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    Essential Information on an Essential Issue

    Letter No.117

    8 February 2000

    Statistics That Matter for the December 99 quarter

    The official unemployment rate fell to 6.3% for the December 1999 quarter, down from 6.8% in the previous quarter. Official unemployment is now 119,000 people, a fall of 9,000 from one year ago and the lowest level in three years. We include our regular Statistics That Matter feature in this issue of The Jobs Letter. Some highlights:

    — the drop in Maori unemployment was well ahead of the overall improvement in job numbers. The Maori rate of unemployment is now at 14.5%, down from 19.5% last year. There were 17,000 more Maori working in 1999 than in 1998. However Maori unemployment is still three times the 4.5% European rate.

    —47,000 new jobs were created in 1999 with most of these being full-time (up 44,000) rather than part-time (up 3,000).

    • With the drop in the unemployment rate, economists are picking the Reserve Bank will lift interest rates. Economists believe that rising employment levels drive up demand for higher skills, resulting in rising wages … one of the key components of inflation. This has actually not been happening in the recent performance of an "inflation-free" United States economy (see The Jobs Letter No.115). The US theory is that new technology is making workers ever more productive. The economy can therefore grow fast and unemployment rates drop to historically low levels without causing wage inflation or production shortages.

    But, Rod Oram, Business Editor of The New Zealand Herald, points out that "productivity" is the key difference between the US and NZ economies. Oram says that US workers are producing more in the same amount of time, primarily due to advances in technology ... But this is not the case in NZ. Oram: "Since 1990, our labour productivity has grown at an average of only 0.5% a year. Overall, our productivity ranks 23rd out of 26 developed economies. To put it crudely, the NZ way of meeting demand is to throw more people and longer working hours at it. Moreover, skills are in such short supply among workers and the unemployed that a bidding war for talent is breaking out. Despite a high unemployment rate of 6.3% [compared to the US] … wages are spiking up."

    Source — NewsRoom 3 February 2000, Household labour force survey December 1999 quarter; Radio New Zealand 3 February 2000, Stephen Harris; The New Zealand Herald 4 February 2000, Jobless fall puts heat on interest by Brian Fallow, The New Zealand Herald 4 February 2000, Far adrift of the `new economy' Rod Oram

    "The Survey states that the percentage of long term unemployed has changed little since this time last year. Over 40% are long-term unemployed. These people and their families are at high risk of becoming entrenched in poverty … and highlight the need for a coherent and proactive employment policy. These families suffer from persistent low incomes, family disruption, poor health, educational achievement and housing. These are the people Steve Maharey and WINZ should be targeting policy help at and offering assistance with expenses like relocation costs. It is not good enough for Winz to recycle the same workers through different jobs and then claim credit for a job well done. Steve Maharey will not have succeeded until the long-term unemployed figures are substantially reduced…"
    -- Muriel Newman, ACT employment spokesperson

    "The unemployment figures show that the previous National Government's policies were working and making a real difference for New Zealanders. A half a percent drop in a single quarter is an outstanding reduction in unemployment. I am pleased that the National-led government policies and direction helped create the jobs that has given more New Zealanders the chance to work. The 50,000 new jobs created over the past year show that our ideas were working for people and making a difference. It is hugely encouraging to see job creation highest among Maori. Giving people a job is the most positive way to make a difference _ not waiting for endless inquiries and consultation on what might help close the gaps…"
    -- Bob Simcock, National employment spokesperson

    "The creation of new sustainable jobs is a commitment this Government made last year on the election trail. While, of course, the drop in unemployment is welcome we want to do much better. The Government sees job creation as the central focus of our economic and social programme. We intend to actively promote export led growth and local economic development to bring the unemployment rate down even further. Our focus on maintaining employability will include better access to training and support for New Zealanders to retrain throughout their lives. The experience of other similar economies shows us that it is possible to achieve significantly lower levels of unemployment without compromising other macroeconomic objectives…"
    -- Steve Maharey, Minister of Social Services and Employment

    Sources — Press Release ACT New Zealand 3 February 2000 "Govt. must do better for long-term unemployed _ Newman"; Press Release New Zealand National Party 3/02/00 "Job figures show National's ideas made a difference" ; Press Release New Zealand Government 3/02/00 "Unemployed drop welcome but not good enough for this Govt"

    Social Services Minister Steve Maharey has told Winz CEO Christine Rankin to dis-establish a private sector advisory board. The board was designed to provide an outside perspective and to help Rankin with business planning. But Maharey says the board is a waste of money and its removal is part of the change of culture he intends to make in Winz. He says the department should be heeding the advice of beneficiaries not private sector representatives. Maharey's view is that government ministers, not an external advisory board, should be setting the direction for Winz: "The government was concerned to insure there is a direct line from the minister to the organisation and that there was not another advice line coming in…"

    Gareth Morgan, director of Infometrics and a member of the dumped board, told National Radio, "We're all waiting with bated breath to see how the Maharey model of hands-on will compare. It's an absolute recipe for disaster. Are you telling me we can run Winz with temporary politicians every three years?"

    • The board included Morgan; Steve Marshall, the retiring Employers Federation CEO; George Hickton, current CEO of the NZ Tourism Board and former head of Income Support, the TAB and the NZ Employment Service; Jan Dowland, CEO of the IHC; June McCabe, chief manager of government business at Westpac Trust; Lee Mathias MD, Birthcare NZ; and Lincoln Gould (chairman) from the Victoria University Graduate School of Business. It had been meeting for six or seven months and ordinary members were paid $500 per meeting.

    Gareth Morgan's view is that the board members had provided their services "for peanuts". Morgan: "I thought of it as social work, really…"

    • Morgan is also critical of Maharey's pre-election promise to separate the employment and welfare functions of Winz. Morgan: "Under the old system Income Support was quite separate from the Employment Service, and a person could turn up at Income Support for their cheque but some of them would never turn up at the Employment Service. Winz has seen a huge increase in placement rates now as a result of the fact that now, when someone walks in the door wanting a benefit, they are told: here's a job. The thing that really concerns me about Maharey is him saying he would separate out the two functions again … is that if he does, it would be a tragedy for New Zealand as a whole…"

    • Robert Reid, president of the beneficiary and low-income workers' union Unite!, says that sacking the board is "a good first step" in turning the department into one that works for, rather than against beneficiaries. Unite! has been a strong critic of Winz since it was first created almost 18 months ago, and has been active in protests outside Winz offices. But now Robert Reid is more hopeful about changes at the department. Reid: "We are pleased that this step has been taken so soon after the meeting of beneficiary advocacy groups and Steve Maharey. At that meeting, changing the culture of WINZ was high on the groups' shopping list..."

    Source — National Radio 3 February 2000 by Catherine Walbridge; National Radio 3 February 2000 Kim Hill speaking to Gareth Morgan; NewsRoom story 14012 NZ government press release 2 February 2000 "Board goes as Maharey set new direction for WINZ"; NewsRoom story 14030 2 February 2000, Press release Unite! Unemployed "union delighted at Maharey move".

    The change in the culture of Winz may be reflected in the language by which its staff address the people they are serving. Christine Rankin is presently asking beneficiary groups for feedback on the terms used by the organisation. She says Winz adopted the term "customer" as a reflection of the agency's commitment to "customer service". But this term has been widely criticised by politicians as part of an inappropriate "corporate image" of the agency. Winz is considering using the term "citizen", because it doesn't differentiate people by social or economic status.
    Source — Christine Rankin conversation with Dave Owens 1 February 2000 New Zealand Herald 24 January 2000, "Customer or beneficiary? It's a no Winz situation" by NZPA

    PM Helen Clark has taken leadership to address Maori social and economic inequalities. Clark will chair a new Cabinet committee and "throw the weight of the PM's office" behind the drive for effective solutions to the growing gaps between Maori and Pacific people and other New Zealanders. Speaking at the Ratana annual celebration, Clark described these efforts as addressing "… one of the greatest challenges facing the country."

    The emphasis of the new Cabinet committee will be on increasing the capacity of Maori organisations and better identifying resources to address the Maori gap. Clark says that ever since the money from the Ministry of Maori Affairs was put into the mainstream, people have wondered where it has gone "…and this is a source of great frustration to Maoridom."

    • The Minister of Maori Affairs Dover Samuels says the new Cabinet committee is not about separatism but about the effectiveness of delivery systems. Samuels says he believes that government agencies have been fudging how they have been spending the money allocated to Maori, as well as outcomes gained from the expenditure. Samuels: "The days of smokescreen and camouflaging are over. The new direction will take a change of the mindset of some government departments, particularly Treasury..."

    • Maori commentator Ranginui Walker says the problems of housing, health, education and employment facing Maori are not new. Walker points out that these same issues were raised by Sir Apirana Ngata as far back as 1920 when he developed a scheme to make Maori land work for its owners. Walker believes this earlier scheme failed because bureaucrats went out of their way to foil it. Walker's view is that power-sharing policies need to be put into place to ensure economic well-being: "There has to be a substantive change in the halls of bureaucracy and a genuine commitment from the government."

    • The National government set up commissions on Maori health, education, housing and employment which were to develop strategies to help close the gaps between Maori and non-Maori. The final reports from these commissions are expected within the next few months.

    Source — The Daily News 25 January 2000, Spending on Maori called into account by Julie Gifford, The Dominion 25 January 2000, Clark's pledge to Maoris by Jonathon Milne, New Zealand Herald 25 January 2000, Clark to take up challenge of racial gap

    A new study from the NZ Poverty Measurement Project confirms that one in three NZ children are living in poverty, and high housing costs are the main contributing reason. Children under 15 years are the worst off, making up 44% of all poor in NZ. Children with one parent are still the most likely to be living in poverty ... with nearly half of one-parent households falling below the poverty line.

    The study has combined official statistics with focus group analysis of the daily hardship faced by many. It has been conducted by Bob Stephens of Victoria University, Charles Waldegrave of the Anglican Family Centre, and Paul Frater of Business and Economic Research. The study tracks trends in poverty in NZ between 1984 and 1998. The poverty line in the study has been set at sixty per cent of the median household disposable income, as the minimum needed to pay for food, clothing, utilities and housing costs.

    The study points to the high housing costs as a key factor in poverty, pointing out that housing costs take up a much greater portion of a low-income person's income than it does for the rest of the population. The study shows that one-in-five children under the age of 15 live below the poverty line before housing costs are factored in. Once housing costs are included, this number increases to one-in-three children.

    • Minister of Housing Mark Gosche acknowledges that the cost of housing is too high for many people on low incomes and says that changes to state-housing rents are a top priority to the government. The government has promised that state rents will be kept at 25% of the household income.

    • Meanwhile, Social Services Minister Steve Maharey says that the previous government created a "poverty trap" by adopting the view that beneficiaries "were probably their own worst enemy".

    Maharey: "We saw attack ads on beneficiaries, we saw massive cuts to benefit levels, we saw a kind of testing which really made it almost impossible to get off a benefit …What we have to do is work on a system now which makes it worthwhile to go to work, that you do retain money, and that being on a benefit is not a trap but it opens doors for you to get opportunities in education and training."

    Source — The New Zealand Herald 3 February 2000, Housing costs blamed for high poverty level, NZPA; NewsRoom Story 13996 Study says one in three children below poverty line by Peter Fowler

    The Coats Spencer Crafts at Mosgiel will close with the loss of 141 permanent positions. This is quite a blow to the Mosgiel and Dunedin economies when you consider that, in the last year, almost 100 other workers at the knitting yarn mill have already been laid off. This closure will prove to be a good chance to see what responses the new Minister for Economic Development, Jim Anderton, will bring to such a crisis. This week, Anderton and Sandra Lee, Minister of Local Government, will be meeting with the Dunedin mayor and council to discuss the closure and talk about a range of economic initiatives in response to the downturn.

    Anderton: "These jobs have effectively been lost overseas. This is yet another example of the urgent need for the rapid transformation of New Zealand's economy and an economic framework that provides investment and support for employment and industry. The previous government took the view that the textile industry was finished and simply ignored the consequences. It actively undermined the industry through the rapid removal of tariffs and a totally unsupportive business environment. When a country unilaterally dismantles tariffs, it loses industries and jobs, which is why most other developed countries have not tried to copy New Zealand's failed experiment.

    Anderton does not take the view that the textile industry is finished: "I'm in contact with textile industry figures who are working with this government on an exciting, high-tech, job-rich future for the industry. I am determined that the industry and enterprise base of New Zealand will be broadened and I am committed to strengthening the development of regions that are currently in decline…"

    • Meanwhile, Anderton looks set to get his own Ministry of Economic Development, which would appear to be a significant victory for the Alliance leader. Labour had wanted to retain Anderton's economic development portfolio within the Ministry of Commerce, and establish a new Crown entity — Industry New Zealand — to implement economic development policy. But Anderton has negotiated his own ministry.

    The aim of the new ministry will be to encourage investment in innovation and new technology, develop high quality, added-value exports and strengthen the country's infrastructure "…so that regional communities can participate in that development and not be left behind."

    Sources — "Closure of Coats Spencer Crafts, Mosgiel" statement by Dunedin MPs, Pete Hodgson and David Benson-Pope 4 February 2000; Jim Anderton press release "Another 141 jobs lost because of failed policies of National"; The Daily News 7 February 2000 "Anderton clinches deal for own ministry" by Mathew Brockett

  • ONE MORE WORKER CAMPAIGN onemore.jpg - 7171 Bytes
    The One More Worker campaign, a job creation programme appealing to businesses to take on one more worker, has expanded into Taranaki. Venture Taranaki, with the support of its Winz regional office, has already found 26 new jobs during December and January. Venture Taranaki encourages the new job opportunities as part of its "Business Grow" visitation service. In Taranaki, there are about 6,400 businesses and about the same number of people unemployed. It seems a simple message for organisers to point out that unemployment could be eliminated if each Taranaki business just took on one more worker.

    The One More Worker concept was started in Horowhenua which has just made its 100th placement. The campaign is handled differently there, where they do not have a business visitation scheme. Instead they rely on a promotional campaign. Tony Rush, of Enterprise Horowhenua, says their Winz regional commissioner is preparing an evaluation of the campaign which may provide the ground work for One More Worker to spread elsewhere in NZ.

    Source — phone call with The Jobs Letter, 3 February 2000, Elaine Gill; phone call, 4 February 2000, Tony Rush

    Media Watch. Paul Hawken, leading international environmental businessman and author of The Ecology of Commerce, was at the World Trade Organisation (WTO) protests last November in Seattle. In a moving article, Hawken describes his own experiences in being tear gassed and pepper sprayed by Seattle police while in the midst of a peaceful protest. A blinded Hawken was helped to leave the protest scene by Anita Roddick, founder of The Body Shop, and one of the few CEOs also on the streets of Seattle helping people that day.

    Hawken's article also outlines many of the concerns about the WTO held by the diverse protest groups. Hawken: "With that much contention inside and out of the WTO, one can rightly ask whether the correct question is being posed. The question, as propounded by corporations, is how to make trade rules more uniform. The proper question, it seems to me, is how do we make trade rules more differentiated so that different cultures, cities, peoples, places and countries benefit the most.

    "Those who marched and protested opposed the tyrannies of globalisation, uniformity and corporatisation, but they did not oppose internationalisation of trade. Internationalism means trade between nations. Globalisation refers to a system where there are uniform rules for the entire world, a world where capital and goods move at will without the rule of individual nations. Nations, for all their faults, set trade standards. And nations do provide, where democracies prevail, a means for people to set their own policy, to influence decisions, and determine their future. Globalisation supplants the nation, the state, the region, and the village. While eliminating nationalism is indeed a good idea, the elimination of sovereignty is not."

    ( Paul Hawken's "N30" — 30 November 1999 dispatch from Seattle on the WTO, police tactics, and corporate power is available in the internet at

    Source —

    rifkin2.gif - 11470 Bytes Jeremy Rifkin, best-selling author of The End of Work and President of the Washington-based Foundation on Economic Trends, is to publish a new book next month. The Age of Access focuses on the shifting trend from "ownership" to "access", and how this is transforming business and employment today.

    In The End of Work, Rifkin argued that computers, robotics, telecommunications and biotechnologies are fast replacing human beings in virtually every industry and workplace. In The Age of Access, he goes further, showing how new technologies are even eliminating concepts of "property" and "ownership" from our lives. In this new era, according to Rifkin, we will buy enlightenment and play, grooming and grace, and everything in between in the form of purchased experiences.

    Rifkin: "Imagine a world where virtually every activity outside the confines of family relations is a paid-for experience — a world where traditional reciprocal obligations and expectations are replaced by contractual relations in the form of paid memberships, subscriptions, admission charges, retainers and fees..."

    For the first time in modern history, Rifkin argues, ownership of physical property is seen as an albatross, and intangible ideas and expertise are the chief generators of wealth. This dramatic shift affects corporations as well as consumers: the world's major companies are quickly shedding property holdings, factories, and other assets in favour of outsourcing and leasing.

    Rifkin warns of a dawning era in which giant access-providing companies are profiting from every aspect of human experience, while consumers own nothing. "In this new economy, access sellers will finally be able to commodify all of human experience..."

    Source — editorial review of "The Age of Access: How the Shift from Ownership to Access is transforming capitalism" by Jeremy Rifkin (pub JP Tarcher ISBN 1585420182)

    France. February 1st saw the introduction of France's new 35-hour working week laws. In the face of 10% unemployment, France passed this revolutionary labour reforms in order to create jobs and increase leisure time which should, in turn, create more jobs. It has done this by making overtime rates so high that employers can not afford to pay people for more than 35 hours. The workers haven't lost any money because they must still be paid the same amount as they were previously.

    The immediate result: chaos on French roads as truckers mounted dozens of blockades across the country to protest against the implementation of the scheme. The truck drivers complain that a recent deal between the government and their employers means that they will not reap the benefits of the nationwide transition to a shorter working week.

    • Some large companies with factory employees have embraced the changes. The Renault car manufacturer says it can continue to profit even after taking on 3,000 new workers. They've done this by focusing on greater worker productivity. With better technology and increasing worker concentration, Renault aims to cut the time is takes to assemble a vehicle from 18.5 hours to 15 hours this year. And staff are now getting the equivalent of 10_15 extra days off a year with no drop in pay.

    But French small business owners see big problems ahead when they have to comply with the new laws in 2002. Small firms say they will clearly make less money if they send their staff home early but still have to pay them the same. If they take on another worker to fill the gap, but not increase their sales … the new worker would just become an added cost.

    Source — The Daily News 1 February 2000, France cuts work week, but not all happy by Catherine Bremer in Paris; Le Monde Diplomatique January 2000 A production-line dictatorship by Gilles Balbastre and Stephane Binhas

    • Frustrated by management's failure to implement the 35-hour week in their workplace, dozens of postal workers in the French city of Besançon last week marched to the local police station to lodge a complaint over the "theft of free time". The police commissioner replied, in all seriousness, that he couldn't help them since there was nothing in the criminal code about free time theft.

    The 190 postal workers then decided to take work time reduction into their own hands, and started working a 35-hour week unilaterally. There was one major problem with this do-it-yourself reduction of work time — the workload hadn't changed. Their solution? The workers decided to stop sorting and delivering junk mail. According to the French newspaper Liberation: "…Now, there's a postal disruption that the public is bound to appreciate."

    Source — from the original article in French, see Liberation, January 22-23, 2000:

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