Essential Information on an Essential Issue
8 February 2000
Statistics That Matter for the December 99 quarter
- UNEMPLOYMENT FALLS
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]
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
- VOICES: ON THE JOBS FIGURES
"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"
- MAHAREY SACKS WINZ ADVISORY BOARD
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
- "CUSTOMERS" LOOKING FOR ANOTHER NAME
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
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
- CLARK TAKES ON THE MAORI GAP
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
- HOUSING CAUSE OF HIGH POVERTY
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
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
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
- MOSGIEL CLOSURE SPARKS ANDERTON
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
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
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 "
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
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
- PAUL HAWKEN IN SEATTLE
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
"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
- JEREMY RIFKIN'S NEW BOOK
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
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 amazon.com 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)
- 35-HOUR WEEK IN FRANCE
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
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
Now, there's a postal disruption that the public is bound to appreciate."
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