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    Essential Information on an Essential Issue

    Letter No.18

    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.

    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

    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

    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 is reduced..."

    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

    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..."

    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

    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..."

    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

    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

    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 person placed.
    Source The Dominion, 15/5/95, Job Intro $1800 cost defended

    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 other ..."
    Source The Dominion, 11/5/95, Supplement lift may be `taken with other hand'

    "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, Oamaru, Waitaki

    Source; The Oamaru Whitestone Civic Trust's promotional material, April, 1995 .

    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

    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 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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