Towards An Employment Strategy
from The Jobs Letter No.130 / 8, September 2000
Extracts from the report on the uncompleted national employment strategy being developed last year
by Professor Ian Shirley, Peter Harris, Ganesh Nana, Dennis Rose and Kel Sanderson.
- ON AN EMPLOYMENT STRATEGY
When seen in the context of comparative countries, New Zealand does not have a
coherent employment strategy, nor does it administer an effective set of action plans for employment at a
regional level. The broad economic direction pursued over recent years has treated unemployment as an
`adjustment' problem while the agencies engaged in promoting employment at the local level seem
preoccupied with what is essentially a welfare focus rather than a programme aimed at expanding
- The purpose of an employment strategy is to maximise the employment capacities of the
country as a whole rather than concentrating on one section of the population or a narrow set of policy
measures. A general strategy aimed at boosting the capacity of the national economy is essential because,
in the case of Maori for example, the level of Maori employment and unemployment rises and falls
with the overall level of employment. This does not mean ignoring Maori unemployment in the interests of
a national employment strategy. A specific strategy is needed for Maori because the unemployment
rate for Maori tends to rise and fall at approximately three times the rate of general unemployment.
- Similarly, there is little value in seeing an employment strategy as a series of measures aimed
at getting the unemployed into work, if the economic policy environment is based on the assumption that
a 6% rate of unemployment is acceptable. An economic strategy that finds a 6% unemployment rate
as acceptable inevitably implies that an unemployment rate for Maori of between 15% and 20% is
- ON MACRO POLICIES
There is clearly a need for a shift in the macro economic policies of government so as to foster
an environment that encourages production and growth and this emphasis on a growing economy needs
to be reflected in a wide range of initiatives that enhance the productive potential of the regions and
the capabilities and capacities of the people. An employment strategy should provide a coherent
framework for linking these various measures so that there is general agreement on the overall goals being pursued.
It seems evident to us that a statutory base is required for employment in the same way that
we have a statutory base for controlling inflation."
- It seems evident to us that a statutory base is required for employment in the same way that
we have a statutory base for controlling inflation.
Consideration should be given to the appointment of a Governor or Commissioner for
employment, with responsibility for the monitoring and evaluation of an employment strategy. The employment
strategy should be a public document as well as an action plan to be administered by the
Commissioner/Governor of Employment.
- Specific targets should be set for employment and unemployment over a 3 to 5 year timeframe.
In this respect, we propose a reduction in the general unemployment rate by 2% over a period of 3
years. A specific target for Maori unemployment also needs to be established following the development of
an employment strategy for Maori.
- ON EXCLUSION
Exclusion from the paid workforce has placed increasing pressure on immediate and
extended families and where households have been unable to provide this support government has become
the primary means of support. In 1985, 8% of working age people were in receipt of a benefit - by
1996, the percentage had risen to 21% of working age people, or 400,000 individuals. In 1985, 12%
of children were living in households receiving a benefit - by 1996, 30% of children were in
government assisted households, with Maori more than twice as likely as non-Maori to be reliant on
government benefits as the main source of income.
- It becomes clear that this pattern of development will not change unless there is a clearly
articulated strategy to pursue alternative outcomes, with widespread support from the government and
private sectors. As labour market projections prepared for the Maori Employment and Training
Commission reveal, employment and labour force growth through the period 1996 to 2011 is likely to remain
unchanged. In other words, based on two different scenarios, and in the absence of any significant
policy changes, the labour market outcome over 15 years to 2011 is likely to result in a standstill - both
employment (as fulltime equivalents) and labour force growth is likely to be the same and this means
that the current mix of policies and priorities is unlikely to produce any sustainable reductions in the level
or composition of unemployment. The Employment Task Force made a similar observation in 1994.
- ON REGIONAL DEVELOPMENT
Another factor that reinforces the need for an employment strategy concerns the regional
variations in employment and unemployment and the dominance of metropolitan centres, especially
Auckland. On the basis of projections prepared for the Maori Employment and Training Commission,
the low growth scenario reveals that 60% of the projected change in the total New Zealand labour
force between 1996 and 2011 will occur in the Auckland region.
- The regional variations as exemplified by Auckland, illustrate the importance of policy options
and the need for a coherent employment strategy in much the same way that the population growth
strategy for Auckland has provided a framework for regional planning. In this respect the employment
strategy becomes, in effect, a national action plan based on social and economic realities and on the
achievement of clearly defined outcomes that are subject to evaluation and review.
- The physical infrastructure of the country is crucial to economic development but in some
regions a deterioration in the physical assets and utilities has become a barrier to business development
and employment. Auckland provides a graphic illustration in that traffic congestion, the provision of
water, the need to upgrade sewerage systems, and the overloading of electricity supply systems, have all
been identified as barriers to regional growth. Other regionally specific barriers include the water supply
in Hawkes Bay, electricity costs in Canterbury, and roading in Northland. Addressing these deficiencies
is of fundamental importance in developing an employment strategy with an effective regional base.
- One of the most consistent themes to emerge from the regional studies and workshops centred
on the opportunities that could be released by enhancing the productive sectors of the economy and
by expanding the capacities of the people. Although the realisation of these opportunities requires
investment in people, in industry, in business, and in the natural and physical resources of the country, it
also requires a shift in the policy environment and in the attitudes of the community.
In terms of policy, it means increased and continuing attention to the medium term goals of
sustainable economic growth, the promotion of exports, and the creation of employment opportunities. In
attitudinal terms greater recognition needs to be given to cooperative and collaborative approaches that
foster partnerships between public and private sectors. Subsidiary should be the guiding principle of
these partnerships, meaning that central bodies and authorities should only perform tasks that cannot
be effectively carried out at a local level by territorial authorities, enterprises and individuals.
- ON GOVERNANCE
Governance is a major issue at the regional level where there is confusion as to the
respective functions of local, regional and central government, and considerable uncertainty as to who should
carry responsibility for economic development and employment. The Resource Management Act
prevents Regional Councils from actively promoting economic development and yet these bodies have
substantial physical assets as well as personnel capacities that could be used more effectively in promoting
the development of the regions.
In Hawkes Bay for example, the Regional Council owns 92% of the Napier Port, substantial
forest holdings, water control systems and significant areas of residential land - yet the Resource
Management Act prevents the Regional Council from getting involved in economic development. In Auckland,
the Regional Growth Strategy represents a significant step forward in terms of regional development but
in this case the `growth strategy' is essentially a set of population and spatial projections without
" Subsidiary should be the guiding principle of
these partnerships, meaning that central bodies and authorities should only perform tasks that cannot
be effectively carried out at a local level by territorial authorities, enterprises and individuals."
- The different layers and responsibilities of government need to be renegotiated. Central
government should statutorily define its own role in a manner that complements the powers and
responsibilities of territorial authorities and while this could be achieved in a variety of ways, we favour the
appointment of Regional Commissioners with responsibility for facilitating a regional approach to governance
based on the principle of subsidiarity.
- ON A NEW DEAL
We suggest a `new deal' for particular populations and groups who are most affected by
unemployment. These active labour market measures would require:
- every unemployed young person (under 25 years) being offered a new start before reaching
six months of unemployment, in the form of training, retraining, work practice or a job. (Particular
emphasis needs to be placed on young people who have left school and are not employed).
- every unemployed adult (over 25 years) being offered a fresh start before reaching 12 months
of unemployment. The fresh start could include a similar range of provisions as outlined above with
particular emphasis on the contribution that older workers could make to economic and social
- The development and implementation of an employment strategy for Maori cannot be
separated from the economic and social development of Maori in both rural and urban areas. Although the
development of a national employment strategy will have a positive impact on Maori employment, a
specific strategy for Maori is an urgent priority.
The foundations of this strategy are evident in the economic development plans of Maori Trusts
and Urban Maori Authorities. Other elements are evident in the work of Te Puni Kokiri and the
Maori Commissions. Now that the preliminary work in developing a strategy for Maori has been initiated
by the Maori Employment and Training Commission, the drafting of a an Action Plan in consultation
with Maori Urban and Rural Authorities is the major task remaining.
Source "The Development of an Employment Strategy A Summary Document for the Maori Employment and
Training Commission" (January 2000) by Ian Shirley, Peter Harris, Ganesh Nana, Dennis Rose and Kel Sanderson.
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