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    Essential Information on an Essential Issue

    Letter No.132

    13 October, 2000

    The government has announced further details of its plans for research into the future of work. Speaking to the Future Incomes conference in Palmerston North last month, Employment and Social Services Minister Steve Maharey announced the "Workforce 2010" project which will identify the challenges New Zealanders will face in the 21st century labour market, and indicate issues for government action.

    The research will be funded by the $2.09 million (over four years) provided for in the Budget, and will be undertaken by Department of Labour's Labour Market Policy Group (LMPG). Officials are due to report on their proposed work plan by the end of this month.

    The issues being investigated will include creating "family friendly" workplaces; expansion of equal employment opportunities throughout the workforce; introducing shorter working hours (including four day weeks) and job sharing; teleworking; new shift arrangements; week on week off contracts; voluntary shorter working weeks; career breaks and sabbaticals; time banking; employee ownership and co-operatives.

    Maharey : "Dramatic change has occurred in the New Zealand labour market over the past twenty years and all predictions point to this accelerating. New Zealand is a latecomer to the investigation of future work issues. Most other industrialised nations have been looking at the challenges posed by the new labour market and demographic changes for some time.

    "It is vitally important that we gain a clear understanding of issues such as the ageing our population and the increased use and availability of new technology. The challenge will be to use this work to develop effective employment policy which responds to the challenges of modern New Zealand society."

    Sources — Press Release 22 September 2000 NZ Government "Govt To Fund Research Into The Future Of Work" and "Future work and future incomes building a constituency for research and action" opening address to the Future Incomes conferenece, Palmerston North 22 September 2000

    At the Future Incomes conference, a number of the presenters spoke of the need to take more seriously the possibility of a Universal Basic Income (UBI). Some speakers called for more research and policy work on the concept in order to make real progress towards this goal. Conference convener Ian Ritchie called for a "national incomes policy" which set clear goals for our national progress towards a more equitable spread of income.

    Ritchie: " Until a few years ago the incomes policy was to ensure the nuclear family had enough to live on. That policy has been replaced by an individualised approach that is aimed at ensuring the top few get richer and the rest get further and further behind. I don't consider the current policy will produce a viable, sustainable society, and it needs to be changed ... The government's goal of "social cohesion" has been replaced by "social participation", with participation meaning "in the labour market". That simple shift is a profoundly degraded one. It needs to be reassessed."

    Source — "Investing in our own communities" paper by Ian Ritchie to the Future Incomes Conference 22 September 2000.

    Paul Callister's presentation to the Future Incomes conference concluded that despite a period of dramatic job loss from the mid 1980s to the mid 1990s, these losses did not continue through the latter part of the 1990s. Callister suggests that, contrary to reports in the popular media, the long-term employment data does not support the view that paid work in New Zealand is continuing to "disappear".

    He points out, however, that New Zealand society is showing signs of "both polarisation and diversity of experience" in labour markets, and that this has been occurring at the same time as income has become less evenly distributed across society.

    Callister: "At one end of the spectrum, there is an emerging small group of prime working aged people with high levels of education, who have high income and relatively secure, full-time jobs, and who generally live in neighbourhoods of "choice". At the other end of the spectrum, there are a small group of poorly educated people who tend to be excluded from the labour market and often live in neighbourhoods of "fate"."

  • Some further points from Paul Callister's paper:
    — Over the long-term, there has been a decline in male employment and an increase in female employment. The loss of full-time jobs between the mid 1980s and early 1990s was particularly dramatic for prime working-aged men.
    — While there still remains an employment "gap" between men and women, particularly in terms of full-time work, in the decade 1986 to 1996 formal educational qualifications became a more powerful predictor of a person's employment status.
    — By the early 1990s, prime working-aged men and women without a formal educational qualification faced major disadvantages in the labour market.
    — The data that is available does not support the idea that there has been a widespread shift away from skilled jobs to low skilled "McJobs". A major problem, in fact, is a shortage of low skilled (but relatively well paid) work.
    — There is also some evidence that work is becoming less evenly distributed on a geographic area basis. Census data show that in the 1990s there were extremes of work-rich and work-poor residential areas. In addition, using various measures, the proportion of work-poor areas increased between 1986 and 1996.

    Source — "Changes in the Distribution of Work and Income in New Zealand" paper by Paul Callister to the Future Incomes conferenece Palmerston North 22 September 2000

    The Ministry of Social Policy has released a research paper, by Labour Department senior researcher Simon Chapple, which questions commonly held views on Maori disadvantage. Over the past two weeks, the paper has stirred up the national debate on the government's "Closing the Gaps" strategy.

    Chapple is critical of the view that gaps between Maori and pakeha are widening ... and he points to a range of statistics which show that levels of disparity are stable or are falling. Chapple: "A frequently articulated belief is that over the last decade the relative social and economic position of Maori has worsened ... This belief is a misconception. Take three indicators of socio-economic outcomes that most of us would consider to be key: employment rates, median incomes and education levels. By all these indicators, gaps closed over the 1990s."

    Chapple says that using household labour force data that contrasts Maori/Pakeha employment rates is the best single measure of labour market disparity. These figures show that employment rate disparity peaked in the early 1990s at over 14% and since then has fallen to the current gap of 6%.

  • Chapple says that, contrary to popular rhetoric, Maori people do not share a common experience of socio-economic disadvantage. His verdict: "Overall, much of the gap between Maori and non-Maori reflects their over-representation amongst poorer socio-economic classes. This over-representation is itself a function of relatively recent Maori urbanisation at a time when relative prices created strong incentives to remain in low skilled occupations and not acquire education. In addition, there is strong evidence that Maori with higher levels of skills and education perform little differently from their non-Maori counterparts, while low-skilled and educated Maori perform much worse than low skilled and educated non-Maori. These findings directly suggest the problem of disparity may be sub-cultural, not ethno-cultural."

  • Chapple is also critical of government policies and funding that is increasingly going to Maori people and Maori providers ... instead of being targeted to all people in need, regardless of ethnicity. Chapple: "Broad-based policies which target the Maori population, which may be thought to close the gaps (such as fisheries settlements, other treaty settlements, cheap access to the radio spectrum, etc) risk being captured by the considerable number of Maori who already have jobs, skills, high incomes and good prospects..."

    "Maori socio-economic disparity" by Simon Chapple, Senior Research Analyst, Labour Market Policy Group, paper for the Ministry of Social Policy Seminar 15 September 2000. Available on the internet at

    " Mr Chapple talks of capture of resources by Maoris who already have jobs, skills, high incomes and good prospects. The government has no interest in Gaps funding being captured by those who have more of an interest in litigation than mitigation."
    Steve Maharey, Minister of Social Services and Employment

    " The Chapple report shows that the Gaps are closing, not widening. It shows that where you live, your age, gender, education and skills explain how well you are doing not race. And it is causing huge ripples in the civil service. Predictably, Te Puni Kokiri has produced a report denying it. The grievance industry is in a complete tizz. They can't fault Chapple's research and their lucrative incomes are at risk."
    Richard Prebble, ACT Party leader

    " Nobody is denying that there are unacceptable health, education and economic outcomes for too many in lower-income groups. But the government continues to present its solution as the "Closing the Gaps" strategy ...

    " Could it be that the traditional Maori marae-based model, with its denial of private property rights and promotion of lineage over meritocracy is just incompatible with the achievement of economic and social outcomes that mainstream Western capitalist democracies achieve?"
    Gareth Morgan, economist and chief executive of Infometrics

    " Mr Chapple's paper is one of those rare instances of a single, well-researched document fundamentally altering government thinking. Conceptually and politically flawed, the Closing the Gaps policy was doomed from day one, and Mr Maharey's foolish attempts to rewrite history will not save it."
    Chris Trotter, political commentator.

    " Mr Chapple's paper is the sort of advice to Ministers that one lives in hope for. Free, frank and fearless.

    " Slogans may be easy to hide behind but there's no substitute for hard analysis. Without it, we could cause ourselves as a nation much unnecessary heartbreak by trying to solve the wrong problems and creating new divisions where there are plenty of real ones crying out for attention..."
    Simon Upton, Upton-on-line

    Future Incomes Conference papers will be available, later this month, at:

    These papers include:
    David Tolich, Public Policy Consultant, "What are the issues?"
    Paul Callister, Economic and Social Researcher, "Changes in the Distribution of Work and Income in New Zealand"
    Srikanta Chatterjee, Massey University, "Income Inequality in Colour: Ethnicity and Income Shares in New Zealand"
    Peter Conway, NZCTU Economist, "Wages and Low Incomes what are the trends?"
    Celia Briar, Massey University, "Women and the Future of Work and Income"
    Angela Baker, Career Services Rapuara, "What do we tell our kids the career question?"
    Ian Ritchie, Palmerston North Poverty Action Group, "Investing in Our Own Communities"

    The Ministry of Social Policy / Economist Conference papers can be found at:

    These papers include:
    Simon Chapple, Department of Labour, "Maori Socio-economic Disparities" A consideration of the analytical and empirical issues arising from policy debates on Maori socio-economic disparities.
    Dave Mare, Department of Labour, and
    Dean Hyslop, Department of Economics UCLA, "Understanding Changes in the Distribution of Income" An analysis of changes in distribution of gross household income and income inequality over the period 1983-1998.
    Bob Stevens, Victoria University, "Poverty and Employment" A comparison of policy and outcomes for single mothers between the United States and NZ.
    Justin Coutts, Treasury, "Tax Credits and Work Incentives for Low-income Families" Why we need work incentives and why use tax credits to create them.

    The Race Relations Office has released its report into the shooting by the Police in Waitara of 23-year old Maori man Steven Wallace. The shooting generated a national debate on whether or not the shooting was an act of racism by the Police, and it also galvanised the Waitara and Taranaki communities to re-examine the historical and present-day relationships between Maori and Pakeha.

    But the Race Relations report does not just report on racial tension in the region and recommend what to do about it. The report also portrays Waitara as a case-study of the effects of growing unemployment and deprivation on a small town in the late 1990s. In some ways this report serves as a snapshot of many similar communities throughout New Zealand at this time.

  • The Race Relations Conciliator, Dr Rajen Prasad, says that when investigating the tragedy of Steven Wallace's death, many of the people who spoke to him went beyond this incident to also recall the impact of Taranaki history and the recent destruction of Waitara's economic base.

    The figures: Waitara has a population of about 6000 people. It is estimated that between 1985 and 1998, 1300 jobs were lost from significant plant closures. In total, more than 2000 jobs were lost in a 15-year period. 49% of Waitara's labour force is now unemployed. While 38% of Waitara's citizens are Maori, 45% of the local unemployed are Maori. Waitara has the lowest average household income of any region in the New Plymouth District. At present, some $600,000 a week is transferred, by way of various social welfare benefits, to people in Waitara. Community wage, domestic purposes, invalids and youth benefits account for almost half of this sum.

    Dr Prasad: "People lamented the losses of the past and recalled the glory days when Waitara had a vibrant economy and strong social institutions. Such a long period of economic decline has had the effect of destabilising the usual infrastructure a community develops as part of its social organisation. For Waitara, we are told, its well understood hierarchy was essentially destroyed with the closure of the freezing works and the car assembly plant. The effects on formal and informal authority structures, access to a steady income and a changing social order has had the effect of altering long-established authority structures. This effect, in turn has eroded the standing and mana of many people, with little to replace it."

  • Dr Prasad reports that a number of leaders he spoke to in Waitara were not convinced that sufficient attention has been given to the long-term development of the town's economy over the past 15 years. The leaders could not see how the economic development of Taranaki would benefit Waitara in general and Maori development in particular. And they reported frustration at not being consulted or sufficiently involved in economic or social planning for the town and the region.

    Dr Prasad: "What was instructive and thought-provoking was the depth of feeling expressed about the institutions that serve Waitara. Many people felt that those in positions of power and decision-making were not listening to Waitara, leading them to conclude that it was a forgotten town and people..."

    Source — Dr Rajen Prasad, Race Relations Office report on the shooting of Steven Wallace September 2000

    Media Watch: The New Zealand Herald last weekend began a major new series "The Jobs Challenge" which examines New Zealand's response to job creation within the global economy. The series is the result of two months' research by senior writers Simon Collins and Mathew Dearnaley, and aims to look at how we can generate enough jobs for New Zealanders who want them and "...a standard of living which keeps those jobs and people here". Over the next four weeks, the newspaper will also examine policies that have been tried in the past, or are being used overseas, to generate high-paying work and reverse our long-term relative decline.

    Source — "The Jobs Challenge " Feature series in New Zealand Herald Part One 7-8 October 2000 by Simon Collins and Mathew Dearnaley
    jchal-sm.gif - 8265 Bytes

    Visit our "Jobs Challenge" page at for links to the New Zealand Herald Online articles in this series.

    " The context is global. For the first time in history, young people now see their future not primarily as the citizens of any country or empire, but as human beings who will choose where to live on the basis of their own economic, social and environmental values. In the past 15 years, restrictions on trade and capital movements have come down almost everywhere. Cheaper air travel, telephones and the internet have made people more willing to move. As a remote, island region, New Zealand always has lost many of its brightest to big cities overseas. Globalisation means we are sure to lose more.

    " If we care for our young people, we will ensure that they are as well prepared as possible for that global world. Some will choose to live in New Zealand. They _ we _ may be drawn here, or drawn back, by family and cultural ties, other social factors such as a caring and tolerant society, a good education system, a relatively unspoilt environment, space and the weather, as well as reasonable living standards. So the economic challenge for those who choose to live here is not necessarily to earn as much as people in New York or Silicon Valley, but to create businesses and social organisations that generate whatever living standards we seek for everyone who wants to work here. How we can lift our standards, and share them with everyone who lives here, is the challenge this series will address."
    from "The Jobs Challenge" feature series, New Zealand Herald 7 Oct 2000

    Industry New Zealand became a legal entity on 6 October 2000, a week after its first Board members were announced. The board members are: Craig Boyce, of Smiths City Group; Shane Jones, Poutama Trust and Treaty of Waitangi Fisheries Commission; Don Riesterer, Mayor of Opotiki; Bridget Wickham, of the Great New Zealand Business Venture; Maxine Simmons, of Immuno-Chemical Products and FoRST; Gregory Fortuin, of AXA Corporate Superannuation Services; David Maloney, of Interlock Group and the Manufacturers Federation; and Rex Jones, former secretary of the Engineering, Printing and Manufacturing Union.

    Economic development Minister Jim Anderton describes the members of the Board as leaders with a very strong background in linking business and regional development. The Board members are appointed for a term of up to three years, and Craig Boyce has agreed to act as chair until a permanent chair takes up the position early next year.

    Source — Press Release New Zealand Government 26 September 2000 "Industry New Zealand Board Appointed"

    An "Atlas" of deprivation in New Zealand has been produced by David Bateman Ltd which aims to "raise the awareness of the impact of socio-economic deprivation on local communities". The atlas is based on information from the 1996 census and provides a visual picture of all neighbourhoods and communities throughout New Zealand.

    The data in the Atlas is based on a measure developed by the Health Services Research Centre and includes not only income levels, but also other factors such as employment status, qualification levels, home ownership, living space in each household, and access to telephones and transport.

    In reviewing the Atlas, the NZ Christian Council of Social Services says that it provides a useful tool to work alongside local experience and research. NZCCSS: "It changes the focus from simple, individual responses to deprivation to trying to find local area solutions. It enables social service providers to immediately see areas of highest need and to consider the need to target their services to these areas..."

    "Degrees of deprivation in New Zealand an atlas of socio-economic difference" $39.95 available from the publishers David Bateman Ltd, P.O.Box 100-242, North Shore Mail centre Auckland 1330 Fax 09-415-8892

    Source — NZCCSS Newsletter October 2000 "Statistics about Deprivation"

    Last month, the leaders of the Mayors Taskforce for Jobs signed up to a "Memorandum of Understanding" with government ministers at the Beehive. The Memorandum is an agreement that central and local government will work in partnership on their shared employment objectives. Economic Development Minister Jim Anderton and Social Services Minister Steve Maharey will meet with the Taskforce every three months to review progress.

    In the Memorandum, central government agrees to ensure that "barriers are removed where possible" so that appropriate, innovative and flexible decisions can be made at the local level. Also, the Mayors and central government agree to work together to promote new solutions to unemployment "which reflect the changing nature of work in our country".

    The Mayors have agreed to work with central government in assembling a package of programmes to assist community development initiatives, and to develop and support community entrepreneurs. This package is likely to include support for:
    — building the capacity of local people and community development agencies
    — obtaining advice or expertise to assist in regional/community strategic planning initiatives
    — re-thinking government expenditure in the regions to improve outcomes
    — funding for specific community/regional development initiatives.

    The Mayors will also participate in the development of regional/local action groups, which will develop clearly articulated long term strategies to work on "whole of government" solutions in their areas. The Mayors will promote close co-operation between the Ministry of Economic Development and local economic and employment development organisations to minimise duplication and build on successful structures.

  • The Mayors core-group who were present at the sign-up included Garry Moore (Christchurch), Claire Stewart (New Plymouth), Jenny Brash (Porirua), John Chaffey (Hurunui), Basil Morrison (Hauraki), Jill White (Palmerston North) and Don Riesterer (Opotiki).

    Government Ministers who were present at the sign-up included Jim Anderton (deputy PM, Minister of Economic Development, Minister for Industry and Regional Development), Steve Maharey (Minister of Social Services and Employment), Sandra Lee (Minister of Local Government) and Parekura Horomia (Minister of Maori Affairs).

    More information on the Beehive meeting and details of the Memorandum of Understanding can be found at the Mayors Taskforce website at

  • At the time of signing the Memorandum, 21 Mayors from around the country were represented on the Taskforce, representing over a million New Zealanders. Each local council is paying a levy of 5c per ratepayer (up to a maximum of $5,000) in order to join the action group. The government (through the Ministry of Economic Development) has also contributed $80,000.

    Notable by their absence at this stage: any Auckland Mayors. Only George Wood from the North Shore has attended a Taskforce meeting so far ... and other Auckland Mayors have told local media that, while not ruling out some involvement with the Taskforce, they are preferring for now to concentrate on jobs and business development initiatives on their own turf.

    Taskforce convener, Christchurch Mayor Garry Moore, says he is confident his Auckland counterparts will join in once they see the first fruits of the new alliance between central and local government leaders. Moore: "Auckland has always been a bit slow joining these sorts of things. I know it's hard for people to get their head around what we are doing, but I'm sure sanity will prevail..."

    Sources — "Memorandum of Understanding between Mayors Taskforce for Jobs and Central Government";; New Zealand Herald 9 September 2000 "Auckland Mayors lukewarm on job creation taskforce" by Mathew Dearnaley

    " What we are most concerned about are the long-term trends on work and income in our communities. The parties to this memorandum affirm that there is no continuing justification for the `waste of New Zealanders' through unemployment. There needs to be a concerted leadership effort at both local and central government level about the future of work and livelihood and the creation of more opportunities for our children's children.

    " The jobs of the future will certainly still come from new business opportunities. However, future employment will also be driven by our collective choices to value the new work that needs to be done and ensure Maori and Pacific Island people also have access to these new work opportunities. This will require a shift in thinking about what we value and the parties can play an important governance role in leading these choices on behalf of our communities."
    from the ;"Memorandum of Understanding" between the Government and the Mayors Taskforce for Jobs.

    " The Government and the Mayors Taskforce for Jobs recently recorded shared principles and commitments in a Memorandum of Understanding. The Memorandum sets out the goals of central government, and of the Mayors Task Force. It states that the Mayors Task Force is committed to two goals:
    — Goal one: By 2005, no young person under 25 years will be out of work or training in our communities, and
    — Goal two: By 2009, all people in our communities will have the opportunity to be in work or training

    " Now one response to goals of this kind the risk averse response would have it that, for central and local government, these goals are heroic, but irresponsible there are too many variables that can't be controlled, the influence of exogenous factors unknown etc. This response would have it that any progress towards meeting these goals, however significant, would constitute a failure if the goal had not been fully realised.

    " This response would have it that it would be somehow dishonest to invite the community to participate in a project of this kind if there was any risk of the goal not being achieved. It might also have it that setting a goal that is not credible risks alienating those that you are seeking to work in partnership with.

    " I disagree. I think that these are good goals.

    " Let me use a sporting analogy. There is nothing wrong with a team of rugby players or netballers going out in search of playing the perfect game. I don't know of any player of note that has come off the field or the court claiming to have played the perfect game. I'm not suggesting that we debase politics and public policy to the point where everything is couched in sports marketing terms, but I am suggesting that there is nothing wrong in setting the sights high. There is nothing wrong with building in some stretch. There is most certainly nothing wrong with seeking to advance a goal or a mission that has the power to excite, and indeed the power to empower.
    Steve Maharey, Minister of Employment, from "Acknowledging the centrality of employment", address to the National Conference of the Community Employment Group, Ellerslie Convention Centre, Auckland, 13 September 2000.

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