Essential Information on an Essential Issue
18 May, 1995
Jobs in NZ. Long term changes in the labour market in NZ include more older workers and longer hours
" The Crown acknowledges that the confiscations of land were wrongful, have caused Waikato
to the present time to suffer feelings in relation to their lost lands akin to those of orphans, and
have had a crippling impact on the welfare, economy and development of Waikato... The crown
recognises that the lands confiscated in the Waikato have made a significant contribution to the
wealth and development of NZ, whilst the Waikato tribe has been alienated from its lands and deprived
of the benefit of its lands..."
-- from the text of the Crown apology which was part of the Tainui settlement package.
- UNEMPLOYMENT LOWEST SINCE DECEMBER 1986
There continues to be great news on the jobs front with the latest unemployment
figures showing their lowest level since December 1986. The official unemployment rate has fallen
to 6.6% or 114,000 people. These figures have confounded the forecasters - Treasury was
not expecting us to reach this low level of unemployment until March 1988. Of all the OECD
countries, only the United States and Japan have lower unemployment rates than NZ. In this issue
of the Jobs Letter we include an insert on the latest employment statistics, and a special overview
of the labour market as it was in 1994.
- Is the fall in unemployment happening too fast for the Reserve Bank to manage? What
is good news for unemployed people may not be such good news for the Government on
other economic fronts. The Reserve Bank predicted a 7.3% unemployment rate for the March
quarter, a figure they felt would be steady from last December. The Bank has immediately responded
to the good job news with fears that the economy was still growing at a fast rate ... perhaps still
too fast. Their fear is that the low level of unemployed will put pressure on wage rates to rise. And
a rise in wage rates would mean that the Reserve Bank's inflation targets would be harder
to achieve. Last week, financial markets immediately reacted to the jobs figures by pushing
up wholesale interest rates.
Source The Daily News, 19/5/95 Jobless figures down, New Zealand Herald,18/5/95, Jobless in big fall to 6.6pc
- WHAT QUALITY THESE NEW JOBS?
With the employment statistics showing the best unemployment figures in six year,
the spotlight is going on the quality of the jobs being created in this economic recovery.
Labour's Steve Maharey contends that the jobs that are appearing are "McJobs" - the ones that are
insecure, part-time, low-paid, low-skilled, no training given and "with no real future" for the
people who are working in them. Aotearoa Mature Employment Service co-ordinator Noel
Anderson agrees. He told the Sunday Star-Times that people with higher skills and qualifications were
still finding it hard to get jobs in the growing economy. Anderson : "There are very few high
quality jobs around..."
Source The Dominion, 19/5/95, editorial, More jobs, real ones this time, The Dominion, 17/5/95, Labour voices concerns
at increase in part-time jobs
- STRONG DOLLAR THREATENS EXPORTS
The strengthening Kiwi Dollar (see last issue) is damaging export prospects and jobs
in radiata pine processing companies. Radiata Pine Manufacturers Assoc. president Ross
Provan told the Dominion that both the US and Australia have been key markets for sawn lumber
processors. With the US dollar weakening, the price of their exports was also cheaper, making it
harder for the kiwis to compete with the Americans in important Asian markets. Provan : " An
unchecked continuation of this will undoubtedly lead to a loss of jobs and investment as our trade
- BDB REVIEW
The Independent on 18 May 1995 reported that after the government "stocktake" of
Business Development Boards, the BDBs will be required to focus more on improving the
management skills of small and medium sized businesses. This will probably mean the BDBs will
contract out business training courses to providers in the private sector. Government may also alter
the BDB criteria for grant applications, making some project grants contingent on the
applicant improving their management skills.
Source The Independent, 19/5/95, Management skills to be focus of BRD improvements
- MAHAREY CONCERN AT WORKFORCE CASUALISATION
Steve Maharey is concerned about the casualisation of the workforce, a situation that
is masked by the improving jobs figures. He calls for better information from Statistics NZ,
citing that there are no surveys being done hat show the extent of casual or temporary labour,
the amount of training provided by employers, or conditions of work. Maharey : "What's needed is
a survey designed to collect information about our changed labour market that accurately shows
the quality of jobs being offered under the Employment Contracts Act..."
- ANGER AT NGAI TAHU EMPLOYING FOREIGN FISHING CREWS
Warring words are flying in the South Island as Ngai Tahu fishermen take the Ngai
Tahu Trust Board to task for employing foreign crews on the Takaroa company-chartered fishing
boats (see story in last issue). Te Wai Pounamu, the commercial fishing group that represents 27
operators of Ngai Tahu descent, has even threatened the safety of the foreign crews and their boats
at sea or in port. Te Wai Pounamu chairman Bevan Wilkie warns other Ngai Tahu companies
to drop their plans to employ foreign crews or "face the consequences". Wilkie says there is
considerable anger amongst Maori commercial fishermen about what the Ngai Tahu tribal authority
was planning to do : " There's no way we are going to sit back and watch our companies employ
other seamen ..."
Source The Dominion, 15/5/95, Crew row spurs Maori to threaten own tribe
- DEBATING THE EFFECT OF RAISING THE MINIMUM WAGE ON EMPLOYMENT
The debate is heating up over whether or not lower wages really does lead to more jobs
in the economy. Brian Easton, in last week's Listener, reviews the controversial book Myth
and Measurement : The New Economics of the Minimum Wage by David Card and Alan
Krueger. (Krueger is now the US Department of Labour's chief economist). The studies in the book
conclude that a rise in minimum wages do not reduce employment. This is in sharp contrast to
what Easton describes as "over 90% of American economists" believing the opposite of this research
- that minimum wages destroy jobs for the low paid.
The book is lending some weight to Clinton administration proposals to increase the
minimum wage, although these measures are predicted to be " It would be good squashed by the
Republican Congress. Easton on the implications for NZ : "It would be good if this sort of
pragmatic combination of theory and empirical investigation were the basis of the discussion here on
wages and labour markets..."
- FIREFIGHTERS CITIZENS' REFERENDUM READY
The Firefighters referendum on the number of full-time firefighters has passed all the
official approvals, and now the government has a year in which to hold the nationwide poll. The
question to be asked will be : "Should the number of professional firefighters employed full-time in the
NZ Fire Service be reduced below the number employed on 1 January 1995 ? " Referendums
under the Act are not binding on government.
Source The Dominion, 18/5/95, Firefighters referendum looks set for next year
Meanwhile, the Firefighter's Union is turning up the pressure on the Fire Service cuts by
publicising the effect of specific cuts on the standard of fire fighting around NZ. The union has
also dropped their claim for a 20% pay rise in a further bid get the Fire Service to concentrate
on staffing levels.
Source New Zealand Herald, 23/5/95, Firefighters chop claims to save jobs
- BUSINESS GRADS TOLD OF WORKPLACE REALITY
University graduates were given a clear message on the future of work for
graduates, during a graduation ceremony at Massey University last week. Lindsay Taiaroa, the chief
executive of the Vice Chancellors Committee, warned graduates of the faculty of business studies
that they should rely less on employers for career direction and advancement as they enter
the workforce. He said that graduates could expect to hold on average about eight distinct
jobs during their working lives. And American research suggests that four of these jobs "will
terminate involuntarily...". Taiaroa : " Some of NZ's most dynamic companies tell recruits that they will
be disappointed if they are still there after five years... The new world of work will require you
to make continuous reassessment of where you stand occupationally and financially, and to be
prepared to change direction as need or opportunity beckons. Security is something you will have
to provide yourselves..."
Source The Dominion, 22/5/95, Graduates get workplace warning
- SLOW UPTAKE OF JOB INTRO
The Job Intro Programme run by the Employment Service is facing some criticism over
its cost effectiveness. The programme encourages employers to take on 18-yr olds for unpaid
work experience. The Employment Service has spent $700,000 on advertising the programme and
so far has placed only 385 young people since March. This works out as a cost of $1,818 per
Source The Dominion, 15/5/95, Job Intro $1800 cost defended
- ACCOMMODATION SUPPLEMENT GAINS CANCELED OUT BY LOSS OF
People on special benefits will be no better off when increases to the accommodation
supplement take effect in July. This is because the accommodation supplement is regarded as
income when calculating the special benefit, and those on special benefits will lose a dollar for every
extra dollar they receive in the rise in the accommodation supplement. Wellington's Downtown
Ministry spokesman Tony McGurk told the Dominion that the government was making out that it
was putting more money in people's pockets when it increased the accommodation supplement,
but that was not the case. McGurk : "It's a matter of giving with one hand and taking with the
Source The Dominion, 11/5/95, Supplement lift may be `taken with other hand'
- TOURISM IN OAMARU'S HISTORICAL PRECINCT
"Harbour and Tyne" is the name of Oamaru's historic buildings precinct which is the
focus of one of NZ's largest tourist historic developments. The project has served to restore the
old Victorian "whitestone" buildings in the precinct, and create jobs and strengthen the local
economy by developing a living "Victorian Town at Work". The Oamaru buildings are of great
historical importance because they are probably the most complete 19th Century commercial district in
NZ which remains virtually intact. The project is celebrating its tenth year as a
community-driven local economic initiative, and has produced a special issue of the Victorian Times
newspaper which outlines their activities over the last decade.
Contact : David Wilson, Oamaru Whitestone Civic Trust, Private Bag 50058,
Source; The Oamaru Whitestone Civic Trust's promotional material, April, 1995
- WORKSHOPS FOR EMPLOYERS ON THE HUMAN RIGHTS ACT
The Human Rights Commission is conducting a series of three-hour pre-employment
workshops around the country during June and July. The workshops are to help employers
understand the Human Rights Act as it applies to job applications, and help them address the
employment issues such as disability, age, family responsibilities and equal employment opportunities.
Contact The Education Convenor, Human Rights Commission, P.O.Box 6751, Wellesley
St, Auckland. Phone 09-375-8631 Fax 09-377-3593
- JOB SHARING
The idea behind Job Sharing is simple. Rather than a five-day working week for
some workers and others remaining unemployed, the work week should be reduced to, say, four days
a week, with a corresponding pay cut, so that more people can share the available work. It is
an idea that is gathering momentum in the industrial world. Throughout Italian workplaces,
for example, a slogan is appearing - Lavorare meno, lavorare tutti - work less and everybody works.
Job Sharing in Germany. The auto-maker BMW in 1990 introduced a four-day, 36
hour week at one of its plants, with an agreement for more flexible working hours. The
productivity gains more than offset the cost of taking on more workers, so there was no need for a wage
cut. A more recent deal at Germany's Volkswagen involves a four-day week along with a 10%
paycut. This has not created new jobs, but saved 31,000 jobs that would otherwise have been
eliminated. - from the UN Human Development Report 1994
Job Sharing in France. A subsidiary of the computer company Hewlett-Packard has
introduced a more flexible four-day week for workers. This has enabled the plant to be run seven
days a week, round the clock, rather than five days on day shifts. Production has tripled,
employment has risen 20%, and earnings have remained unchanged.
- IS TECHNOLOGY DESTROYING JOBS?
Is new technology going to see an end to more jobs? Not so, according to and OECD
"Jobs Study: Evidence and Explanations" published last year. If anything, the current wave of
technological change has been modestly beneficial for jobs. The demand-boosting effects of
technology have more than offset the job-destroying ones. And the countries that have been most
successful in creating jobs - America and Japan - have also seen the fastest shift in their industrial
structure towards a high-tech, knowledge-based economy.
The Economist reports that despite a huge investment in information technology over
the last decade, unemployment in the United States, at 5.4%, is currently no higher than it was in
the early 1960's. In Western Europe, where the investment in new technologies has been smaller,
11% of the workers are jobless. The Economist : "This is hardly a persuasive sign that
information technology is a big cause of unemployment... "
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