Essential Information on an Essential Issue
18 March, 1996
- REAL WAGES STATIC
Figures issued this month show that despite the recovering economy, the value of
real wages is failing to rise. The Real Wage Index in the December 1995 quarter showed no
change, and for the 1995 year as a whole, it showed a fall of 1.2%. The Real Wage Index measures
the buying power of wages and salaries by adjusting take-home pay for rises in consumer
prices. Since the index began in December 1992, real wages have fallen by 2.1%, while the
overall economy has grown 11.5%.
Statistics NZ's Labour Cost Index shows that, during 1995, wages did not change for almost
half of all surveyed jobs. The Index shows that over the last two and a half years, ordinary
time money wages have not changed for a third of private sector jobs. This is despite Consumer
Price Index increases of nearly 6.5% over the same period.
Labour's employment spokesman Steve Maharey says the figures prove that workers are
seeing little evidence of the recovery in their pay packets. Maharey: " To achieve a real wage rise,
the government is having to manufacture an artificial increase with its tax cuts..."
Source - The Dominion 8 March 1996 "Despite good economy real wages fail to rise" by Ruth Laugesen and NZX Institute
of Economic Research March 1996 Update.
- IMMIGRATION NOT AFFECTING UNEMPLOYMENTT
Are immigrants taking our local jobs, as suggested by Winston Peters? It seems that
the employment figures do not support this growing myth. During the 1970s and 1980s we had a
net loss of population as people left NZ for greener pastures elsewhere. At that time
unemployment also grew to be at its highest. The net gains in immigration began in this decade. This has
coincided with a fall in the rate of the official unemployment rate from 11.6% in September 1991
to 6.1% in September 1995.
Source - faxed Alliance Press statement from Matt Robson to the Jobs Letter 15 February 1996
- MANUFACTURING SURVEY SHOWS GLOOMY OUTLOOK
As part of an election-year theme of celebrating economic growth, the government
is hailing "a 75% growth in manufacturing exports in the past five years and 180,000 new
jobs under the Employment Contracts Act", as quoted by PM Jim Bolger when he opened
a Malaysian-controlled furniture factory in Manukau earlier this month. Auckland
manufacturer's, however, are reporting a different story. A recent survey by the Auckland Manufacturers'
Association shows a 3.2% cut in staff in the past year, with a fall in domestic sales of more than
8% and unspectacular export growth. Association chief executive Bruce Goldsworthy says that
more than half the respondents to the survey were bracing themselves for declining profits and
more job cuts. Goldsworthy: "It is difficult to see where the government's projected growth is going
to be achieved when a major contributor to the productive sector is struggling to maintain
previous levels of activity ..."
Source - New Zealand Herald 6 March 1996 "Manufacturing survey likely to prick Bolger's export bubble"
- YOUTH ACTION PROGRAMME EXPANDED
The Youth Action programme run by NZ Employment has now been expanded to all
16-20 year olds (registered for more than three months), as part of the government strategy to
ensure that all young people under 20yrs are in some form of education, training or employment.
Under the programme, each young job seeker meets with an employment officer for a one-to-one
interview, where together they prepare an `Action Plan'. This personal plan outlines a series of
steps to be taken towards employment ... leading to further education or the other services offered
such as TOPs training courses, NZES seminars on job hunting, workplace experience or
employment on Taskforce Green or Job Plus schemes.
Source - fax to the Jobs Letter 27 February 1996
- JOBSEEKER TRAITS IDENTIFIED
Colmar Brunton research into the types of job seekers on the NZ Employment register
has led to the identification of four job-seeker traits, reports Ruth Brown in the Otago Daily
Times. The largest percentage of jobseekers (at 30%) are labelled "Withdrawn" these people find
it hard to get a job or have given up trying. The "Strugglers" make up 26% of the register, and
they really want a job but need job-seeker skills, support, feedback and education. The "Explorers",
at 17%, may need a trigger or motivation to get a job. And 27% of job seekers are "Drivers"
who are likely to be recently unemployed and are optimistic about finding work.
Source - The Otago Daily Times 6 March 1996 "Too Little Stress" by Ruth Brown.
- STUDENT LOAN UPDATE
Cabinet papers, released under the Official Information Act, indicate that students will
owe more than $4 billion under the student loans scheme by the year 2001. This loan figure is
expected to rise to $18-$20 billion by the year 2024, when one person in six in the working-age
population would be committed to loan repayments. The paper also says that the uptake rate for the
student loans scheme has grown from 39% of students in 1992, to an estimated 73% last year,
when nearly 98,000 students signed up. It estimates that 50% of the students would still be paying
back student loans at age 40, and just over 10% of the students would not repay their loans by the
time they turned 65. Some would die with part, or all, of their loan not repaid. The paper describes
the scheme as a success and that it comprises "...a major asset on the Crown's Balance sheet."
The loans policy was introduced in 1992 after private lenders showed little interest in this
`market'. Under the policy, students can borrow up to $1000 a year to cover course-related fees
and up to $4500 for living costs. The money is recouped through the tax system at a rate of 10c in
the dollar on earnings above $13,884 per annum.
Source - The Daily News 2 March 1996. "Students will owe $4b by 2001, says report" and New Zealand Herald 2 March
1996 "Long haul for student debt" by Particia Herbert.
- GRADUATE NURSES LOOK OVERSEAS FOR JOBS
The Nurses Society reports that new nursing graduates are facing a year with no
reasonable jobs available to them. National Director David Wills says that since November, less than 15%
of nursing graduates had found jobs with CHEs, and most of them are having to look to
private hospitals or to "look overseas for their first job..." The preference for most graduates is to find
a position in a public hospital as the best way to gain valuable nursing experience. But Mr
Wills predicts that by June, less than a third of graduates would have found work in public hospitals.
Source - The Dominion 4 March 1996 "No reasonable jobs for nursing graduates"
- FRUIT PICKERS IN SHORT SUPPLY
As serious casual labour shortages start to bite into the fruit-picking areas of Hawkes
Bay, Nelson, Motueka and Malborough, the Immigration Service has started to grant work permits
to overseas visitors to make up for the shortfall. Orchard and Vineyards Employers
Association president Richard Prew says: "...when you can't get the casual staff in your country, you have
to get them from overseas." The Immigration Service says it is liaising with orchardists in order
to find out how many pickers are needed. The policy is that the Employment Service in an
area concerned must first declare that there are no suitably skilled New Zealanders available to
work, before backpackers or tourists can apply for a work permit or for a variation on their
Getting dispensations for overseas visitors to work will only form a part of the solution
to the wider issue of labour shortages in the fruitpicking industry. The situation will be much
worse in a couple of years with the apple crop expected to double amidst a downward trend in
unemployment rates (see Jobs Letter 30). Solutions currently being discussed include transporting
and housing unemployed people from other NZ districts to help during harvests.
Another option is to co-ordinate the industry to provide full-time employment for orchard
workers, who could be employed co-operatively across several orchard locations. As the industry
has work of different types available 12 months of the year, but not all picking work and not all on
the same property, a multi-skilled workforce could be developed to work on rotation amongst
Source - The Dominion 8 March 1996 "Orchards short of fruitpickers"
- MINIMUM WAGES OR FAMILY BENEFITS?
The government's annual review of the minimum wage comes into force this week with
a rise of 2%. This means the Youth Minimum Wage (for ages 16-20yrs) will rise to $3.82/hr
or $153/wk for a 40/hr week. The Adult Minimum Wage (over 20yrs) will rise to $6.37/hr or
Question: Would we need the introduction of income support measures like the
Independent Family Tax Credit if we had a more sufficient rise in the minimum wage ?
Free market theory predicts that a minimum wage must lower employment levels because
it raises the price of labour. For example, the Business Roundtable, in a submission to the
Government last year, argues that "...there is no case for increasing the current minimum wage rates,
and a strong case for reducing them as a step towards their elimination." British economic
columnist Will Hutton says that many governments and employers associations are united in
opposing minimum wages in principle, preferring to boost the incomes of the poor through family
benefits. He says that as processes (such as NZ's Employment Contracts Act) bid down the wages of
the bottom 10% of workers, then governments will need to spend more and more on family
benefits. Hutton: "Essentially, the taxpayer is funding cheap labour..."
Hutton likens the use of `family benefits' to the Speenhamland system of support which at
the beginning of the 19th century locked the working class of Britain into appalling dependence
and poverty. Hutton: "The idea was to save the very poor from starvation by offering them a
subsistence income devised by local magistrates and funded by the ratepayer. But, just as today, the
free market pushes down wages, and ratepayers found themselves subsidising rapacious
employers. Poverty exploded, the rates becoming unsupportable, and the economy began to wind down
as levels of demand fell away..."
Source - Will Hutton in the Guardian Weekly 23 July 1995 "A guaranteed minimum wage makes economic sense" and
"Work" the Labour Party newsletter on Labour and Employment issues March 1996.
- "NOT FOR PROFIT" MANAGEMENT COURSE
Auckland's Unitec Institute of Technology has started a new course of interest to
charities and community groups. The Diploma in Not For Profit Management is a modular course
covering the following areas: Not-for-Profit Culture and values ("... in contrast to normal
commercial practice, not-for-profit agencies must worry about money in order to achieve their mission,
as opposed to worrying about its mission in order to make money"), Stakeholder
Communication and Image Management ("...how to look like a blue chip company on a potato chip
budget"), Accounting and Financial Management, Small Team Leadership and Conflict Resolution
("... navigating through the perils of human behaviour"), Fundraising and Sponsorship
("...every agency's nightmare"), Volunteerism and Employee Motivation and Management, and
Governance, Planning and Board Development.
One of the main people helping to develop the Unitec course is veteran community worker
Sue Bradford of the Auckland Unemployed Workers Rights Centre. Bradford: "For years, groups
like ours have been very aware of the big gap in training needs for people who hold positions
of responsibility in our organisations. With the continued onslaught of the effects of new right
ideology on our sector through ever-tightening funding restrictions and the development of
contracting as one of the main resources for community groups, it has become more important than ever
that people managing our organisations have the basic skills needed to cope."
For further details contact Unitec. Private Bag 92025, Auckland phone 09-815-4399 fax
Source - brochure from Unitec, and letter from Sue Bradford 7 February 1996
- NGA KORERO O TE WA
Internet Bookmark : Maori News on the world-wide web
The Maori news summary Nga Korero o Te Wa is now available on the internet. Nga
Korero is a monthly newsletter produced by Auckland journalist Adam Gifford. Like the Jobs Letter
in format, it seeks to summarise and point towards essential news and views within Maoridom.
The internet version is the same as the printed letter, and information is grouped into relevant
sections (eg arts, business, people, politics etc). This homepage also links to other internet sites of
- U.S. JOB FIGURES LEAD TO MASSIVE SHARE SELL-OFF
Good news for the latest jobs figures in the United States has led to a massive Wall St
sell-off of shares which has also led to the depression of stock-markets worldwide. The sell-off
started after the US government reported that February non-farm payrolls grew 705,000 compared
to forecasts of a gain of 326,000 jobs. The unemployment rate dropped from 5.8% to 5.5%. If
these figures were correct, it indicates that the US is further along an economic recovery cycle
than expected. The figures may yet prove to be statistical illusion: they show that the United States
is creating more jobs in one month, than what continental Europe was expected to create this year.
This may seem like `good news' for the economy, but not for Wall St. The
better-than-expected jobs figures means that the US Federal Reserve, their central bank, is likely to hold
its interest rates steady, or even raise them, in order to avoid inflation. The stock market was
expecting the Federal Reserve to bolster the sluggish economy by cutting its interest rates.
Investors immediately responded to the changing expectations with a massive sell-off, leading the
Dow Jones Index to drop 171 points in trading on Friday 8th March ... this was the third biggest
points fall ever.
Source - New Zealand Herald 11 March 1996 "Massive Wall St sell-off spreads across the Atlantic". and The Dominion
13 March 1996 "Job figure spurs shakeout"
- GENERAL MOTORS STRIKE
Contracting Trends: Throughout the US last week, General Motors plants were at a
standstill as 65,000 GM workers went on strike. Their strike was not so much about their
present wages or conditions, but about the future of their work. The source of their dispute: the
continuing use of cheaper outside contractors or "outsourcing" to make car components presently
made within the GM plants.
The GM company it says it is no longer competitive, and it is trying to save on labour
costs compared to other US manufacturers who use much more outsourcing. Seventy percent of a
GM motor vehicle is made by GM workers making $40/hr (including benefits). Only thirty percent
is sent to outside contractors. A Chrysler vehicle shows almost the reverse picture with its
$40/hr workers only making thirty percent of the vehicle, while the remaining seventy percent of
the vehicle is sent out to outside contractors making half as much wages, or less. GM believes
that unless it lowers its labour costs, it can never become competitive it says it makes only
$413 profit on every vehicle it sells, compared to Chrysler making $2,200 per vehicle.
Source - ABC News 12 March 1996 lead story
- GERMAN PARTIES GET TOGETHER ON JOBS
The German government facing a post-war record in jobless levels is establishing
is own multi-party Alliance for Jobs, reminiscent of the Australian and NZ examples of
Employment Taskforces. Chancellor Kohl has called on opposition parties and the unions to help his
government in the fight against unemployment, which is presently at 3.8 million or one in ten of
the German workforce. Opposition parties have accepted the invitation, and federal and state
agencies are joining together to set up joint working groups to propose remedies focussing on
financial policies, the labour market, and social security systems.
Source - New Zealand Herald 10 February 1996 "Germans join to create jobs".
"The last time we got this rating was in 1983 when Muldoon was Prime Minister, and doing
all the things that we're now told were very bad for us..."
— PSA President Tony Simpson, commenting on the Standard and Poors credit upgrade to AA+
"Acting like a spoiled rich kid, Wall Street couldn't stand the news that another part of the
US economy the one in which people work for a living is having a better time of it..."
— Time magazine, 18 March 1996
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