Red Alert

Archive for the ‘informal economy’ Category

Total Employment Change from 2008 Reveals Imminent Crisis

Posted by on February 21st, 2012

Increase in unemployment under National

Increase in unemployment under National

The Household Labour Force Survey Survey report of the December 2011 Quarter released last week revealed that our unemployment rate slipped slightly to 6.3% from 6.6%. While a rate of 6.3% in itself doesn’t necessarily mean we have reached crisis levels, the focus on the overall unemployment rate does conceal detail about our employment situation that if brought to the surface will shine light on what I believe is an immiment crisis looming in our economic horizon.

Since JohnKey’s National took office in November 2008, 53,000 New Zealanders have joined the unemployment ranks. That’s a 54% increase in the number of people unemployed to a total of 150,000. For these people, National’s promise of a ‘brighter future’ has utterly failed to materialise, especially if you have a mortgage and teenage children you are supporting through school.

While the impact of the recession cannot be ignored, the number of people unemployed has actually increased since the recession officially ended in mid-2009. The official unemployment figures only tell part of the story. Many more people are without work but are not counted as being unemployed. Many are described by the Salvation Army as being “discouraged unemployed”. They would like to work and would accept a job offer if given, but they would not be deemed as actively seeking work because for instance looking for work through a newspaper does not meet the threshold of “actively seeking work”. The number of Kiwis jobless has increased by almost 100,000 under National’s watch to now 261,300 people as of December 2011. In the meantime 59,964 people are receiving the Unemployment Benefit as at December 2011 a fall of 7% from 67,084 as of the December 2010.
So is this it? Is this the brighter future promised to all New Zealanders?

Number of people jobless

Texts from Auckland

Posted by on May 10th, 2011

Txts from Banksy 1

Txts from Banksy 2

Txts from Banksy 3

The car washer dudes are back

Posted by on March 29th, 2011

Don’t know about you, but I’ve noticed a lot more car window washers on intersections lately. My local one is back after not seeing him for years, because they mostly disappeared during the nine years of almost full employment under a Labour-led government.

But they’re back. They’re part of New Zealand’s informal economy, where in hard times, people are forced to make a living in whatever way they can because they cannot find jobs or are unable to start businesses in the formal economy.  These are part of the working poor who are working very hard but who are not recognised, recorded, protected or regulated by the government.

There’s no question that New Zealand does have an informal (or underground) economy.  The question is how big is it and is it growing?

Unfortunately, we have no idea about the size of the underground economy in New Zealand because people working in the informal economy are not registered as businesses or employees and they do not pay taxes.

But think about the workers that you see around the place.  There’s the flower and strawberry sellers on the side of the road.  There’s those who do jobs “under the table” to top up their meagre income or unemployment benefit.  There’s those who work from home and even in garages as sub-sub-sub contractors making things, sewing or putting things together, there’s those who mow the lawns, do a bit of catering on the side and there’s the street vendors selling jewellery, fake watches and sunglasses in the streets.

Increasing poverty and the growing gap between rich and poor is one of the underlying reasons for the growth of the informal economy – even in first world countries.

It is is poverty that forces people to take up unattractive jobs in the informal economy and the low incomes that such jobs yield create a vicious cycle of poverty.

It’s not good for our economy or society either.  No taxes paid, no ACC levies funded, no health and safety, no minimum wage, no other protections. 

It’s almost like the car washers are a barometer of the state of our ecconomy and the well-being of New Zealanders.  If it is, then we’re in big trouble.

Sadly, with a government with no plan for jobs, I fear I’m going to see a lot more of my local car window washer.