Deutsche Bank chief economist Ulf Schoefisch agrees wage inflation has been mute. He says business owners will resist broad-based wage increases without corresponding productivity gains, otherwise the rises will have come out of their profits.

Westpac Bank says that the tight labour market and skills shortages will push the labour cost index up, but it doesn't expect large increases. Westpac predicts the private sector wage rate to reach 2.5% by the middle of next year.

Australia's tight labour market hasn't pushed up wages, either. The latest Australian labour price index rose 3.5% over the year, a fact that "seems likely to calm fears of a breakout in wages as unemployment reaches historic lows," according to Jim Parker in the Australian Financial Review.

Source — New Zealand Herald 12 November 2004, "Jobless rate drops to an 18-year low" by Brian Fallow; The Dominion Post, 9 Novemeber 2004, "December rate hike unlikely _ economists"; The Dominion Post, 18 November 2004, "Wage figures give Auzzies a breather" by Jim Parker reprinted from the Australian Financial Review.

By far the greatest share of the new jobs has gone to older workers — with just over two thirds (68%) of the new jobs going to people aged 45 and over.

The job creation is good news for Maori and Pacific communities — just over one fifth (21%) of the new jobs have gone to Maori and Pacific people.

Most regions are doing very well — with the notable increase of 40% of jobs in Canterbury. But there has been little job growth in Wellington (only 4%), and employment remains static in Southland.

When we look at a breakdown of the new jobs by economic sector, we see that the Health and Community Services Sector has increased its workforce by 44%, the Construction sector by 33%, and Education by 28%. Manufacturing has grown only by 3%.

The release of the lower unemployment figures has prompted further calls from industry groups for the government to bring in more immigrants, saying they are facing a shortage of workers — particularly in the horticulture industry where they cannot get enough fruit pickers.

Business leaders say immigration rules should be relaxed to alleviate the shortage of skilled employees. However, unions have argued higher wages are needed to keep skilled New Zealanders from leaving the country in search of better pay.

Paul Swain told National Radio there was "no quick fix" to the problem but the government was working to bring in more skilled immigrants. Swain: " We're obviously concentrating on quality but what I'm not keen to do is flood New Zealand with a whole pile of cheap labour which is not good in the long term for New Zealand and drives New Zealand wage rates down."

Swain says that in the short term there had to be "some immigration solutions" to help the horticulture industry find workers and the government was working with the industry on a strategy. Swain: "But in the long term, the horticulture industry has got to look at their own employment practices, upskilling, better wages and conditions, looking ... and at using other pools of labour, for example, women at home."

Source — Stuff website 12 November 2004 " Immigration yes, flood of cheap labour no - Swain"

MAYORS TASKFORCE: FROM GOALS TO GUARANTEES

The Mayors have re-affirmed their commitment to continue working towards the "zero waste of New Zealanders" and have changed their specific vision to include working for a "youth guarantee" that all young New Zealanders under 25 years be in paid work, in training or education, or in useful activities in our communities.

They have also re-affirmed their partnership with the government which is working towards the goal that, by 2007, all 15-19 year olds "will be engaged in appropriate education, training, work, or other options which will lead to long term economic independence and well-being."

Taskforce chairman and Mayor of Christchurch Garry Moore: "Getting to 2005 without fully achieving the Taskforce's first stated goal isn't going to mean that this initiative has failed. It just brings us back to the realities and complexities of the task that we have taken on ..."

" We have always said that the Mayors Taskforce employment goals are cultural goals, and that they will only be achieved by igniting a systemic change across many inter-connected sectors and agencies. I think it is important for us to celebrate the fact that this Taskforce has gained much more traction on employment issues, and has sparked more practical initiatives on the ground, than was achieved by earlier efforts such as the Prime Ministers Employment Taskforce in 1994."

Moore points out that so many Mayors joining together to take leadership on a social and economic issue has never happened before in the history of New Zealand local government. He says it has proven to be a fundamental revolution in the way Mayors see themselves and the role they are seen to take in their communities.

Moore: " We haven't heard anyone in the community fundamentally disagreeing with the vision of the Taskforce. There is great support for it. The Mayors have been able to provide leadership and advocacy on how achieving these employment goals will lead to the sort of New Zealand that we all would be proud to live in. We are certainly not going to stop this Taskforce until every New Zealander is guaranteed a place in that vision."

"To some extent, the establishment of the Taskforce in 2000 anticipated the Local Government Act of 2002 which makes "sustainable development" and the "social, economic, environmental and cultural wellbeing of our communities" a direct focus and responsibility for councils. Mayors and councils have been given an important legislative mandate to express such cultural goals in their Long-Term Council Community Plans (LTCCP), which many of us have now done. The Mayors Taskforce will continue to be an important leadership element in working for these cultural goals."

Cut Price Kids, by Auckland University economist Susan St John and sociologist David Craig, argues that design flaws in the government package leave the poorest children either worse off or with very little help. It says by rewarding parents who are employed, it has created a bigger gap between beneficiaries and those with jobs, thereby discriminating against children whose parents are beneficiaries. The report says New Zealand is a "laggard" in family assistance compared to other similar countries such as Australia and Britain where per-child weekly payments are the same for all children regardless of the source of their parents' income.

The "Working for Families" package was widely applauded when it was announced in May (see issue 207 of The Jobs Letter). So what has changed? Cut Price Kids co-author David Craig told NewsTalk ZB: "The policy was the first major redistribution towards poor New Zealanders for 30 years. All of the people at Child Poverty wanted to say something positive about it at the time. But really when we come down to it, when we've looked at the fine print over time, we're finding it really hard to congratulate the government over it. The package denies the poorest families benefits it is delivering to already better-off working families. It leaves those who should be at the front of the queue at the back. It sets out to narrowly target benefits to those already better off, and create a significant gap between working and benefit families. It achieves this, but at the expense of the poorest children. These children are simply too important to leave behind. For their own wellbeing and security, for their families' sanity and stability, for the future strength of the workforce and society, these children need to be brought along too."

— Cut Price Kids: Does the 2004 Working for Families Budget Work for Children? 14 November 2004, published the Child Poverty Action Group, can be downloaded from here (PDF 80 pg, 415kb).

The Cut Price Kids report is very disappointing, according to Charles Waldegrave, co-leader of the New Zealand poverty measurement project. He says it is a misrepresentation of the family package and takes no account of recent improvements in housing, childcare and health assistance.

Cullen says he is not suggesting that "all is rosy", nor will his government overcome a social deficit built up over decades in a few years. Cullen: "However, these are the kind of measures that will make a difference for many New Zealand families, especially those who are under considerable strain and finding it hard to achieve a balance between life and work."

ACT deputy leader Muriel Newman says she is worried that more generous welfare benefits, as suggested by groups like CPAG, could make the problem worse rather than better.

Sources — Press Release, Child Poverty Action Group 14 November 2004 "Working for Children?" Sunday Star-Times 14 November 2004 "Govt `fostering gap between rich and poor'" by Donna Chisholm; Dominion Post 15 November 2004 "Key politicians slate child poverty action group report"; Press Release, Quality Public Education Coalition, 15 November 2004, Child Poverty Action Report Welcomed; Dr David Craig, co-author of a report on child poverty, interviewed by Newstalk ZB's John Dunne, 16/11/2004 10:16 AM, http://xtra.co.nz/broadband/0,,10980-3858582-25,00.htm; Michael Cullen Speech to the Service and Food Workers Union Thursday, 18 November 2004.

WORKING MUMS' CHILDREN DON'T SUFFER

What does impact negatively on children is early, extensive and poor quality non-maternal care combined with poor quality home care. The most important influences on children's development include quality of interactions between the child and key adults — be it at home or in early childhood education — and children's participation in some quality early childhood education.

Women's Affairs chief executive Shenagh Gleisner: "This report should ease working mothers' concerns. I hope it will make women feel less guilty. I think the surprise will be that being a working mother is not harmful."

Morris says the flexible work issue has been mistakenly labelled as a women's issue, but it is just as important for men who need balance and flexibility as well. Morris: "Child care involves both parents making arrangements at work. Men also have elderly parents who need care and attention."

Source — Manawatu Standard 8 November 2004 "Setting a balance in working life" by Anna Wallis.

— It's About Time! Union Guide to Work-Life Balance by the Council of Trade Unions (November 2004) — Download "It's About Time!" (PDF, 808KB) from here

WORKLIFE BALANCE GUIDELINES

Source—Sunday Star Times 14 November 2004 "Kiwis are working their lives away" by Ruth Laugesen and Emily Watt.

But the Immigration Service says comparing overseas applications procedures with local ones is not fair. Chief operating officer Brendan Quirk says Immigration Services offices in New Zealand had to do a lot more checking and were often dealing with the semi-skilled or low-skilled end of the market. Processing times at the busiest branch, Auckland, have dropped from 39 days to 10 days and Quirk says there have been improvements in other centres.

Source — The Dominion Post, 10 November 2004, "Sydney faster for work permits".

In a survey of 150 companies (employing 750,000 people between them) 51% say the pressure to move jobs abroad has increased. The CBI says the phenomenon of moving jobs abroad is now so advanced it has spread from the largely unskilled manufacturing sector through to financial services and IT. Call centres — the most significant example of outsourcing — accounted for only 14% of jobs moved abroad. India and China remain the most popular places for exporting jobs, with Eastern European countries becoming increasingly attractive.

Source — Daily Telegraph, UK, 8 November 2004 "Unskilled jobs to go in 10 years" by Malcolm Moore, Economics Correspondent.