And the Community Wage
from The Jobs Letter No.101 / 27 April 2000
The Maori Employment and Training Commission takes a critical look at the
The Commission reviewed the Community Wage Scheme and its present structure and
philosophy. It concluded that little significant employment impact would be made on Maori, and
indeed non Maori, who participate in the scheme in its current form. It's recommendations: the
scheme must be built upon, adequately funded, and have a positive impact on the employment
opportunities of the participants.
Here is an essential summary of the Commissions findings.
- The questions that the Commission had to consider were:
— Does the Commission support the Community Wage Scheme?
— Is the Community Wage Scheme good for Maori?
— Is the Community Wage Scheme considered to be a success for Maori?
— What does the Commission consider to be the essential ingredients for the
Community Wage Scheme to be successful?
The Commission has supported the Community Wage Scheme on the basis:
— that people should not be paid for doing nothing.
— undertakings given to the Commission by the Minister of Employment, as to the
devolution of authority to the Regional Commissioners to address regional problems.
— the understanding that in the areas of high Maori unemployment, Maori Regional
Commissioners would be appointed.
In respect of the first point above, this is the concept of "reciprocal obligation" which seems to
be at the hub of the Community Wage Scheme argument. Unfortunately no help is given to
participants beyond the concept of "reciprocal obligation" ie. what should they be paid to do?
The debate as to whether or not people should be paid to do nothing, must be measured against
the quality of the activity that the individual is required to undertake.
From a purely mathematical point of view, the scheme would appear to have a limited life with
the limiting factors being:
— unless successful programmes are put in place to increase the size of labour market
(and GNP growth is only one of those factors in increasing the labour market) there will always be
a pool of jobless (December 1998: 226,500 people).
— there is a limit as to the availability of "Community Work". It is stated that the
Community Wage Scheme is "project based" and must not cause displacement. By definition, any
project activity in a free enterprise system, will cause displacement, and even if the project is
totally labour focused, there are costs of organisation, and if material/equipment is needed, the
community is obliged to resource these projects. Ultimately, the community will be depleted of
resources, if they in fact had them in the first case.
"The response from the rural Maori sector was clear, they would not increase participation
levels unless there was an attached economic driven infrastructure. There are no extra resources,
human or financial, left in the community. Those that led many of the marae/provider initiatives
were already over stretched. Further more, there was no goodwill left towards government
initiatives that promoted innovative approaches. Innovation meant cuts in services and yet another
burden for whanau to carry ..."
report from The Maori Employment and Training Commission
- IS THE SCHEME GOOD FOR MAORI?
Currently the largest participant group in the programme
are Maori, and therefore if the scheme is punitive and sanctioning, it is not good for Maori.
However, if there was further debate and refocusing on what constitutes Community Work, and
if resourcing was made available to undertake this community work, this scheme could be
very good for Maori, on the basis however that it was run by Maori for Maori.
A recent report conducted by Te Puni Kokiri clearly indicates that Maori are over represented
in programmes that are not `linked' directly into the labour market, and under represented in
those programmes with a greater probability of securing work following the programme. The
Community Wage Scheme in its current form reinforces a continuation of this trend. Maori have said
for some time that they are sick of going from one course (TOPS) to another. This will
continue under the Community Wage Scheme, because it guarantees nothing.
- IS THE SCHEME A SUCCESS?
On 14 July 1998 the Minister of Employment advised that
there were 8,169 on the Community Taskforce Projects in June 1998, and the Ministry of
Employment stated "It is expected that next year between 25,000 - 28,000 unemployed people will
As of 3 March 1999, 7,210 were participating in the scheme, plus 1,369 were still on the
Community Taskforce scheme: a total of 8,488. This is an increase of 319 in numbers since June 1998.
In that time unemployment numbers have also increased.
It should be noted that the Community Taskforce programme is being phased out and replaced
by the Community Work Scheme.
Papakura Marae, a Community Broker Organisation, found that the limitations that are placed
on the type of work that participants are able to be involved in, meant that the Marae has not filled
all of its placements.
It would appear that the sustainability of the Community Wage Scheme ie. the ongoing ability
of the community groups to continue to find "work" that falls within the guidelines of the scheme,
is severely limited.
"The application of new institutional economics presents unemployment as a simple
malfunction in the market where there is a mismatch between the skills of the unemployed and the skills
required by employers. The evidence is that this approach is simplistic, as unemployment is a
complex issue imbedded in a range of personal, social, and cultural issues, and is the result of
deficiencies in the labour market, not deficiencies of the individual ..."
report from The Maori Employment and Training Commission
- WHAT ARE ESSENTIAL INGREDIENTS FOR A SUCCESSFUL SCHEME?
In the opinion of the Commission, a successful scheme must have at it's core, the principle
of participation with a purpose.
The scheme should be a seamless process which picks a person up, places that person in real
full time employment, or training for employment.
In order to do this, the philosophy behind the Community Wage Scheme must change.
The scheme at present has been constructed on the basis of international models, but has not
included within it the fundamentals that has made international models moderately successful ie. the
participation of the employer in the scheme, adequate state/federal funding, and case management.
Research shows that the current scheme relies too heavily on the goodwill of communities,
that are already under extreme stress and growing more susceptible by the day
This Commission could find no evidence that the Community Wage Scheme would create
long term sustainable employment for Maori. Conversely, the Community Wage continues to
reinforce low skill labouring options, which will spell disaster for Maori as a population and New
Zealand as a nation.
Full copies of this report are available on the Maori Employment and Training
Commission Website at http://www.maori-employment.govt.nz
- MAORI COMMISSION RECOMMENDATIONS
That Government initiates an Employment Strategy to address the fact that the country
is deficient of approximately 225,000 jobs. This Commission concludes that the Community
Wage Scheme as it stands, without adequate funding and linking to the labour market, is bound to fail.
- That Government must be more pro active in assisting job creation by business
through economic policies. There must be a national commitment to regional and community
economic potential audits, and targeted assistance to job growth sectors.
- That Government must re-think the current Treasury policy of `fiscal neutrality'. The
State must accept responsibility to manage risk, and that there is a case for positive discrimination
to correct inherent social and economic problems, particularly as they relate to Maori
disadvantages in the labour market.
- That to succeed, the Community Wage Scheme requires Government resourcing to
communities to enable them to resolve their own problems. Passing the responsibility to the
community, without adequate resourcing, is a cop out.
- That WINZ Regional Commissioners must be given flexibility to assist Maori
enterprise development aimed at creating sustainable employment, and should be advised by a
National Maori Commissioner on processes to co-ordinate this development. The 13 Regional
Commissioners appointed by WINZ, mainly from the ranks of DSW staff, have little understanding
of issues Maori.
- That a Maori Commissioner similar to the position held by the former Acting Manager
of the Community Employment Group, Parekura Horomia, should be appointed after
consultation with National Maori organisations.
Source - Interim report to the Minister of Maori Affairs (Volume 3) , 29 March 1999 by the Maori Employment and
Training Commission, available on their website at http://www.maori-employment.govt.nz
VOICES ON THE MAORI COMMISSION REPORT
"Labour has said all along that the scheme is nothing more than an expensive exercise
undertaken by a tired government trying to distance itself from any responsibility for the unemployed.
This report shows that the community wage is a complete flop and, in fact, is also very destructive
for those people forced to participate. The Government, in the light of this research, must
urgently reconsider the scheme. Labour will scrap the community wage, which concentrates on
keeping beneficiaries busy, in favour of a genuine focus on increasing job opportunities for New
— Steve Maharey, Labour employment spokesperson
"What the Maori Employment and Training Commission have produced is very earthy
response. I wouldn't have expected anything less they're there to reflect the concerns of Maori at
the grassroots and I'm glad to see they're doing just that.
"Having said that, the Government has also reacted positively to another of the initiatives
the commission recommended which was the new Maori trade training scheme announced in
this year's budget - it's bold, it's exciting and it's by Maori, for Maori. Along with that we've
refined Te Ararau, another new trade training scheme introduced when I became Minister,
targeting Maori employment training needs.
"So I'm not deaf to the issues the commission has raised and they know this. The
commissions were tasked right at the beginning with the job of gauging the feeling of people at the
grassroots level and recommending strategies and policies in line with their findings for me to take directly
to my government colleagues.
"Some of those strategies and policies may develop into wins. Others might not. That's the
political reality, but I'd suggest there's been more wins over the last electoral cycle for Maori
than there have been for a while ..."
— Tau Henare, Minister of Maori Affairs, leader of Mauri Pacific
"We are right on target. Labour's plan to scrap Community Work if it becomes the Government
is foolish, and a backward step. It would leave the most needy out in limbo.
"Since last year 25,000 people have so far taken part in Community Work projects for the
long term unemployed, or those at risk of falling into that category. Those 25,000 people, many
of them Maori, have gained a better chance of finding employment in future because of their
participation in Community Work. Without it they would be slipping further and further away from
the job market, sitting passively at home doing nothing.
"Jobs are now being created by the economy, but we have stated clearly from the start
that Community Work is not aimed at producing instant paid employment, any more than it will
turn winter into summer. However it will produce people who are more work-ready.
"Steve Maharey has consistently criticised Community Work without providing, or being
challenged to provide, any well-thought plans for what Labour would do to deal with the long
term unemployed, complete with costings. It is about time he did so ..."
— Peter McCardle, Associate Minister of Work and Income
"The report into the community wage released by the Commission puts a very strong emphasis
on welfare that has a reciprocal obligation. The Commission has supported the community
wage scheme on the basis that people should not be paid to do nothing. That is a principle that
ACT strongly supports.
"While there are serious flaws in the Community Wage scheme, what it has done is finally start
to make work the focus of welfare. New Zealanders need real jobs. For those in genuine need
welfare must provide a practical hand up back into work.
"The Commission has also recognised the importance of economic policies that stimulate
growth and jobs. That is why we have to get Government off the backs of business, cut the red tape
and remove the current barriers employers face in taking on new staff.
"Labour's answer to the report is to say it will scrap the scheme. As usual Labour has offered
no constructive alternative. Let's remember that Labour has only ever increased welfare
— Muriel Newman, ACT Social Welfare Spokesperson
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