Source - fax to the Jobs Letter 27 February 1996

Source - The Otago Daily Times 6 March 1996 "Too Little Stress" by Ruth Brown.

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.

Source - The Dominion 4 March 1996 "No reasonable jobs for nursing graduates"

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 various employers.

Source - The Dominion 8 March 1996 "Orchards short of fruitpickers"

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.

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 09-815-4399.

Source - brochure from Unitec, and letter from Sue Bradford 7 February 1996

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"

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

Source - New Zealand Herald 10 February 1996 "Germans join to create jobs".

"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