Essential Information on an Essential Issue
14 May, 1999
Our regular feature based on the figures for the March 1999 quarter.
- DROP IN UNEMPLOYMENT
The unemployment rate has dropped sharply to 7.2% in the March quarter from
7.7% last December. The rate has returned to where it was a year ago. There are now 135,000
people officially unemployed in March compared to 143,000 in December. We include our regular
Statistics That Matter feature in this issue of
The Jobs Letter.
- The drop in numbers of unemployed people has been far larger than what economists
were expecting. While government politicians have been celebrating the figures as a sign of a
robust economic recovery ... economists are more cautious, saying the figures probably overstate
the strength of the labour market. Their reasons: the increase in employment is not
broadly-based, since it is concentrated in the primary sector (mainly forestry) and services, while employment
in manufacturing for example continues to decline.
- The drop in the unemployment figures has been driven by a 10% decrease in female
unemployment, although Statistics NZ says this is the most "volatile" figure in their
seasonally-adjusted statistics which make it difficult to get a true picture. Social Services Minister Roger Sowry
says the figures reflect the numbers of women leaving the Domestic Purposes Benefit, which fell
by 4,000 in the first three months of this year.
- Most of the new employment is in part-time jobs which are up 2.9% or 12,000 people in
the quarter compared to rise in full-time employment of 0.4% or 5,000 people. The
(seasonally-adjusted) annual figures however show that part-time employment increased by 30,000,
while full-time employment fell by 19,000.
- There is also a drop in the number of people outside the labour force, resulting in a
0.3% increase in the participation rate to 65.4%.
- There has been a significant drop in the employment levels of young people aged
15-19 years. The employment level of this group has dropped by 11,900 people or -9.4% compared
to the same time last year.
- There were no significant annual or quarterly changes in the level of unemployment
by ethnic group. The unemployment figures in March include 85,200 European/Pakeha,
32,000 Maori, 12,400 Pacific Island people and 12,100 `other' people.
- Treasurer Bill Birch says the reduction in unemployment confirms for him the rapid
turnaround in the NZ economy after last year's recession. Birch: "The result yet again shows the
very close relationship between growth and jobs. The rapid improvement in unemployment also
points to the benefits of a flexible labour market which has ensured that economic growth is
quickly translated into jobs..."
- Labour's Steve Maharey is not as sure about the quality of jobs generated in this
recovery. He says the big rise in part-time work does not provide people with a living or represent
a strengthening economy. Maharey: "There is no evidence of an increase in the kind of
wealth-generating jobs that can return NZ'ers to long-term prosperity..."
CTU economist Peter Harris agrees: "The net effect of the slump and the recovery of the past
12 months is that 19,000 full-time jobs have gone, to be replaced by 30,000 part-time jobs."
- Green Party leader Rod Donald says young people are bearing too much of the brunt
of government economic policies. Donald: "The latest statistics expose a time bomb waiting to
go off. Jobs are disappearing under National's economic policies and most of them are being
taken from our young people. This inevitably leads to a climate of hopelessness and despair for many
of our youth who see no prospect of ever getting a real job. No amount of make-work schemes
or training courses can make up for the fact that employers, particularly in the manufacturing
sector, are being squeezed by imported goods made with cheap labour..."
Source _ Statistics from Statistics NZ, The Dominion 7 May 1999 "Unemployment drops sharply". The Daily News 7
May 1999 "Drop in jobless attributed to part-timers"; New Zealand Herald 7 May 1999 "Economists do not take data as gospel"
; press release from the Green Party "Young people hit hard in the job market" by Rod Donald
- OLYMPIC JOBS
Sydney will not have nearly enough local workers to fill all the job vacancies that will
be created by the year 2000 Olympics. Games workforce general manager Ian Clubb anticipates
New South Wales will be 20,000 workers short for the games. Clubb says NZ is a likely source
of labour to fill a significant portion of these because NZ'ers do not require work permits.
Others workers will come from other Australian states and from Asia.
Source New Zealand Herald 5 May 1999 "Jobs going for NZ at Olympics"
- TE PUNI KOKIRI REPORT ON LABOUR DEPARTMENT
Te Puni Kokiri has issued a report into how the Labour Department deals with Maori
job-seekers more than six months after Work and Income NZ took over the Labour
department's role. The report was delayed because it was asked for at a time when NZ Employment srvice
was amalgamating with Income Support to become WINZ. Te Puni Kokiri chief executive
Ngatata Love says the report shows that there are processes within the employment agencies that
still need improvement in particular, the need to prove that their work was getting Maori into jobs.
- Labour secretary John Chetwin says that the transfer of employment functions to WINZ
has given his department "the opportunity" to focus on its capability in relation to Maori issues.
The report notes that the majority of the department's Maori staff worked within the
employment sections such as NZES and the Community Employment Group and have subsequently moved
Source _ The Dominion 5 May 1999 "Delay in report on Maori `unfortunate'"
- WALLY STONE ON TOURISM BOARD
Wally Stone is the latest government appointee to the Tourism Board, a political
choice which The Dominion describes as "... recognising him as one of the country's outstanding
entrepreneurial businessmen." Stone has been a developer and director of the Ngai
Tahu-based Kaikoura Whale Watch tourism venture. He has also been active in employment-related
projects since he joined the Internal Affairs SCOPE (Small Co-operative Enterprises Scheme) as an
advisor in 1985.
Since the appointment, several media reports have highlighted Stone's transformation from
a street kid with a string of convictions and a bleak future ... to an important Ngai Tahu
business leader. Christchurch Mayor Garry Moore, who has worked closely with Stone while a
SCOPE advisor himself, sees the appointment as an inspired choice. Moore: "The very innovative
techniques that equipped Wally to survive on the wrong side of the tracks are perhaps now those
that enable him to be brilliant on the other..."
Source _ The Dominion 11 May 1999 "Strangers smile that turned life around" by Val Aldridge
- PARENTS AT WORK
A survey by Statistics NZ finds that over two-thirds of parents, with at least one child
under 14, have jobs. Over half the children under 5 years old are cared for by people other than
their parents, usually extended family. The survey also finds that one in seven parents found access
to childcare a barrier to their employment over the previous 12 months.
Source New Zealand Herald 24 April 1999 "Family first source of childcare survey"
- WINZ DEBT COLLECTIONS
An attempt by WINZ to get a beneficiary to repay a 25-year old debt, along with the
revelation by Maori Affairs Minister Tau Henare that he had not repaid an unemployment benefit
overpayment made to him years ago, has highlighted WINZ policy on debt collection.
WINZ is required by law to recover debts and it does this, as most companies do, by sending
one and if necessary a second letter asking for repayment. If unanswered, a phone call is made,
followed by a third and fourth more strongly worded letters. The last resort for non-repayment
is that WINZ has the power to deduct the payment directly from the person's wages, bank
account or, if they are dead, their estate. WINZ does not apply interest or penalties to money it is owed.
- According to The Dominion, WINZ is currently owed $753m, by 335,000 people. A
department spokesman says it can not say how much of that sum is for overpayment as opposed
to fraud. WINZ made $28.1m in overpayments in the last month alone.
Source The Dominion 28 April 1999 ""Department owed $753 million"
- OZ APPRENTICESHIPS FOR 500,000
In Australia, the government has announced a funding boost which will enable
more than 500,000 young people to take part in "new apprenticeships" over the next four years.
The Australian Government is allocating more than $1.5 billion in employer incentives and
benefits to encourage new apprenticeships from four-year TAFE courses to one-year traineeships.
An extra $100 million has been earmarked for the "Regional Skill Shortage Incentive" which
will create an additional 30,000 apprenticeships in rural and regional areas, where businesses
say they are frustrated by shortages of willing candidates.
Under the Coalition Government, the number of apprenticeships in Australia has
almost doubled to 220,000 young people. Its new target of 530,000 people (over the next four
years) reveals the extent of the government's ambition.
- The shortage of skills in a growing number of occupations has alarmed the
Australian Government and new industry-specific initiatives will target the worsening problem,
with information technology already identified as an area of special need. Co-ordinated
programs across ministries such as immigration, employment and education will be introduced to
ease the skill shortages - a problem that is likely to worsen as the Australian economy starts
to thrive again and unemployment falls further.
Source _ Sydney Morning Herald 8 May 1999 "Jobs lifeline for 500,000" by Tom Allard
- STATISTICS THAT MATTER :
This electorate contains 21,720 households, of
which 47% have household incomes below $30,000 per year before tax. That 47% is 6% above the
rate for the country as a whole. There are 31,632 adults aged 20-59 in the Nelson electorate,
of whom 64% are in paid, full-time work. Another 14% are in part-time work. Unemployment
in the electorate is 8% below the national average.
No localities in the Nelson electorate have high levels of deprivation, only 8% of the
population are in localities ranked among the 20% most deprived. The Nelson electorate ranks 47th
among 61 electorates for poverty.
( Electorate statistics compiled by Judy Reinken, and based on 1996 Census).
Source _ Judy Reinken, statistics based on 1996 Census of Population and Dwellings
- HOW IS YOUR RESTRUCTURING GOING?
How's your re-structuring going? Is there a major business or government department
in NZ that hasn't been re-structured, downsized or `re-engineered' (often repeatedly) in the last
15 years? Has there been any studies undertaken as to how the goals of the re-structuring
and downsizing were measuring up after the fact?
- In the US, estimates of the numbers of American workers who have been
`downsized' from jobs in the major corporates, from 1980 to 1995, vary from a low count of 13m people,
to as high as 39m.
In the early 1990s, the American Management Association conducted studies of
firms which had engaged seriously in downsizing. The AMA found that repeated
downsizings produce "lower profits and declining worker productivity..." Another study by the
Wyatt Companies found that "less than half the companies achieved their expense reduction
goals; fewer than one-third increased their profitability and less than one third increased
Source Eileen Applebaun and Rosemary Batt in "The New American Workplace" (pub 1993 by Cornell University Press)
- Richard Sennett, in his recent book "The Corrosion of
Character" writes that because managerial ideology presents the drive for re-structuring as a matter of achieving greater
efficiency, we need to ask whether such institutional change has succeeded in its goals.
Sennett: "It became clear to many business leaders by the mid-1990s that only in
the highly paid fantasy life of consultants can a large organisation define a new business plan,
trim staff and `re-engineer' itself to suit, then steam forward to realise the new design.
"Many, even most, re-engineering efforts fail largely because institutions
become dysfunctional during the people-squeezing process: the morale and motivation of
workers drop sharply in the various plays of downsizing. Surviving workers wait for the next blow
of the axe rather than exulting in competitive victory over those who are fired...
"Institutional changes, instead of following the path of the guided arrow, head in
different and often conflicting directions: business plans are discarded and revised; expected
benefits turn out to be ephemeral; the organisation loses direction, a profitable operating unit
is suddenly sold, for example, yet a few years later the parent company tries to get back
the business in which it knew how to make money before it sought to reinvent itself..."
- Sennett says that because institutional re-structurings signal to the finance markets
that change is "for real", the stock prices of institutions in the course of re-organisation often
rises, as though "any changes are better than continuing on as before..."According to the
markets, the disruption of organisations becomes profitable.
Sennett: "While the disruption may not be justifiable in terms of productivity, the
short-term returns to stockholders provide a strong incentive to the powers of chaos disguised
by that seemingly reassuring word `re-engineering'. Perfectly viable businesses are gutted
or abandoned, capable employees are set adrift rather than rewarded, simply because
the organisation must prove to the market that it is capable of change..."
Source _ "The Corrosion of Character" by Richard Sennett (pub 1998 by W.W.Norton and Company)
- FROM JOB TO PROFESSION
by Andrew Kimbrell
The word job in English originally meant a criminal or demeaning action. (We
retain this meaning when we call a bank robbery a "bank job.") After the industrial revolution
took hold in 18th-century England, the first generations of factory workers felt that wage work
was humiliating and undignified. Angry about being driven from their traditional work on the
land or in crafts, they applied the word
job to factory labour as a way of expressing their disgust.
Even today many of us avoid the word
job, preferring more upscale terms like
occupation or career to describe what we do for 40-plus hours each week. Yet the older meaning of
these words also reveals something about the nature of work.
Occupation originally meant to seize or capture. (It is still used in this sense when,
for instance, we speak of the German occupation of France during World War II.) What an
apt description of how jobs take over our lives, subjecting us to the demands of outside rulers.
The original meaning of career fits well with the role we play in the speeded-up global economic
rat race. In the 19th century, career meant "racing course" or "rapid and unrestrained" activity.
In searching for ways to put meaning back into our work, we might want to revive
the term vocation (from the Latin for "voice" or "calling"). Today, however, "having a vocation"
or "answering a calling" usually means embarking upon a religious lifean
unfortunate narrowing of the concept.
We all deserve to be involved in work to which we have been called by our passions
and beliefs. Following a vocation can lead to a
professionliterally, a "public declaration" of
what we believe and who we are. A profession is what our work should be, but so rarely is ...
Source _ The Utne Reader Jan/Feb 1999 "Breaking the Job Lock " by Andrew Kimbrell, available also at www.utne.com
- LOW UNEMPLOYMENT AND LOW INFLATION
The buoyant US economy seems to have put into question the assumption that
low unemployment results in high inflation. Modern economists have worked on the
assumption that an unemployment rate of below 6% would cause wages to rise, fueling inflation.
However, in the US, unemployment is now at 4.2%, the lowest in 29 years and inflation is also at a
low level. The Federal Reserve Bank chairman Alan Greenspan attributes this to increased
worker productivity through industrial investment in technology. Greenspan tells
international bankers that the threat to inflation now is the overvalued American stock market.
Source The Dominion 8 May 1999 "Productivity the key, says Greenspan"; New Zealand Herald 8 May 1999
"Grenspan warns US of growing inflation threat"
- WORLD POVERTY REPORT
World poverty is escalating and the gap between rich and poor is increasing at
an alarming rate, according to the World Bank's 1999 World Development Indicator. The
report says there are 900 million people living in the first world and 4.9 billion in the third world.
1.5 billion people, or one quarter of all the people on earth live on less than $US1/day.
Life expectancy has deteriorated by 10 years in sub-Saharan Africa. In the years from 1989 to
1995, the number of people living in poverty in the former Soviet Union has risen from 14 million
to 147 million. The report calls for reform of the global financial system.
Source The Dominion 28 April 1999 "Chaos, Aids, Asia crisis boost poverty, says bank"
- TOBIN TAX GAINS GROUND
You'll be hearing more about this: the Tobin tax. There has been an international
call for governments to enact a small tax on international financial transactions in an effort
to discourage currency speculation, and to promote longer-term security of investment in
local markets and jobs.
The campaign for a tax on currency speculation is based on the work of James Tobin,
a Nobel laureate in economics based at Yale University. Its purpose is to discourage
volatile short-term trading and the destabilizing effect this has on national currencies. The proposal
is similar to the Financial Transactions Tax which local economist John Lepper
originally suggested to the Alliance Party as an alternative to GST.
Speculative transactions under the Tobin proposal would be taxed at a tiny percent of
volume (0.1%-0.5%), once per transaction. Non-speculative transactions would be exempt,
(currently about 10-15% of the daily volume). The tax would discourage the most volatile overnight
or short-term currency trades, while leaving longer-term investments barely effected.
Dangerous currency volatility would therefore be reduced, and national macroeconomic autonomy
restored. Economic studies on the Tobin proposals predict that billions in revenue, potentially as much
as $300 - $600 billion per year, could be generated by the tax.
- The Canadian House of Commons last month passed a motion supporting
the introduction of the Tobin tax. Finland, which has just elected a new government, plans to
be the first EU country to include a Tobin tax in its economic programme. There is also a
growing international alliance of economists and community activists (http://www.tobintax.org)
who are promoting the concept of the tax around the world.
Source _ Toes97 Tobin Tax Network email conference; and www.tobintax.org
VOICE: BRUCE JESSON 1945--1999
"The idea that the New Zealand transformation is irreversible is linked to the idea
of globalisation. There is this widespread impression that New Zealand is too small a country
to resist the power of global finance, and that the nation state is redundant anyway. It would
be pointless for New Zealand to assert itself as a nation. We just have to accept the inevitable.
"The idea doesn't stand up to scrutiny. Most of what has occurred in New Zealand has
not been inevitable at all but has been a matter of choice. The monetarist policies, the
privatisation of state assets, the extremes of deregulation, the commercialisation of the state; New
Zealand governments chose to do these things with no outside pressure.
"The impression has been created that the state not just in New Zealand but
throughout the world has been undermined by the global marketplace. and that the role of the
nation has declined as a result. This cannot be entirely true, however, because in some respects
the power of the state has increased, even in New Zealand.
"We are actually experiencing a contradictory development. For instance, vast numbers
of people are dependent on the state for their income, and the state tries to use this
circumstance to control their behaviour.
"It hasn't been the state as such that has withered so much as the state in its benign
and humane role. With it has disappeared much of the cohesion and vitality of our
society, something that occurred with surprisingly little resistance.
"For we New Zealanders the challenge is to define the nature of our nation in the
context of an increasingly unstable global marketplace. Put simply, the challenge facing New
Zealand is to redefine the role of the nation in the modern global economy.
"This is not an all-or-nothing exercise requiring a choice between a global approach
or some parody of fortress New Zealand. Rather, nation-building is about creating a
cohesive society that can act internationally with some sense of purpose. It is about striking a
balance between the national and the global and deciding what out goals in that relationship should be.
"In the first instance, the problem appears to be an economic one: how do we restore
the productive economy? And there are in fact a number of practical economic measures that can
be suggested. At the same time, however, the answers to our economic problems are not
always economic but are often cultural and social.
"One of our main economic problems is that whatever happens globally has a
direct impact on our local economy; there are no barriers or sources of resistance. Overcoming
this requires the building of a sense of national identity through institutions such as the media and
the education system by a government that is not content for the nation to passively accept its fate..."
Bruce Jesson, (edited) from "Only Their Purpose is Mad" published 1999 by Dunmore Press.
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