota cut" by NZPA.

    Hundreds of job losses at Telecom appear imminent as restructuring plans start to progress. Telecom Design Build and Maintenance division (which takes care of the Telecom network) has begun competing with outside contractors for Telecom work, and the services division has introduced a "sinking lid" policy. The New Zealand Herald reports that rumours of up to 3,000 overall Telecom job cuts, while being denied by Telecom, are being taken seriously elsewhere in the industry.
    Sources -- New Zealand Herald 26 April 1997 "Telecom workers expect jobs to go" by Mathew Dearnaley; and National Business Review 24 April 1997 "Telecom job losses up as restructuring bites" by Richard

    The announcement that Lion Breweries will close what itself calls a "profitable and efficient" brewery in Hastings has angered local Mayor Jeremy Dwyer. He criticises it as a corporate decision simply so Lion could make "more money". Dwyer says the Hastings Brewery was a well-run plant with loyal staff, but because Lion could make even more money by shifting operations to Auckland, 52 workers were to lose their jobs. An angry Dwyer asks if NZ'ers really wanted to continue this drive towards a "dollar-driven corporate bloody world ..."
    Source -- The Dominion 26 April 1997 "Mayor angry at brewery closure" by Philip Kitchin.

    The Post-Primary Teachers Association is predicting an increasing teacher shortage crisis over the next decade which will see up to 80,000 more students in secondary schools. PPTA president Martin Cooney says his worst-case scenario is for a shortage of 900 secondary teachers next year, rising to more than 3,000 teachers by the year 2000.

    The PPTA has released a discussion document entitled Meeting the Challenge of Growth: The Emerging Crisis in our Secondary Schools.

    Source -- The Daily News 26 April 1997 "Union predicts huge shortage of teachers" by NZPA

    About 10% of this year's graduates of NZ universities have yet to find work, four months after they completed their studies. The NZ Vice Chancellors Committee reports that this is slightly better than for the same time last year when 12% of graduates were still looking for work.

    The Committee's "still looking" figures for this time last year give us an interesting overview of the university graduate job market. The highest jobless graduates at April last year were consumer and applied science graduates at 22%, followed by law graduates at 20%, computer science 18.1%, humanities 16.8%, architecture 16.2%, biological sciences 14.8%, physical science 14.2%, social science 13.7%, commerce 13.1%, engineering 11.2%, technology 9.5%, veterinary science 8.7%, education 8.4% and medicine 3.3%.

    Source -- Sunday Star-Times 27 April 1997 "10% of graduates yet to find work" by Daniel Riordan

  • Chris Mitchell, strategic development manager with Tradenz, believes that too many graduates are destined to find jobs in the traditional professions of law and accountancy, rather than becoming the engineers and technologists needed to drive our export-led economy. He points out that NZ is one of the few OECD countries that produces more lawyers than engineers. Last year our universities graduated 850 lawyers compared with 530 engineers.

  • According to OECD figures quoted in the Sunday Star-Times, Denmark and Finland turn out five times as many engineers as lawyers, Norway four times as many, and Canada and Australia twice as many. Journalist Daniel Riordan comments: "It is a problem that will persist until society affords as much prestige to the wealth generators as it does to the wealth servicers ..."
    Source -- Sunday Star-Times 27 April 1997 "10% of graduates yet to find work" by Daniel Riordan

    In America, graduates from university are facing their best job market in a decade, with the National Association of Colleges and Employers saying that employers plan to hire 17% more new college graduates this year.
    Source -- Chicago Tribune 28 April 1997 "Job Market Beckons Seniors" by AP

    But Gary Johnson of US research group BraveNewWorkWorld says that the job market isn't equally sweet for all graduates. Johnson: "The new world economy has become far more performance-oriented and far less credentials-oriented. Graduating with a degree isn't enough. You actually have to be able to do something that employers want done and are willing to pay well for ..." Johnson says that graduates can't expect to be paid well for simply being well-educated "any more than for simply being a nice person ..."

    Source -- New Work News 28 April 1997 by Gary Johnson "Good Spring for New Graduates" available from BraveNewWorkWorld at

    Employers have long complained that university students -- whether they study the sciences or engineering, or the arts -- are poorly prepared for the workplace. Some recent research by the Collegiate Employment Research Institute (CERI) at Michigan State University has tried to discover if employers really have legitimate complaints.

    The CERI researchers have measured the skills and performance of new college graduates and asked employers to observe their new hires on the job and compare the requirements of entry-level positions to actual work performance.

    The employers reported that graduates were inadequately prepared in goal setting, handling conflict and criticism, and understanding workplace values and ethics. The graduates were also not well prepared to write project proposals or negotiate the explicit and implicit organisational systems.

    Philip Gardner, CERI research director, says: "Many of the skills you need to succeed in the workplace aren't taught in the classroom. That means you may have to strengthen certain skills on your own. Participation in co­ops and internships and involvement in extracurricular activities and organisations promote some of the "relational" skills -- time management, goal setting, resolving conflict, understanding workplace values, leadership and interpersonal skills, and critical thinking -- that employers want... "

    Source -- "Ready for Your First Job? Employers Rate the Work Force Readiness of New Grads" by Philip D. Gardner and Wen-Ying Liu, Spring 1997 Journal of Career Planning & Employment.

    Philip D. Gardner is research director of the Collegiate Employment Research Institute at Michigan State University, and Wen-Ying Liu is graduate research assistant with the Collegiate Employment Research Institute at Michigan State University.

    Specific on-the-job problem areas for technical graduates (engineering, computer science, accounting, for example) include:

  • Locating, differentiating, and summarising information for research-based papers and reports.
  • Composing and drafting written material in the form of letters, memos, and reports/proposals.
  • Making oral presentations and giving instructions, recognising verbal and non-verbal cues, and being willing to participate in discussion.
  • Thinking abstractly and contextually.
  • Acting interpersonally: new hires were not able to work in team situations, accept leadership roles, or handle conflict or criticism.
  • Establishing work-related priorities and setting goals. Understanding workplace values and adapting to the dynamics of the organisation.
  • Specific on-the-job problem areas for non-technical graduates hires (general business, social sciences, communications, etc.) include:

  • Thinking abstractly and in context.
  • Using interpersonal skills, including handling conflict and criticism.
  • Establishing priorities, setting goals, and meeting deadlines.
  • Understanding workplace values, negotiating through the system, and demonstrating sound work habits.
  • Source -- Philip D. Gardner and Wen-Ying Liu, Collegiate Employment Research Institute at Michigan State University in the Spring 1997 Journal of Career Planning & Employment ,

    Auckland law lecturer and best-selling author Jane Kelsey believes that the neo-liberal economic tide is beginning to turn in NZ, as claims for its successes are proving untenable. She has re-released her 1995 book The New Zealand Experiment with an epilogue which she says is written in a more optimistic vein.

    Kelsey: "There are grounds for optimism that we can move forward from here. People are emerging from the paralysis induced by the blitzkrieg of the past 12 years and realise that neo-liberalism is not "economic truth", nor is it immutable."

    Kelsey's overview of employment indicators in NZ, however, continues to paint a bleak picture : "With officials defining the 'natural rate' of unemployment as around 6%, the unemployment situation is not predicted to improve, and is likely to get significantly worse. Employment growth declined during 1996, as the export and import-competing sectors moved toward recession and a number of major employers shifted offshore."

    "The quality of employment has also declined. By August 1996, there were still 28,100 fewer full-time jobs -- but 193,500 more part-time filled jobs -- than in February 1987, when labour force surveys began. Labour productivity growth has averaged only 0.7% under the Employment Contracts Act, compared to a long-run rate of 1.3% before the act was introduced; and labour productivity fell by around 1.6% in 1995-1996. "
    The New Zealand Experiment by Jane Kelsey is published by Auckland University Press (39.95).

    Source -- Sunday Star-Times 27 April 1997 "For Richer or Poorer" by Jane Kelsey

    In Britain, doubt is being cast on the integrity of the UK unemployment statistics after the Guardian revealed widespread falsification of job placement figures, and Jobcentre staff identified their own offices as involved in routine fiddling the numbers. Hundreds of thousands of jobs supposedly found for the unemployed by the government Employment Service were in fact "created" by fiddled figures, phantom placement scams and double-counting at Jobcentres across the country.

    UK Employment Service staff and union officials say that pressure to hit targets has led to widespread breaches of the rules and bogus job placements estimated between 10-30% of the total figure. Paul Convery, director of the Unemployment Unit (an independent lobby group) describes the scams as "target culture gone mad". Convery: "Jobcentres are being forced to put their efforts into creating imaginary figures to hit their targets, rather than helping the unemployed back into work ..."

    How did they do it? The Guardian reports a variety of methods were used to boost the numbers recorded as having been found work. One was to register a placing after an individual has simply inquired after a vacancy. Another was to enter all the names of workers taken on by particular local firms as having been found work through the Jobcentre.

    Source -- The Guardian Weekly 27 April 1997 "Scandal mars Tory delight over jobs" by Richard Thomas, Larry Elliot and Seumas Milne.

    As with the Beyond Poverty conference last month in NZ providing an alternative voice to the Beyond Dependency conference being held at the Auckland Sheraton, last week's star-studded Volunteer Summit in Philadelphia also saw an alternative 'People's Summit' which was called to protest the longer-term effects of welfare cuts, and the lack of effective job creation programmes.

    One of the key speakers at the alternative summit was Philadelphia Mayor Ed Rendell. He had earlier addressed the presidents' summit at Independence Hall. Rendell: "As mayor of the host city, I got to speak at the summit, and I told them that I endorsed some of the goals of the summit...because I think there is a place for volunteerism. But I also told them that unless we do something about poverty and jobs for people, that this city and every other city is in trouble, and trouble that all the volunteers in the world won't fix,".

    Rendell said cuts in government welfare programs, passed last year, would increase the number of job seekers in Philadelphia by between 40,000 and 70,000 by the year 2000. This is on top of 48,000 now looking for work and numerous others who have given up. Rendell told protesters to urge Congress to pass a "meaningful" jobs bill to help absorb people being cut off welfare.

    Source -- Reuters 28 April 1997 "People's Summit Protests Welfare Cuts"

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