Essential Information on an Essential Issue
17 July, 1999
- ANDERTON ON JOBS
Interview with the Alliance leader Jim Anderton on how he would make a difference on jobs
- ALLIANCE WANTS A JOBS FUND
With the strong possibility of a change of government at the end of this year, attention
is turning to what a potential Labour/Alliance coalition will do about jobs. If a coalition is
achieved, Alliance Leader Jim Anderton will be a key contributor to economic policies. And action on
jobs will be the top priority for the Alliance members of the coalition.
In the next few weeks, the Alliance will be announcing details of its economic
development policies which will include proposals for an Economic Development Fund to fund new
job-rich developments in both the private and public sector. Jim Anderton is keen to see the
establishment of a new Ministry of Economic Development and Employment ... and wouldn't be surprised if
he finds himself as its Minister in a future coalition government. This Ministry would run the
economic development fund through Regional Development Agencies similar to Scottish and
Irish development models. In this issue of The Jobs Letter, we include excerpts of an interview
with Jim Anderton on his proposals.
Source - The Alliance press release 29 June 1999 "Alliance wants jobs fund"
- THE MONEY OR THE JOBS
Trade and Jobs have been in the spotlight this month, with the Auckland APEC
meetings focusing local debate on tariffs and their effect on income and employment.
PM Jenny Shipley told the Auckland's Northern Club that the APEC conference was showing
us "how jobs and wealth are genuinely created" here in New Zealand.
- Last month the PM released a study by New Zealand Institute of Economic Research
which showed that trade liberalisation has put more money in people's pockets. The study, prepared
for the Ministry of Foreign Affairs and Trade, showed that the process of tariff removal begun
in 1987 has delivered what Shipley calls "...the equivalent of a significant wage increase to
New Zealand consumers". The report focused on four consumer goods that were subject to high
tariffs - cars, household appliances, clothes and shoes. These items together account for about
one-quarter of all household spending.
- The figures: tariff removals have led car prices to drop by 16% since 1987;
household appliance prices have fallen by around 9%; clothing prices have fallen by 15%; and shoe prices
Jenny Shipley says that when we add all this together, typical New Zealand householders
have another $7.30 a week in their pockets, thanks to tariff removal in these four items alone. For
a three-person household, that's a gain of $22 a week, or $1,140 a year.
When the PM's economic advisers look forward to the year 2010, the gain for the average
consumer is expected to rise to $14.10 a week. This translates to an extra $42 a week, or $2,180
- Shipley: "In case you listen to the arguments that tariff reductions have meant job losses,
let me tell you that during the same period, more than quarter of a million new jobs have been
added to the economy. That's in the last decade. Yes there have been job shifts, and sector changes.
But overall we've created more than a quarter of a million new jobs for New Zealanders..."
"The evidence is clear. In terms of both jobs and prices, New Zealand is winning from
trade liberalisation. This government has every intention of continuing down this path.
"I challenge other parties to get off the fence and say whether they support or oppose our
APEC goals. While Mike Moore's position is clear, Helen Clark is still sitting on the fence, and
Jim Anderton is trying to turn back the tide ... I challenge them to come clean."
Source - "Shipley On Trade And Jobs " PM Jenny Shipley speech to Northern Club Luncheon in Auckland 2 July 1999
- The Alliance has been quick to take up this challenge. Jim Anderton's view on tariff
reductions is that the benefits to consumers in terms of price reductions have come with "an
horrendous human price tag" for people who once had a job.
The Alliance has released figures that show at least 25,000 New Zealanders lost their jobs as
a direct result of tariff reductions since 1987. In 1987, 58,700 people were employed in
making cars, clothes, footwear and associated industries in New Zealand. Now there are only
33,000 people in those industries. Anderton: "Most are likely to lose their jobs as more tariffs are
abolished in the next few years ..."
The Alliance also reports that there has been no gain in jobs for our exporters by removing
tariffs on manufactured goods. Jobs in Agriculture have only increased by 1,900 since 1987,
whereas jobs in Manufacturing have decreased by 26,500.
- Anderton says New Zealand has sacrificed its own industries through tariff cuts - cuts
which are far in excess of our major trading partners. And New Zealand still faces unfair tariff
competition from our major trading partners. His figures:
-- tariffs on beef range from 10% in the USA to 50% in Japan and 70% in China.
-- tariffs on apples range from 18% in Japan, 48% in Korea and between 40 to 100% in China.
-- tariffs on butter and cheese range from 10% to 20% in the USA, 35% in Japan, and 40-95%
Source - "25,000 Jobs Lost Though Tariff Reduction, Axe To Fall On 33,000 More" Press Release from The Alliance 25
- ROGER KERR ON JOBS AND FLEXIBILITY
The Business Roundtable Executive Director Roger Kerr is concerned that if there is
a change of government at the end of the year, then the Employment Contracts legislation will
be repealed. Kerr criticises Labour and the Alliance for "wanting to turn the clock back", and
says that the opposition parties seem unwilling to see that their criticisms of the Employment
Contracts Act have not been borne out.
According to Kerr, statistics are showing that the number of work days lost through strikes
has fallen since the legislation was introduced, and the average weekly earnings has risen from $564
in May 1991 to $682 in February 1999. New jobs have been created and unemployment has
fallen from 11% to 6% by 1998. Kerr: "It could have been down to 4% by now had NZ maintained
the momentum for change..."
"In the labour market we can ill afford to go back down a path of re-regulation and union
involvement. It is paradoxical that those who claim to care most about the unemployed and people
on low incomes continue to promote policies that keep people out of work and widen income
inequalities. NZ has been moving in the right direction and should go further. Unemployment
and labour market performance generally, is a matter of choice."
- Roger Kerr told a Wellington Chamber of Commerce meeting that the belief that full
employment is a thing of the past and unlikely to be achieved again "... is nonsense, as the US
is showing us today."
Kerr: "There is no reason why we should not be looking back in a few years time on the
high unemployment rates of the 1980s and 1990s as an aberration, just as the high inflation years of
the 1970s and the 1980s are rightly seen as an aberration today. To boost productivity and
employment prospects, the key step is to establish full freedom of contract in the labour market..."
Kerr sees the key factor in unemployment as one of employers being reluctant to employ
during an economic recovery because of the inclusion of personal grievance provisions in contracts.
He wants these to be made a matter of voluntary negotiation: "Open labour markets allowing
workers to quit unsatisfactory jobs and employers to fire unsatisfactory workers are the greatest
protection for both parties against individual injustice. Other protections can be negotiated by
contract, if both parties wish ..."
Source - NZPA 3 July 1999 "Kerr links jobs to Free Market"
- MAYORS BACK RETENTION OF CEG
Mayors from around the country have joined to support Labour's disapproval at Work
and Income New Zealand's plans to restructure the operations of the Community Employment
Group. Labour spokesperson on employment Steve Maharey wrote to mayors last month to draw
their attention to the WINZ review of CEG. He has received responses from over a dozen mayors
- and reports that the majority have written in support of CEG and its work.
Maharey: "It is clear that WINZ is proposing changes which will see the end of CEG as a
stand alone organisation focused on community economic development. It appears CEG will be
merged into WINZ and focused on helping individuals find community wage work. Such a change
would be very short-sighted as community development has a significant impact on long-term
development within regions. It is time for WINZ to listen to the communities it is there to support.
Its track record of managing change has been disastrous, so why risk a programme that is
accepted as having positive benefits?"
Source - Press release from Steve Maharey 29 June 1999 "Mayors express concern about fate of Community
- CONFERENCE ON COMMUNITY BANKING
"Community Banking" is the theme for this year's COMMACT annual conference to
be held in Wellington on 3 August. Special guest at the seminar will be Russell Jenkins from
the Bendigo Bank in Australia. For more information, contact COMMACT at P.O.Box 423,
Auckland phone 09 302 2496 fax 09 377 4804.
Source - conference flyer
- APEC CONFERENCES
There are two APEC "peoples" conferences being held in Auckland just before the
Leaders Summit on September 12-13.
"Reclaiming APEC" is a conference being held at the Auckland University from Tuesday 7th
to Thursday 9th September. The conference is supported by Proutist Universal, the
Sustainable Futures Trust, the Pacific Institute of Resource Management, the Aotearoa New Zealand
Environment Trust, and Native Forest Action. Guest speakers will include Walden Bello,
Hazel Henderson, Sir Paul Reeves, Pita Sharples, Sukhi Turner, Marilyn Waring, Jeanette
Fitzsimons, Sohail Inayatullah, and Marion Wood.
The conference flyer describes the gathering as a chance to critique APEC's "misguided
direction" and to develop positive models for people and earth-centred development. For more
information contact email@example.com or the conference website at www.prout.org/apec
- The "Alternatives To The APEC Agenda" Conference will be held in Auckland on
Friday 10th to Sunday 12th September. It is organised by the Aotearoa/New Zealand APEC
Monitoring Group and sponsored by GATT Watchdog, CAFCA and the NZ Trade Union Federation.
Speakers here include: Antonio Tujan, Executive Director of the IBON Databank in the
Philippines; Moses Havini, of the Bougainville Freedom Movement; Sunera Thobani, of the Simon
Fraser University in Canada; Crispin Beltran, the Chairman of Kilusang Mayo Uno (KMU) in the
Philippines; and New Zealanders Dr Jane Kelsey, Moana Jackson, Annette Sykes, Robert Reid,
Radha D'Souza, and Aziz Choudry.
To receive registration pack for the forum contact firstname.lastname@example.org or fax 09 846
3297 website www.apec.gen.nz
Source - internet flyers from conference organisers at www.prout.org/apec, and gatt watchdog
- STATISTICS THAT MATTER : TAUPO
This electorate contains 21,837 households, of which
44% have household incomes below $30,000 per year before tax. That 44% is equal the rate for
the country as a whole. There are 33,675 adults aged 20-59 in the Taupo electorate, of whom
58% are in paid, full-time work. Another 12% are in part-time work. Unemployment in the
electorate is 4% above the national average.
Localities in the Taupo electorate which have high levels of deprivation are: Rangipo, Taupo
East, Mangakino, Tokoroa: Central, Stanley Park, Parkdale, Matarawa, Strathmore.
Turangi, Wairakei-Aratiatia, Raetihi and National Park. (- Electorate statistics compiled by Judy
Reinken, and based on 1996 Census).
Source - Judy Reinken, statistics based on 1996 Census of Population and Dwellings
- CLINTON TOURING US POVERTY
US President Bill Clinton last week embarked on a week-long tour of impoverished areas
of the US, including the first visit of a US president to an American Indian reservation this
century. His visits were to highlight the plight of the nation's estimated 36m poor people, and to
promote to business leaders that depressed areas do offer commercial opportunities.
Clinton highlighted a Department of Housing and Urban development study that found that
inner city neighborhoods have $US 330 billion in purchasing power. Much of this however was
not spent in the inner cities because so few businesses are willing to locate there.
Clinton used the poverty tour to promote his "new markets" initiative involving tax credits
and loan guarantees for businesses that invest in distressed areas. The new tax credit would be
given for up to 25% of the money a firm invests in poor areas. According to the Reuters news
service, this is expected to generate $6 billion in new equity capital into the areas, while costing the
federal government only about $980 million over five years.
At every stage of the tour the president was accompanied by company executives and bankers.
He told the coal-mining town of Hazard, Kentucky: "I came here in the hope that we can say to
every corporate leader: Take a look at investing in rural and inner-city America ... It's good for
business, good for America's growth and it's the right thing to do..."
Source - New Zealand Herald 7 July 1999 "Offer of Hope to USA's 36m in poverty" by Reuters; The Guardian 8 July
1999 "Clinton on poverty drive, at last" by Martin Kettle
ON THE CLINTON POVERTY TOUR
" In a recent speech, Clinton compared himself to Franklin Roosevelt. Both of them, he said,
were "people who were progressive, people who try to change things, people who keep pushing
"The difference is that Roosevelt was acting at the start of his presidency in a time of
economic crisis, and was almost entirely willing to try any means that worked to achieve his ends.
Clinton, by contrast, is acting at the end of his presidency in a period almost bereft of economic crisis,
and will only try those means that pass muster with the stock markets..."
-- Martin Kettle, Washington Diary, The Guardian
"It's positive, and long overdue, that Clinton is addressing these issues, but to be saying that
you want to deal with poverty while you're calling welfare `reform' a success is rather
disingenuous. While the US welfare rolls have dropped sharply, studies indicate that many have simply
joined the ranks of the working poor. They now have jobs that are paying below poverty wages,
without benefits or affordable child care; moreover, states have been `forgetting' to tell them that they
are still eligible for Medicaid and food stamps ..."
-- Mimi Abramovitz, Professor at the School of Social Work at Hunter College and author
of "Regulating the Lives of Women"
"It is good that Clinton is going out and calling attention to these issues, but some of the
suggestions are flawed. If you build a base of incomes and social and physical infrastructure, then
business activity develops, but if you throw business activity in a region where that does not
exist, then you have a sweatshop phenomenon. What is needed is housing assistance, public
services, money to improve schools and the environment, and income support such as through the
earned income tax credit and a higher minimum wage."
-- James K. Galbraith, professor at the LBJ School of Public Affairs,
"If it wasn't for NAFTA, hundreds of thousands of jobs would not have left the U.S.,
creating more poverty. If there were minimal protections for migrant workers, then we wouldn't have
the depth of poverty that we have. If North Carolina, where I live, wasn't a `right to work'
state, people could do collective bargaining and have the guarantee of organized workplaces. As it
is, they can be fired at will. What you have now are people who are afraid of losing jobs, so
they don't push for better conditions and safety at their workplaces..."
-- George Friday, a member of the Grassroots Policy Project and a low-income activist.
"What the president's tour highlights is that there are really important pockets of poverty in
the country. Full employment is the single most important thing in lifting people out of poverty,
and the president seems to understand that. But a rising tide lifts boats unequally. While poverty
is falling, income inequality remains at post-war highs ... Using tax incentives just moves
-- Robert J. S. Ross, author of the forthcoming "Hearts Starve: The New Sweatshops in
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