No.159 10 January 2002 Essential Information on an Essential Issue

of key events over the last few weeks.






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14 October 2001

A four-day workweek may help to save jobs at German airline Lufthansa. Management is working with unions and employee representatives on ways to stem the company's financial losses without laying off staff. Chief executive Juergen Weber says measures being discussed include flexible working hours and a shorter working week.

8 December 2001

Treasury officials warned ministers that paid parental leave was likely to be counter productive and that costs to businesses would be passed on directly or indirectly to employees. The National Business Review says officials told Cabinet that paid parental leave was likely to cause slightly higher unemployment and wider gaps, both in the nature of employment and in the level of pay between men and women.

10 December 2001

Interest in NZ universities by overseas students has increased significantly. Foreign applications to Auckland University of Technology have increased 100% over the last year and applications to attend Victoria University increased 260% over the last 18 months.

Malaysian lawmakers approve flogging as a punishment for all foreigners who enter the country illegally to work.

11 December 2001

Job ads fell 8% last month, the biggest decline in two years. This is the fourth decline in as many months and ANZ’s David Drage warns that the last time this happened was in 1996 and was followed by a contraction in the number of people employed.

Nelson based iwi Ngati Koata Trust purchased Fresha Fisheries in New Plymouth in August and now intends to create up to 50 new jobs. Trust chief executive Roma Hippolite says the company is looking to expand its New Plymouth fleet. Women graduates are still earning less than men according to a survey commissioned by the University Vice-Chancellors Committee. Male university graduates earn on average $35,000 in their first jobs after graduation while their female counterparts earn $33,000.

The US economy has lost 800,000 jobs over the October/November period lifting the unemployment rate to 5.7%. British telecommunications group BT is to cut 5,000 jobs.

12 December 2001

Japan’s jobless rate hits a record high of 5.5%. This is the third month in a row that records levels of unemployment have been set. Toshiba corporation announces plans to cut 17,000 jobs. US interest rates drop to 1.75%, the lowest rate in 40 years.

13 December 2001

Alliance MP Laila Harre moves the first reading of the Parental Leave and Employment Protection Amendment Bill (paid parental leave) in parliament. The National Party votes against the bill and spokesperson Anne Tolley says National is likely to scrap the scheme if elected.

Treasury papers counselled government not to scrap work testing for domestic purposes beneficiaries. The proportion of employed sole parents increased from 28% to 45% during the ten years that work testing was in effect and Treasury told the government that removing work tests and replacing it with a case management system created a very real probability that the employment rates of solo mothers would decline.

Minister of Social Services and Employment Steve Maharey says an evaluation of the work test scheme shows that it was flawed and that the increased number of working sole parents had more to do with employment conditions and motivation of beneficiaries than work tests.

Green MP Sue Bradford says her party supports the scraping of work testing but may not support the bill if it continues in its present form. Bradford says a thrust of the bill is that if you are on the domestic purposes benefit your life goal must be to get paid work. Bradford: “If the government is serious about finding people work and cutting down on benefit payments then they should focus on finding jobs for the hundreds of thousands of registered unemployed who actually need and want work.”

An annual report on the student loan scheme dispels the assumption that students are abusing the interest free terms of the scheme according the University Students Association. The percentage of students uplifting loans increased from 50% to 55% from 1999 to 2000 but the average amount students borrowed remains almost unchanged.

Australia’s November unemployment rates drops to 6.7% from the 7.1% recorded in October.

14 December 2001

In Argentina, the pesois reported to be close to collapse.

17 December 2001

The 30 OECD nations collectively averaged zero growth in the last quarter of 2001.

Managed healthcare provider Aetna cuts 6,000 jobs worldwide.

19 December 2001

American Express is to axe 6,500 jobs from its travel business.

20 December 2001

Qantas Airlines plans to expand its NZ domestic services and as many as 80 NZ pilots and cabin crew are likely to be hired to staff the new services. NZ’s current account deficit, now at 3.4% of our gross domestic product, is at its lowest since 1994. In March 2000 the deficit was 7% of gdp.

Consumer confidence is high in NZ according to the quarterly WestpacTrust/McDermott survey. A Roy Morgan Research survey also found that more NZ’ers expect a prosperous 2002 than those expecting economic difficulty.

The Australian Department of Workplace Relations reports a 19.3% increase in job vacancies in trade occupations over the last year. In contrast, vacancies for professionals have decreased by over 20% over the same period.

The government of Argentina declares a state of siege in an attempt to contain rioting and looting triggered by the government’s austerity measures and rising poverty. The government, which has cut state employees pay and pensions by 13%, has imposed restrictions on cash withdrawals from banks. Waves of largely middle class protesters block the main thoroughfares across Buenos Aires. Argentina is in its fourth year of recession and appears about to default on its $US155 billion debt. The official unemployment rate is 18.3%.

25 December 2001

Christmas Day.

The Auckland City Mission provides Christmas dinner for 1,000 people filling every corner of the Town Hall. Demand for parcels from the Mission’s food bank was up 12% on last year.

27 December 2001

The Post Primary Teachers Association survey of school principals indicates significant shortfalls in teacher numbers. 60% of principals say that they expect to have more students enrolled in the coming year than they are able to hire staff for. ACT MP Donna Awatere Huata says the teacher shortage will worsen and that pumping more inexperienced graduates out of failing teachers colleges will not solve the underlying problems.

28 December 2001

The number of sheep shearers in NZ is diminishing and the Shearers Contractors Association says that if the present trend continues there will not be enough shearers in NZ to complete the annual clip. The number of sheep in NZ has halved over the last ten years but retirement has also lowered the number of shearers. Few young people are taking up the shears and Ron Davis of the SCA says that in two years the amount of work will overwhelm the remaining shearers.

Argentina suspends payment on foreign debt, launches a public works programme to create millions of jobs and pledges to introduce a new currency that will “reactivate the productive sector”.

31 December 2001

A report that says that having too many government departments, state owned enterprises and crown entities made it difficult to coordinate services. It said that 38 core state sector agencies, twice the number Britain has, created inter-agency “turf battles” and spread resources and staff too thinly. A reorganisation of the public service into seven to ten “super networks” has been recommended in “Review of the Centre”. Minister of State Services Trevor Mallard says the recommendations will not cause aggressive change and that any job losses would be done gradually over five years. Download “Review of the Centre” and related documents at www.executive.govt.nz/ minister/ mallard/ssc/index.html

1 January 2002

New Year’s Day

The euro becomes the new currency for 304 million Europeans. It now replaces the currencies of 12 of the 15 European Union member countries. This the biggest currency change in history and is the first time since the Roman Empire that Europe will have a single currency.

2 January 2002

The Ministry of Health reveals the extent of shortages of health professionals in NZ: 109 psychiatrists, 84 emergency medicine specialists, 40 anaesthetists, 36 radiation oncologists and therapists and 28 rehabilitation specialists. The report also says there are perceived shortages of pharmacists, pathologists and surgeons but does not put numbers to these. Staffing shortages lead to treatment delays, overworked staff and is placing services in some areas at risk.

4 January 2002

Wendy Heaysman
co-founder of the Taranaki Work Trust, Manager of the Willow Grove Training Centre. Friend and Colleague.

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Enterprise Facilitation
— an important tool for the rebirth
of local economies

  • Ernesto Sirolli in Rotorua
  • Ripples from the Zambezi — our review


  • The rapid growth of the rural sector in the South Island, particularly in dairying, has triggered an urgent need for on-farm labour. Research by Dr Rupert Tipples, commissioned by Massey and Lincoln Universities, indicates that the South Island dairy industry will need between 2,000 _ 4,000 on-farm workers in the next five years.

    Dr Tipples, who is a senior lecturer in employment relations at Lincoln University, says that getting a good match between employers and workers will be an important factor in the skills shortages. Tipples: "A lot of employers simply want a pair of hands to do the job and don't think about the needs of the employee or what they want to get out of a job..."

    Dr Tipples says that research in the dairy sector shows that living and working conditions are the most important issue in determining good or bad employment relationships. This is followed by time factors such as holidays, hours of work and rosters. Wages are seen as an important issue, but not a major one. Other factors affecting the supply of rural labour are social — relating to the decline of rural centres and a perceived diminished quality of rural life.

    Source — The Daily News 13 December 2001 "Thousands of farm jobs available soon" by NZPA

    Click on the above image for a full-sized view.


  • The Auckland City Mission Christmas Appeal has included a full-page advertisement in several national magazines with a picture of “Redundant Bob” — a Barbie-style toy doll complete with dependant family, unpaid bills with “all new stress”.


  • Trends: Australian researchers have found that unprecedented numbers of Australian men in the prime of their working years are withdrawing from the labour market, while the workforce participation rate of women keeps rising. The unemployment rate of Australian men has surpassed that of women for the first time since the 1980s. Since 1990, 1.5 million jobs have been created in the Australian economy, yet most of them went to women — only 200,000 jobs went to men.

    A national report on Australian poverty by the Smith Family welfare agency suggests that the blow to male employment trends has come from the demise of the manufacturing industries and the difficulties men are facing in adapting to "new economy" jobs in the services sector.

  • The Smith Family report says that despite strong economic growth and falling unemployment over the past 10 years, the number of Australians living in poverty (existing on less than half the average weekly earnings) has increased to 13% of the population last year compared with 11% in 1990.

    While sole parents (who tend to be women) have the highest poverty rates of all family groups surveyed, it has been surprising for the researchers to find that single men are becoming the "new poor" in Australia. The figures: In 2000, there were 409,000 single men under 65 living in poverty compared with 259,000 single women.

    Caroline Milburn of the Melbourne Age reports that most of the jobs created in Australia since 1990 have been part-time in the thriving areas of retail, hospitality and tourism. She says that women have taken more of the new jobs, partly because it is culturally more acceptable for them to work part-time. The changed labour market conditions have become a distinct disadvantage for men, many of whom remain wedded to the social expectation that they should be breadwinners in full-time jobs.

  • Sue Richardson, director of the National Institute of Labour Studies at Flinders University, says that the falling workforce participation rate of men and the rising female rate will challenge these long-held beliefs, while redefining relationships between the sexes and within many families. Richardson: "We are living in extraordinary times. This workforce trend means we're dealing with uncharted waters for Western society. People are going to have to negotiate their way through this — there are no maps."

  • "Financial Disadvantage in Australia 1990-2000 — the persistence of poverty in a decade of growth" report by Ann Harding, Rachel Lloyd and Harry Greenwell of NATSEM (National Centre for Social and Economic Modelling) for The Smith Family. Download the full report from The Smith Family website at www.smithfamily.org.au/news/tbc-overview.cfm
    Sources — Jobs Australia (Janet Online) "More Men not employed" 28 December 2001; The Melbourne Age 22 December 2001 "The changing workplace: men need not apply" by Caroline Milburn; "Financial Disadvantage in Australia 1990-2000 — the persistence of poverty in a decade of growth" report by NATSEM; The Melbourne Age 29 November 2001 "Single Men new class of poor" by Caroline Milburn; NATSEM Press Release 28 November 2001 "Persistence of Poverty despite a decade of growth"


  • Former American Presidential candidate Ross Perot used to say in the early 1990s that a "giant sucking sound" could be heard as thousands of American jobs were transferred to Mexico after the signing of the NAFTA free trade agreement. American journalist William Greider now says that the sucking sound is back ... only this time it is not Mexico taking away American jobs. It is China sucking away Mexico's jobs. And jobs from Taiwan, South Korea, Singapore, Thailand, Central and South America, and even from Japan. Writing in The Nation, Greider says that low-wage developing countries are entering a cut-throat competitive market for skilled manufacturing workers. And he argues that in the "race to the bottom", China is defining the new bottom.

    Grieder: "This turn of events is difficult to see against the gathering threat of global recession, but in the long run it will be more meaningful. [...] The downdraft on wages and competing economies induced by China's ascendancy may produce a terrible reckoning. For many poor nations that thought they had gained a foothold on the ladder, the reversal will be quite ugly."

  • The Mexican manufacturing base is now shrinking, firstly due to the US recession, but also because factories are now leaving. The same American companies that were cheerleaders for NAFTA back in the 1990s are now shutting down and moving to greener, and cheaper, pastures. The figures: the manufacturing wage level in Mexico is now around $1.50 an hour. In China — with its 1.2 billion relatively well-educated people — it is 20-25 cents an hour.

    After NAFTA, Mexico's manufacturing base expanded robustly year after year with most new factories locating to the "maquiladora" export zones which produce about a third of the nation's hard-currency income from abroad. But during the past year, employment in the maquiladora industries has fallen by 12%, or more than 170,000 jobs.

    Guadalajara, a production center for dozens of US technology companies, was down 16% in exports and lost 15,000 jobs in the first half of last year, according to Business Week. An executive of SCI Systems, which employs 10,000 in Guadalajara, explains: "I'm an absolute believer in Mexico, but anything that is really price-sensitive is considering moving lock, stock and barrel to Asia."

  • William Greider contends that while the global economic system continues to advance through a roving exploitation of cheap labour, then developing countries will continue to be prevented from pursuing more balanced strategies for employment creation. His recommendation: establish a wage-floor trade agreement that "brings the bottom up, instead of pulling the top down."

    He says that the international community needs to impose a "living wage" standard on the production of traded goods, enforced by penalty tariffs on countries and companies that decline to participate. Producers would have a choice: Pay decent wages to their workers or pay penalty tariffs on their exports. The money from the tariffs could be recycled into development aid.

    Greider says that such a strategy would borrow a lot from the European Union's economic integration of rich and poor nations ranging from wealthy Germany to low-wage Portugal and Spain. Greider : "The European Union delivers substantial aid conditional on democratic standards and labour rights, implicitly encouraging rising wages in the poorer countries. The poorer countries in turn enjoy the considerable trade advantages extended exclusively to EU members."

    Source _ The Nation 31 December 2001 "A New Giant Sucking Sound" by William Grieder available at www.thenation.com


  • sirolli-cara.jpg - 12635 Bytes Filling the "opening guru" speaker slot at the recent Regional Development Conference in Rotorua was the Italian-born Ernesto Sirolli. He has spent the last twenty years promoting his "Enterprise Facilitation" philosophy which encourages local communities to harness the creative and economic forces of new entrepreneurs.

    Now based in Saint Paul, Minnesotta, Sirolli is best known for his work in the 1980s establishing the Enterprise Facilitator scheme in Esperance, a remote rural community in Western Australia. At that time his work also inspired the establishment of Enterprise Facilitators in several communities throughout New Zealand ... although most of these positions have since ceased to operate due to changing commitments of funders.

  • In the last decade, however, Sirolli has gone on to become an internationally popular speaker on entrepreneurship. Many communities throughout the world are now listening to his message which is critical of "top down" programme-centered economic development solutions. In contrast, Sirolli promotes a person-centered grass-roots approach, which fosters the passion and skills of entrepreneurship — one person at a time.

    Sirolli: "The last fifteen years have confirmed that governments and corporations do not create jobs. Jobs are created by small individual enterprises. Enterprise Facilitation is without any doubt the social technology of choice for job creation for the new millennium. Long gone is the nonsense about the "leisure society," dead and buried is the dream of cradle-to-grave security of employment. What is here, stronger than ever, is human resourcefulness, passion, intelligence, and creativity."

  • Sirolli says his method is best suited for communities of about 5-50 thousand people. A community that embraces the Enterprise Facilitator approach can receive specialised training from the Sirolli Institute on how to support new entrepreneurs. A local Facilitator is selected by the community, with the sole purpose of serving as a management coach to local people who are interested in starting a new business. A key philosophy is that the Facilitator should never initiate a business idea or motivate clients ... but rather act as a "mid-wife" to the client's own passions and dreams.

    In practice, the Facilitator provides long-term mentoring to the entrepreneur, which extends through the many developmental stages of a new business. They link clients to a whole range of services, including how to get access to capital, and how to work in partnership with other local business-people. The Facilitator also encourages the formation of a support team to get around the entrepreneur to provide help in the areas of production, marketing and finance.

  • Sirolli told the Rotorua conference that regional economic development walks on two legs. The first leg is concerned with the creation of infrastructure for development. Without roads, communication, transportation, energy, industrial land, credit, education, etc. it is very difficult for the community to survive and for local enterprise to take place. Infrastructure development, however, cannot replace the second leg, which involves actively fostering entrepreneurship.

    Sirolli: "This is the bottom-up responsive leg, which captures the motivation and imaginative intelligence of local passionate individuals who wish to engage in economic activities. If infrastructure development can only be done strategically by observing the community trends and projecting its future needs ... then responding to entrepreneurs can only be done by becoming available to self-motivated individuals on an as-needed, just-in-time basis.

    "The condition for success for regional development, however, resides in allocating the same kind of energy and resources to responding to entrepreneurs that is allocated to infrastructure development. It does not make sense to be all dressed up with nowhere to go. To have beautiful infrastructures without entrepreneurs using them or strategic plans without passionate individuals to implement them is equally frustrating."

    Ripples from the Zambezi
    —Passion, Entrepreneurship, and the Rebirth of Local Economies
    by Ernesto Sirolli
    (pub 1999 by New Society)
    ISBN 0865713979
    available from www.amazon.com

  • our review

  • The Sirolli Institute for Enterprise Facilitation can be contacted through its website at www.sirolli.com

  • "Enterprise, Entrepreneurship and their role in the New Zealand Local, Regional and National Economy" Dr Ernesto Sirolli keynote address to the Rotorua Regional Development Conference November 2001, available on the internet at http://www.regdev.govt.nz/conferences/2001/sirolli/index.html

    Sources — Ernesto Sirolli speech to the regional Development Conference 28 November 2001; "Ripples from the Zambezi — Passion, Entrepreneurship, and the Rebirth of Local Economies" by Ernesto Sirolli (pub 1999 by New Society);

  • The Jobs Research Trust — a not-for-profit charitable trust constituted in 1994.
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