Essential Information on an Essential Issue
29 January, 2001
Robert Reich on the future of success
- NEW HEAD FOR JOBS MACHINE
Neil Mackay, former managing director of Budget Rent-a-Car, has been appointed
chief executive of Industry New Zealand. He will oversee Jim Anderton's "jobs machine"
programmes allocating $330m to regional business initiatives over the next three years.
Mackay has had a career in both the private and public sectors. Before Budget Rent-a-Car,
he worked at Internal Affairs as general manager of business services and director of the
heritage and identity group. Before that, he was chief accountant at National Mutual (now Axa) and
he has also worked in companies in Hong Kong, Britain and Australia.
Source New Zealand Herald 22 January 2001 "Industry NZ Head relishes job challenge" by Daniel Riordan
- CALL FOR ACTION ON CHILD POVERTY
With the "Closing the Gaps" initiatives now being re-defined as referring to all New
Zealanders, a group of academics is urging the government to set its sights on ending child
poverty. According to the Child Poverty Action Group, half of all Pacific Island children, a third of
Maori and one in 10 Pakeha children "often or sometimes" run out of food because of a lack of money.
The Action Group has just released a report, entitled
"Our Children: The Priority for Policy".
It believes that children are under-represented in NZ official data and formal statistics, despite
the fact that around 25% of New Zealanders are aged under 15. The report finds "
disturbing picture of poverty among children as a group, placing New Zealand among some of the
least successful countries in the international league of child poverty."
- Child Poverty Action wants to see
a more progressive tax structure similar to Australia and most Nordic countries (they
recommend raising the ceiling of the 15% tax rate from $9500 a year to $12,000)
an increase in the threshold of $80 a week which can be earned by beneficiaries to $130
the Inland Revenue Department obligated to ensure families access their tax credits.
free medical and dental care provided for all children up to the age of 18
a Winz amnesty on beneficiary debt
more generous provision for before and after-school care.
- The Action Group has also called on government to immediately establish an
official measure of poverty. Claire Dale, one of the authors of the 49-page report, says that there
has never been an agreed poverty line in this country, "... so trying to discuss this gets very
tangled and difficult. We need to make a decision about how we are going to measure poverty so we
can track it over time."
Source Stuff Auckland News 22 January 2001 "Ease child poverty with tax changes _ academics"; Sunday Star Times
21 January 2001 "Change taxes to help children _ report" by Fleur Revell; The Dominion 22 January 2001 "Bleak report on
child poverty"; New Zealand Herald 22 January 2001 "Changes to tax system urged to fight child poverty" by Gregg Wycherley;
- NZ POVERTY MEASUREMENT STATISTICS
The de-facto measure of poverty in New Zealand can be found in the work of the
New Zealand Poverty Measurement Project. In November last year, the Measurement Project
released its latest figures showing that a third of all children and a fifth of all New Zealanders are
living in poverty.
The figures, compiled for the Project by Statistics New Zealand, showed that 20% of all
New Zealanders lived below the poverty line in 1998, the latest year from which figures were
available. Of that 20%, 54% were working age adults, 44% children, and 11% elderly.
A further breakdown of the figures shows that 38% of Pacific Islanders, 28% of Maori and
12% of Pakeha/Europeans were living in poverty. And a disturbing trend is that about 42% of
"other" people mostly immigrants and refugees were also impoverished.
- The Measurement Project research sets the poverty line at 60% of the median
equivalent household disposable income. Statistics were calculated both before and after housing costs
had been paid, with pre-housing cost figures showing only 15% of New Zealanders living in poverty.
In a comparison of income levels, statistics gathered from 1984 to 1998 show that the
after tax income of the wealthiest 10% of households increased by 43% over that period. The
bottom 50% of households dropped by 14%.
- Social policy researcher Charles Waldegrave has also released the results of a more
general survey of low household incomes. Interestingly, the survey dispels the common myth that
poor people waste their money on drink and gambling. According to the figures, only 5% drank
more than a glass of alcohol a day in the week they were surveyed, while less than 12% had
indulged in any form of gambling other than buying a Lotto ticket.
Other key household results show that
44% paid 40% or more of their after tax income on rent or a mortgage;
40% of households were overcrowded (Pacific Island 60%, Maori 51%, Pakeha 22%);
48% had been unable to provide a meal for their family at least once in the previous
56% had family members who didn't visit a doctor when necessary in the previous year;
47% had at least one member with a chronic illness;
64% were in debt; and
households coped through support from family (42%), growing their own vegetables
(33%), using community support such as foodbanks (24%), or doing odd cash jobs (22%).
- Charles Waldegrave is hopeful that recent measures from the Labour/Alliance
government will have a significant impact on the poor. His call: "In two years' time when we measure
things again you can fully expect to see a substantial decline in the numbers living in poverty..."
Waldegrave predicts that the introduction of income-related state housing rents last
December will be a key component: "Housing is the biggest cause of poverty. Statistics like this have
been important in the advice given to government to go for housing in their policy restructuring. It's
a costly exercise they're building up housing stock and making it more affordable but it
will put $20 to $30 extra in the pockets of families per week. "
Waldegrave also points to the government's restoration of superannuation levels to 65% of
the average income in April last year. When the National Government announced
superannuation cuts to 60%, researchers calculated the move would put 250,000 elderly into
poverty. Waldegrave: "This government has revised that move and, again, it's a very costly policy, but
it has prevented 250,000 elderly people going below the poverty line."
Source NZPA 18 November 2000 "Third of NZ children in poverty, statistics show""
- MAHAREY: WE WILL MEASURE OUR PROGRESS
Social Services Minister Steve Maharey comments that the child poverty report makes
a number suggestions that are currently being considered by the Government. He says the
government is already looking into benefit reform and he supports raising the threshold of what
beneficiaries can earn before money was deducted.
Maharey also says that the government is looking at establishing an official measure of
poverty. In delivering his inaugural "State of the Nation" address to the Takaro Rotary Club in
Palmerston North, Maharey reported that the government is working on a series of indicators which
will allow it to chart the social wellbeing of the nation alongside the development of the
economy. Maharey: "Still too many people lack basic literacy skills, too many remain in poverty and
too many people live isolated lives away from their communities. This must change and we
must have proper tools to measure our progress ..."
Sources Newsroom 22 January 2001 "Child poverty report" by Matt Rilkoff; "The state we're in: Economic growth
and social equity" inaugural State of the Nation address to the Takaro Rotary Club, RSA, Palmerston North 23 January 2001
- WORKING HOURS AND THE FRENCH SHORTER WORKING WEEK
Working hours. The average number of hours worked each week by New Zealand
employees in 1999 was 38.72 hours, a figure virtually unchanged in the past decade. But if you
distinguish between full-time and part-time workers, the average number of hours worked by
full-time workers is longer: 45.06 hours.
The construction sector had the longest hours (44.49 hours), and men worked longer hours
in paid work than women 40.43 hours, and 36.74, respectively. Aucklanders worked
longer (39.02 hours) than Wellingtonians (38.05 hours).
- Council of Trade Unions president, Ross Wilson, agrees that a "rational approach"
to redistributing working hours is needed. While he describes the French approach in bringing in
a 35-hr working week (see the last issue of The Jobs Letter) as "admirable in principle", he
told The Dominion that he is not sure whether it would suit the New Zealand context.
However, Employers Federation chief executive, Anne Knowles, believes that following
France's example would have "a tremendously detrimental effect", and would impose significant costs
on NZ businesses. Knowles: "The best way to boost employment is to get the economy
performing better, not limiting your view to "there is X number of jobs". Wage costs in France are
estimated to have increased more than 11% a cost that employers in the small New Zealand
economy would find impossible to absorb or pass on.
Knowles suspects the fall in unemployment in France has more to do with an improving
world economy than any reduction in working hours: "Probably the biggest increase in
employment from reducing hours has come from the increased bureaucracy needed to police it."
- Employment Minister Steve Maharey says that proposals for shorter working hours
will only succeed in New Zealand if productivity increases at the same time. His view is that
"working smarter" and exploiting new technology will have to go hand-in-hand with proposals
for shorter hours. Without a productivity guarantee, he is reluctant to see New Zealand follow
the French example.
Maharey agrees that there are specific groups of workers who are working "extraordinarily"
long hours, while others have too little or no work ... but he sees the problem is more that work
is divided unevenly. Maharey: " We have a work-rich/work-poor divide but I don't think it
as simple as redistributing it by regulating work hours. Often people are shut out of work
because they lack skills which regulating hours would not fix."
Maharey reports that the "Futurework" project being presently undertaken by the Labour
Department is looking at countries and companies (such as Volkswagen) that have shortened
working weeks. The project is also looking at trends such as teleworking and the development of
- Economic Development Minister Jim Anderton believes it is simplistic to say that
cutting working hours can also cut unemployment. Anderton: "The challenge for us is to create
jobs. Last year we got below 6% unemployment for the first time since 1988 and that was done
by creating more jobs. You can't create more jobs artificially."
Anderton told The Dominion that, as a businessman, he saw evidence that productivity
could actually be boosted by reducing working hours. His business used to extend long weekends
three days to four: "Theoretically the employees worked five less days in a year, but production did
not decrease. It showed us people can do in four days what they would take five to do in other
Alliance policy is to extend the existing three weeks' minimum paid holiday to four weeks
in effect, compelling people to take more time off.
Source The Dominion 17 January 2001 "Why short week is a tall order" by Helen Bain
- AUSTRALIA NEW MINISTER, NEW STICK
The unemployed in Australia have been put on notice to expect to do more for their
welfare payments. The incoming Australian Employment Minister, Tony Abbott, is keen to see
them involved in structured activities for two days a week, to prevent them from becoming
"work wary". In an interview with the
Sydney Morning Herald, Abbott reiterates his
often-expounded belief that people who are unemployed need to be treated with a stick rather than a carrot,
and that government intervention is needed to ensure that they use their time appropriately.
Mr Abbott , who will be sworn in at the end of the month, says he would not tolerate
avoidance by the unemployed of what he describes as their "mutual obligations". Abbott: ""The idea of
any excuse will do, I reject that. You have to be firm but fair."
Abbott comes into the job as Australian employment growth is slowing, the existing
participation in work-for-the-dole is relatively low, and further changes to the welfare system are looming.
Under the new welfare guidelines announced late last year, people who have been
unemployed for more than six months must do some activity to qualify for full payments, with those under
40 eligible for work-for-the-dole. Activities can range from joining the Army Reserve to training
and literacy and numeracy programs.
- The Australian Council for Social Services (ACOSS) condemns Abbott's plans as
illogical and wasteful. ACOSS Deputy President Eleri Morgan-Thomas says a work-for-the-dole
scheme is not designed to get people into jobs, and is a political gimmick. She says the
government should be giving more money to existing programmes, to provide the unemployed with
education, training and job experience that is aimed at individual needs and the local job market.
- Acting Australian Opposition party leader Simon Crean also attacks Abbott's plans,
calling it harsh and "blaming the victim". Crean has called for the major political parties to work
together to help lower Australia's unemployment levels, instead of blaming the unemployed
for their plight. Crean: "What's really needed to help the unemployed is to widen the gap
between welfare and work and also encourage people to actually train while they are undertaking the
work experience. But the government has cut the training programs..."
Sources Sydney Morning Herald 15 January 2001 "Abbott to take big stick to `work wary'" by Tom Allard and
Andrew Clennell; ABC News Online 15 January 2001 "Crean calls for co-operation in tackling unemployment"
- MOVE TO CHANGE UNEMPLOYMENT MEASURE
Australia's chief statistician, Dennis Trewin, believes the official measure of
employment does not reflect the true jobless rate and he is pushing for his international colleagues to impose
a more realistic measure. He says this is needed because the current definition set by the
Geneva based International Labour Organisation (ILO) is flawed. Under this definition used by
Australia, New Zealand and most other developed countries people only have to be in paid
work for one hour a week to be classified as "employed".
Trewin argues that changing the definition of "employed" from one hour of paid work to
10 hours a week would be a better measure. He is aware of the political implications of the
change: under such a new definition the unemployment rate in Australia would increase from 6.6 to 9
per cent. Trewin cautions that the international community would have to agree to any change
before Australia adopted it
and he expects that the ILO may agree to the new measure within
- The latest Bureau of Statistics figures show that 212,100 Australians were counted
as having a job even though they worked for less than 10 hours and many of these people
received unemployment benefits. Under a new "definition" these people would be counted as
unemployed, increasing the number searching for work in Australia from the present
unemployment estimate of about 640,000 to almost 850,000.
Source The Melbourne Age 22 January 2001 "Jobless yardstick wrong: statistician" by Josh Gordon
- UK RESEARCH FINDS NO DEAL
Britain. A National Centre for Social Research study, commissioned by the British
Government, has delivered an embarrassing verdict on New Labour's £5 billion "New Deal"
programme. The study finds that as many as 80% of the jobs filled for six months by the
long-term unemployed were likely to have been created anyway.
The study surveyed 3,209 organisations that hired the long-term young and adult
unemployed and found that as many as one in three New Deal recruits were not retained by employers at
the end of their six-month period. Almost half the young people participating in the programme
were no longer employed by the company within nine months of starting. 72% of employers
surveyed reported that their involvement in the programme made no direct impact on their activity
and 52% admitted that their main motive in agreeing to participate in the programme was to
reduce labour costs. The average gross starting hourly wage paid to young people under the scheme
was £3.50 per hour, which is 20p less than the national minimum wage.
Source Financial Times 10 November 2000
- FEMALE ACHIEVEMENT FROM STRENGTH TO STRENGTH
Also in Britain, the New
Statesman reports that this year, for the first time, more
UK women than men got first-class degrees. It notes that female educational achievements are
going from strength to strength, in a world where knowledge analysis and interpretation are crucial
for economic success.
Writer Geraldine Bedell speculates that one reason for the success in first-class degrees may
be that students are now given greater credit for the year's coursework as a part of their
examinations. Bedell: "In the past men have been able to outflank us with the occasional bold flourish
[at exam times]
it has been possible for them to survive on 98% laziness and 2% chutzpah
Source New Statesman 22 January 2001 "When women rule the world" by Geraldine Bedell
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