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    Essential Information on an Essential Issue

    Letter No.94

    5 February, 1999

    Our regular feature based on the figures for the December 98 Quarter

    Australian Jobless"Outcomes" -- long term unemployment on the rise across the Tasman.

    Unemployment in NZ is at its highest rate in five years. Statistics NZ reports that the rate in the December quarter was 7.7%, up from 7.5% (adjusted) in September, and from 6.8% a year ago. This is the highest rate since 1994, and is now higher than the unemployment rate in Australia. We include our regular Statistics That Matter feature as an insert into this edition of The Jobs Letter.

    The figures show that 144,000 people were unemployed at the end of December 5,000 higher than in September and 18,000 higher than at the same time last year.

    Statistics NZ says that the rise in unemployed is almost entirely an increase in female unemployment (up 6,000). The level of male unemployment remained relatively steady over the last quarter.

  • Unfortunately for the government which is focussing its job priorities on the long-term unemployed there are now 9,400 more long-term unemployed (over 1 year) than in December 1997.

  • Maori unemployment has also increased by 4,000 in the last quarter and now stands at 19.5%.

  • We are still unable to print any reliable figures from Work and Income NZ as to the number of people registered as unemployed, notified vacancies or the number on the various work programmes supported by the department. The last reliable figures were in January 1998.

  • Curiously, the employment statistics were released on the same day that PM Jenny Shipley gave her first election-year "vision-statement" to the Auckland Chamber of Commerce. Shipley quoted a variety of employment statistics, and said that she was "proud" that "every week since 1991, 600 NZ'ers have found new full time jobs..."

  • According to the latest statistics, NZ'ers have lost 7,000 full-time jobs in the last quarter which is over 500 full-time job losses a week and a total of 23,000 full-time job losses over the past year.

    Part-time employment however has increased by 9,000 over the quarter and 11,000 over the year.

  • Labour disputes PM Shipley's assertion that " the 80s, Labour put people on benefits ... while we've put people in jobs". It says that under National, the number of beneficiaries have certainly ballooned. Figures released last Thursday by Labour show a 75% increase in the number of sickness beneficiaries and a 61% increase in the number of invalids beneficiaries since 1991. Overall there were 387,152 beneficiaries at the end of the last financial year compared with 325,685 in 1991.
    Source _ Hot of the Press 4 February 1999 from Statistics NZ figures from HLFS for December 1998; press statements 4 February 1999 from Steve Maharey, Jim Anderton, Peter Mcardle and Statistics NZ; speech from jenny Shipley 4 February 1999 "PM - The Year Ahead" Auckland Chamber Of Commerce Carlton Hotel, Auckland 8.10am Thursday 4 February 1999

    "I am absolutely passionate about using my time as a Prime Minister to make life better for mothers, families, children, businesses, and working people in our country...

    "I want to see that people are secure in every aspect of their lives. That means the security of having a job. The security of knowing that if you work hard, you'll earn more.

    "Our economy has grown by 37% since 1991. There is a bigger cake for us all to share and less people excluded from the workforce.

    "The worst fate that can befall any citizen is to be unemployed to stand locked outside the gates of prosperity. But since 1990 unemployment has fallen from 10.9% to 7.4%.

    "You, the businesses of New Zealand, have seized the opportunity and created new jobs for New Zealanders. There are now more than 220,000 more jobs in our country than there were in 1991.

    "That's half the jobs in the Auckland region. Or more than all the jobs in Canterbury and Otago.

    "I'm proud that every week since 1991, 600 New Zealanders have found new full time jobs.

    "In the 80s, Labour put people on benefits. We're putting people in jobs ...

    "Sometimes, in the passion and urgency of fixing the New Zealand economy, we risked losing sight of the goal. It sometimes appeared as if a healthy GDP, a decent surplus, were their own rewards.

    "Of course, having a larger economy, a bigger cake to share, and paying our way are worthy aims.

    "But we must keep our eyes fixed on the real reward. The economy is about people being better off. We use prosperity to deliver the security New Zealanders demand. That is the deal ..."
    --PM Jenny Shipley "The Year Ahead" speech to the Auckland Chamber Of Commerce Carlton Hotel, Auckland 4 February 1999

    On February 1st, the law changed effecting many aspects of the welfare system. The spouses of community wage beneficiaries, and single parents with children will now be "work-tested" and could be asked to join work-for-the-dole schemes. Caregivers and partners of the sick and disabled are also among those with new obligations to seek work.

    Those with children under five years will have to attend an annual planning meeting to discuss their work goals.
    -- those with children 6-14 yrs have to seek part-time work (15 hrs) and may be liable for the work-for-the-dole scheme
    --those with children over 14 yrs must seek full-time work (30 hrs) and are also liable for the work-for-the-dole scheme
    -- parents of children aged 5-14 yrs can get a small subsidy (ranging from 70c to $1.80 and hour) for after-school and holiday childcare.

  • According to the New Zealand Herald, the government says that the change in policies will have little immediate effect on beneficiaries. This is because the "long-term unemployed" remain the government's primary target for its workfare measures. Under current government plans, only a maximum of 68,000 people (or about a quarter of eligible beneficiaries) will be asked to do "work-related activities" in the year to October 99.
    Source _ New Zealand Herald I February 1999 "Govt spreads work-for-dole net today" by Deborah Diaz

    Nearly five thousand single parent families will lose an average of $26 a week under changes to DPB and Widows Benefit which took effect at the beginning of this month.

    Before the changes, any DPB or Widows Benefit recipient moving into full time work had their benefit abated at 30 cents. From February 1st, benefits will now be abated at 70 cents, (or, for every dollar earned before tax, seventy cents will be deducted from a benefit).

  • Alliance social security spokesperson Grant Gillon has released Government papers obtained under the Official Information Act which he says show that changes to abatement rates provide a significant disincentive to take up paid work.

    He calculates that when income tax rates are included, women on the DPB and on the Widows Benefit who find part-time work will pay marginal tax rates of 92 cents in the dollar. Abatement of Accommodation Supplement and repayment of Student Loans push the effective marginal tax rates for many women in this category as high as $1.30 for every extra dollar earned.

    Gillon says that before the changes were approved, the Cabinet was informed that "an estimated 4,646 DPBs/WBs would lose, on average, $26 per week in abated benefit." The official papers reveal that the cabinet was advised by Social Welfare that "this will provide a disincentive to take up paid employment, which creates a risk of perverse employment outcomes and may compromise the Government's strategy to improve outcomes for sole parents and their families..."

    Gillon: "Back in 1996, abatement levels were reduced and the number of women receiving income from other sources increased by 19%. About 22% of women on the DPB now have other incomes, whereas 17-18% had other incomes in 1994. That says the previous policy was working. Now the Government has reversed a successful policy and penalising women for finding work..."

    Source _ Press Release from Grant Gillon and Alliance Party 31 January 1999 "5000 Widows and DPB recipients to lose $26 a week"

    NZ will not be following Australia's example in slashing the dole for those who refuse to learn to read and write. But it is certain that the Australian policy will be a controversial idea that won't go away (see Voices, in this issue).

    WINZ Minister Roger Sowry says the NZ government is not planning any similar get-tough moves. He says that WINZ already funds literacy and numeracy courses, and does not believe that a punitive approach is required. Government last year announced a $19.5m programme to ensure all nine-year-olds have skills in reading, writing and arithmetic. It also spends more than $3m a year on adult literacy programmes.

  • The Australian policy: Young unemployed people aged 18-24 who fail literacy and numeracy tests, will be forced to take remedial courses or have their dole cut.

    The penalties: The first breach will be penalised by an 18% dole cut for six months. A further breach will bring a 24% cut for another six months, and a third breach would result in total removal of the benefit for eight weeks.

  • PM Howard says the policy is an example of his "passion" about the principle of "mutual obligation" in welfare, and he says that remedial courses will improve the ability of young people to compete in a skills-hungry job market. The government estimates the new measures will potentially affect about 100,000 people between the ages of 18-24, but it has so far funded only 11,500 places a year for remedial training.

    The Howard announcement has angered many in Australia, with opponents saying it makes young people scapegoats for the failure of the education system, and that it will discriminate against non-English speakers.

  • Also on the Australian Government employment agenda for 1999: The linking of the amount of unemployment benefit to the length of a person's time in the workforce; looking again at the high abatement rates that apply when welfare beneficiaries take up paid employment; freeing small businesses from the scope of the unfair dismissals law, to make hiring new workers more attractive; bringing in age-based wage rates as a way of boosting the demand for young employees; and an inquiry into the effect of higher minimum wages on employment.
    Source _ The Dominion 2 February 1999 "Literacy-based dole cuts not for NZ, says Sowry" by Helen Bain; The Australian 29 January 1999 "Learn to read or lose dole" by Richard Mcgregor and Ian Henderson

    Literacy as an employment issue has also been pushed to the forefront of the US debate, especially after Vice President Al Gore's summit last month on "work skills for the 21st century". Thomas Dilworth of the US think-tank Employment Policies Institute argues that "functional literacy" should be on the top of the skills list needed for the next century. And it is an issue affecting the employed as much as the unemployed.

    He quotes the 1995 OECD Adult Literacy Survey which showed that 23.7% of American adults are at the lowest level of document literacy lower than the level at which one is capable of accurately completing an employment application.

    Dilworth: "Unfortunately, such drastic limitations are characteristic of 20-25% of American workers in manufacturing, agriculture, mining, construction, transportation, and hospitality industries. Their work is greatly affected. In responding to the literacy survey, workers said they're often called on to read letters or memos, consult manuals, read diagrams, deal with bills and invoices, or follow instructions for medicines or recipes. These are the same tasks the survey found many to be incapable of handling ..."

    Source _ Christian Science Monitor 25 January 1999 "Pushing up wages pushes low-skill workers out" by Thomas K. Dilworth

    Labour Market News is a small newsletter being produced by Leslie Taylor of the careers consultancy Workshape, based in Hamilton. It is available, on subscription, about 8-10 times a year and at present is sent mainly to secondary schools, tertiary institutions and other private career counsellors. The newsletter covers different economic sectors in NZ, measures their employment trends, and indicates the main training courses available that support the sector.

    Contact Leslie Taylor, Workshape, 30 Chequers Ave, Hamilton phone 07 855 8053 fax 07 855 8003 email

    Source _ Leslie Taylor of Labour Market News

    Career Question: If you knew that you could not fail at it, what job would you do?

    Source _ Adapted from Max Eggert's "The Book of Career Questions" Arrow Business Books

    Deirdre Kent, a former Director of ASH, has produced a guide to lobbying in New Zealand. "The Joy of Lobbying Campaigning to Influence Government Decisions and Public Attitudes" describes how people can grow successful campaigns and exercise their democratic rights in the process. Chapters in the book include "Curing the pain of powerlessness", "Lobbying under MMP in NZ", "Attracting media attention", and "Building Networks and Coalitions". The book also contains anecdotes from the ASH campaign, and resources such as a media fax list, a list of books, videos and websites,

    Contact Gateway Lobbyskills, PO Box 24-124, Manners St, Wellington, New Zealand phone 04-802-4640 email

    Source _ Diedre Kent flyer

    Internet Bookmark. Late last year, a new website was launched especially for NZ community groups. Community Net Aotearoa has been set up by a partnership between Internal Affairs, and several national community groups including the NZCAB, National Collective of Independent Women's Refuges, YWCA, National Kohanga Reo Trust, Maori Women's Welfare League, NZCSS, Disabled Persons' Assembly, Kupenga Maori, and the 20/20 Trust.

    Organisers say their main goal is to get online the relevant information that community groups can use. The organisers: "While there is a huge amount of information available on the internet, it can be time consuming and confusing to find what you need. In other instances, the practical information community groups need has not been on internet. Our website is a way to sort and share information and to make sure relevant information is available..."

    You can visit the website at

    Source _ communitynet aotearoa

    The NEW PLYMOUTH electorate contains 21,161 households, of which 48% have household incomes below $30,000 per year before tax. That 48% is 10% above the rate for the country as a whole. There are 30,786 adults aged 20-59 in the New Plymouth electorate, of whom 60% are in paid, full-time work. Another 14% are in part-time work. Unemployment in the electorate is just below the national average. Localities in the New Plymouth electorate which have high levels of deprivation are Waitara and Marfell. ( Electorate statistics compiled by Judy Reinken, and based on 1996 Census).
    Source _ Judy Reinken, statistics based on 1996 Census of Population and Dwellings

    reich2.jpg - 5800 Bytes Commentator Watch. Newsweek reports that Robert Reich, the former US Labor secretary who was recently hosted in NZ by the Labour Party, is now writing a book on "The Work of the Future". In the book, Reich sees signs of an exploding number of self-employed workers (up to 20% of the labor force, he figures), and in corporate employees' newfound willingness to hopscotch among jobs. Reich: "Loyalty is dead".
    Source Newsweek 1 January 1999 "Your Next Job" by Daniel McGinn and John McCormick

    China is facing a grim unemployment situation this year, with more layoffs from state firms and more young people entering the job market. The official China Daily says that almost 16 million urban residents will be unable to find work this year which is about 11% of the urban workforce. This is one of the highest levels of unemployment acknowledged by the official media.

    These figures don't include the 130 million rural unemployed who are usually ignored when official statistics were counted. If these people were taken into account, China's jobless rate would be above 17%.

    Chinese leaders fear unrest in the once-cosseted state factories which are now laying off millions of workers to cope with free-market reforms. The government already has laid off more than 10 million workers and plans to cut 6 million more jobs in 1999.

    Retired and laid-off workers frequently stage protests in major cities, sometimes blocking roads and railways, or sitting in at their places of work in protest at their employers' failure to pay them. China does not allow any trade unions or labour organisations other than those sanctioned by the Communist Party.

    Media reports from China say that, in recent months, there has been a sharp crackdown on dissent. Local governments have also been ordered to allot enough money to care for those out of work. Mo Rong, an employment expert at a think-tank under the Chinese Ministry of Labour and Social Security, has called on the government to "take significant action" to stimulate job creation. Mo urges greater reliance on labour-intensive enterprises, building small businesses and promoting development of smaller cities and towns.

    Source _ AP correspondent in Beijing, 18 January 1999

    " I believe, and most Australians would agree, that reading and writing properly are the most fundamental prerequisites of getting a job..."
    -- John Howard, Australian Prime Minister

    " Young people have a responsibility to get themselves job-ready, and to be job-ready you have to be literate. It is a case of a carrot and a stick. If you have a right to accept taxpayer support if you are out of a job, then you have a responsibility in return to do whatever you can to get a job. If people refuse to help themselves, that's where sanctions come in..."
    -- Muriel Newman, ACT NZ welfare spokeswoman

    " Getting tough doesn't solve the problem all you get is an illiterate person with no money. This smacks of the general philosophy that anyone on a benefit is a useless bludger and we'll just have to smack them harder..."
    -- Steve Maharey, Labour welfare spokesman

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