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    Selling the Strategy
    Peter McCardle talks up his plans

    from The Jobs Letter No.63 / 17 July 1997

    Employment Minister PETER McCARDLE is selling his integrated employment strategy in speeches to Councils, Chambers of Commerce, Employers and Community Groups around the country this month.
    In this special feature, The Jobs Letter presents some edited highlights from his recent speeches outlining the far-reaching changes that will be happening over the next twelve to eighteen months in the area of employment.

    The Government has quite clearly stated in its Coalition Agreement that it is economic policy that largely determines the total number of people out of work at any one time.

    All the money we have spent on over one hundred and fifty different employment programmes and schemes over the last decade has not produced the result that New Zealand Employment Policy should have sought - specifically, a reduction in the number of job seekers long-term unemployed.

    There is little or no disagreement that fundamentally it is economic policy and the economic environment that enables business to expand and prosper, providing the conditions for sustainable job growth. We need GDP growth of 2.5% to 3% per annum to provide the 20,000 new jobs needed just to absorb the natural growth in the workforce each year.

    On the other hand, what employment policy can and must do is address the length of time that individuals remain out of work, as well as influence how job seekers are viewed and treated while they are between jobs.

    Despite the plethora of employment programmes and interventions that have been developed and introduced in the last dozen or so years, there has been an undeniable explosion in the number of long-term job seekers. In 1984 approximately 12,000 job seekers of the 74,000 on the register were out of work for longer than 6 months. Six years later, that proportion had jumped by 600%, and today we have nearly 70,000 long-term job seekers in this country. There are well over 6000 job seekers who have been registered unemployed for over four years.

    All the money we have spent on over one hundred and fifty different employment programmes and schemes over the last decade has not produced the result that New Zealand Employment Policy should have sought - specifically, a reduction in the number of job seekers long-term unemployed.

    A key difference between the current and future approach can be described as the difference between "activities" and "the final outcome"; the difference between activity goals such as placing 10,000 job seekers into training, or onto Taskforce Green versus the outcome of having no job seeker being unemployed over four years.

    The activities we as a Government purchase to assist our job seekers must no longer be the end in themselves. Rather, the activities must be a means to the end; with the end result being the reduction in the number of long-term job seekers.

    Outcomes, not activities, will become the focus of our employment policy accountabilities. The success of the activities we undertake will be measured by the results we achieve in reducing long-term unemployment.

    In New Zealand we have had for many years a veritable smorgasbord of employment and training programmes that continue to flourish today. Programmes for the young who've just left school, programmes teaching people how to look for work, life-skills programmes, programmes targeting the exceptionally long-term unemployed, classroom-based programmes teaching people job-skills, and so the list goes on.

    However international studies are increasingly concluding that the most effective way to quickly assist job seekers into the workplace, and keep them there, is by way of a combination of job-search assistance together with on-the-job training and workplace support.

    In other words, get the job seeker into the workplace first; and after that provide them and their employer with any support needed to keep them in the job; which in turn enables them to move on to better jobs.

    The principles and lessons from this approach are several. It seems in the first instance that universally job seekers benefit most from help with their job search - that is, skills in how to find and get a job - especially when linked to a strong emphasis on taking any job as a first step.

    Secondly, supporting job seekers and employers, after the job seeker has been employed, with on-the-job training assistance considerably improves the job seeker's chance of keeping the job, and progressing further in the development of their job skills.

    Thirdly, such an approach significantly increases many job seekers' chances of finding and staying in work quickly, as opposed to undertaking classroom-based vocational skills training in the hope that increased formal training will eventually lead to work.

    Lastly, overseas studies of such approaches, particularly in California, highlight the fact that the combination of job search assistance and on-the-job training is a potentially lower cost intervention, with increased benefit than more resource intensive interventions such as classroom-style training and subsidised employment.

    These findings tend to confirm my own instincts from having spent many years working directly with job seekers and employers. Most employers would tell me "Give me a reliable person who has the commitment and motivation to give this job their best shot, and I will be able to teach them the specific skills of this workplace."

    I believe that the least productive of the taxpayers' investments in helping job seekers has to be the payment of around $1.3 billion to fit and able job seekers to do nothing but stay at home and lose their self-esteem, their dignity and their connection with the workforce.

    Today we have a large number of job seekers who have given up their search for work. Not only does long-term unemployment involve a loss of skills, dignity and motivation, but it involves the loss of the work ethic. It is my personal view that the work ethic is a fundamental part of human nature and human character.

    To therefore pay fit and able people to do nothing is one of the worst and most senseless things we can do to our job seekers. It is not only a social loss, but of course it is also an economic loss. It is an economic loss to the individual and it is an economic and social loss to the community.

    The Unemployment Benefit will be replaced with a Community Wage and Training Allowance. The Government proposes to turn the negative payment of the Unemployment Benefit into a positive resource for keeping job seekers connected to the workforce, viewed and treated as much like other members of the workforce as is practically possible.

    The Government's objective is to maximise the number of job seekers in appropriate part-time community work or training while they are registered unemployed and receiving income support.

    It is my view, and it is the Government's view that the best decisions about the most suitable employment assistance in each community are made within those communities.

    The commitment to involve the maximum possible number of job seekers in community work and training is a positive way to ensure that job seekers are viewed as and treated more like any other member of the paid workforce while they are unemployed.

    Contrary to the suggestion that it could be a punitive measure, this change seeks to convert what is a negative payment of the present Unemployment Benefit, which encourages fit and able people to do nothing, into a positive payment, which can be used by the job seeker to keep them connected to the workforce, contributing to their community and maintaining their motivation, dignity and skills.

    While the full-scale community work and training design is yet to be finalised, the Government sought to make clear its intent to achieving greater involvement of unemployed job seekers in constructive community work and training this year; and the Community Taskforce programme was seen as the most logical current programme available to achieve that progress. The Government looks to at least double the number of job seekers participating in this programme over the next twelve months.

    No job seeker will be financially worse off under this new policy. Cost issues associated with undertaking community work or training, where it is made available, are being considered as part of the policy development process.

    The part-time work or training must be suitable to the job seeker. No job seeker will be asked to participate in part-time community work or training that is not appropriate to their capabilities, suitable to their skills, or likely to enhance their ability to secure paid work.

    It is absolutely essential that the introduction of community work for unemployed job seekers in our communities does not see the displacement of the paid workforce and does not take work away from the private sector. In my experience, an additional means of achieving this is to involve employer and contractor representatives in the process of monitoring community work projects. There is a vast range of work to be done in our communities that would not otherwise be done, and would not be work carried out by the paid workforce. The Upper Hutt Employment Trust has employed over three years around 750 long-term job seekers in constructive community work, with no displacement, and no threat to the private sector.

    The services we have to assist job seekers with their job search, training and income support needs are proposed to be integrated. Today there are four different Services dealing with the needs of our job seekers - in fact we have more, but we have four major ones - the New Zealand Employment Service, the Unemployment Benefit resources of the Income Support Service, the Community Employment Group, and the TOP Division of the Education and Training Support Agency. The Government proposes that these agencies be integrated into a one-stop-shop, to improve the delivery of services to our unemployed job seekers.

    As Government agencies are structured at the moment, a job seeker deals with one agency for their income support requirements, they go to another agency for job search assistance, and their training assistance is provided through yet another agency.

    It is my experience and view that we need a one-stop-shop structure which ensures that our job seekers are assisted by one employment professional for all their employment and income-related needs. That employment professional must have the range of tools and skills to meet the full needs of each job seeker.

    The shift to the one-stop-shop approach is a sensible one, both from the point of view of being cost-effective, and more importantly from the point of view of ensuring that the delivery of Government employment support is done in such a way as to best meet the needs of our job seekers, not the other way around.

    The resources available to achieve the Government's employment outcomes will move from central control to regional control. New Zealand is made up of many different labour markets, with many varying needs and characteristics. The mix of services and interventions most appropriate to the needs of unemployed people should therefore largely be determined within the community and labour market in which those job seekers live.

    It is my view, and it is the Government's view that the best decisions about the most suitable employment assistance in each community are made within those communities.

    The mix of resources required to tackle unemployment in South Auckland is vastly different to the mix of resources and interventions appropriate to the needs of job seekers here in Nelson or on the East Coast, or in Canterbury.

    For this reason, centrally-controlled employment resources will be regionalised, so that the centralised, Wellington-based control we have today will be a thing of the past.

    Staff involved in the delivery of integrated services to job seekers will have the flexibility to use their resources as well as they can to produce the Government's employment outcomes in their particular labour market regions, within certain principles and guidelines.

    To ensure that the Government's outcomes of reducing the duration of unemployment and involvement of job seekers in community work and training are delivered on locally, a structure of Regional Employment Commissioners will be introduced. Recent Budget announcements mean that we intend to have Regional Employment Commissioners in place by the end of this year.

    Regional Employment Commissioners will be the best professionals available, responsible for developing and implementing regional employment plans that deliver on the two employment outcomes.

    Commissioners will be supported and advised by Regional Employment Committees - committees made up of representatives of Government & Community agencies, Local Authorities, industry and business representatives and employer and worker representatives.

    With the support of their Committee, and the professionals of the Integrated Employment Service, Regional Employment Commissioners will be accountable for the delivery of services to job seekers, a reduction in long-term unemployment and the involvement of job seekers in community work and training in their Regions.

    They will have the expertise and the resources to determine how best to achieve the Government's outcomes given the unique labour market conditions prevailing in their particular region.

    I envisage that we may well be looking at around 15 regions, but that is yet to be finalised, and as I said, those Commissioners may well be in place by the end of this year, with their supporting Committees appointed shortly afterwards.

    I am totally committed to the fact that in moving to the new approach over the next twelve to eighteen months, we must not lose the good things we have now. The work that Councils, Enterprise Agencies and other community-based employment initiatives achieve in assisting unemployed people towards employment and financial independence, is significant in the mix of employment resources available in your communities.

    Currently there is an inter-departmental steering group, headed by Alf Kirk and comprising senior representatives of the major government agencies involved in and affected by the changes, who are working on the policy development details.

    Whenever there is significant change to Government policy, there are inevitably accompanying legislative changes needed. This process, and the associated consultation will require about six months.

    This means that full implementation; that is, the entire new approach being in place and up and running, is on track to be in place by the second half of 1998.

    It is my vision that, in commencing towards the introduction of this far-reaching new approach, we could reach a stage in the future - and not too far into the future - where we have no job seekers in this country registered for longer than four years, or even better, perhaps two years.

    And in this vision we will have an unemployment register in this country that is made up of more motivated and employable job seekers whose skills are being enhanced, and whose connection to the workforce is being maintained while they are between jobs.

    Sources : Peter McCardle speeches to Nelson City Council, Tasman District Council and Kahurangi Employment Trust 15th July 1997; and speech to employers at Waipuna International Hotel Auckland 8th July 1997.

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