Red Alert
Archive for the ‘Unemployment’ Category
From the Archive: Peter Fraser
Posted by Chris Hipkins on August 22nd, 2010Yesterday I attended the rally in Civic Square protesting the government’s latest attacks on worker’s rights. It’s always interesting to put events of today into context. This quote comes from Peter Fraser’s speech to Parliament on the Employment Bill back in 1945:
“…if we have learned anything … it is that the worst thing in the world is to go on making a depression worse by reducing incomes. At that time, the whole power of the State should be used to maintain purchasing-power … I declare that as long as this Government remains in office, notwithstanding what happens in the outside world, notwithstanding what happens to prices, even of our own commodities, we can still produce sufficient to house and feed and clothe adequately our men, women and children, and particularly the children. Never again will this country be permitted to return to the terrible conditions that prevailed before this Government came to office. It is indeed a terrible thing and a reflection on our civilization that, in a land of plenty, children should lack sufficient to eat…”
The old cliche goes that those who don’t learn the lessons of history are bound to repeat them. Ministers in the current National government obviously didn’t pay much attention during their history lessons. Since coming to office they’ve slashed spending on many vital public services, laid off thousands of public servants, and yanked away vital support from many of those who find themselves down on their luck. The purchasing power that Fraser alludes to is being eroded through their GST increase and the inflation it will cause, along with their unofficial ‘wage freeze’.
National’s latest moves to impose ‘fire at will’ provisions on all new employees and sell their holidays will only make matters worse. National promised Kiwis they were ‘aspirational’ – the question is for whom? It certainly isn’t ordinary hard-working Kiwis who are struggling with rising costs, stagnant wages, and lower levels of support from their government.
Unemployment up, still no plan…
Posted by Chris Hipkins on August 5th, 2010The latest unemployment stats make for grim reading. Over 19,000 Kiwis have joined the ranks of the unemployed in the past 3 months. Since National has been in office unemployment has increased by 53,000. So what’s the National government focused on? Well they’ve spent most of this week trying to doctor figures to hide the fact that the wage gap between New Zealand and Australia has grown during their time in office, despite John Key’s pledge to make closing it his “fundamental priority”.
We should never regard unemployment as merely a matter of statistics. These are real people with real lives, real families, real homes, real mortgages, real bills to pay. The increase in unemployment from 6% to 6.8% in three short months marks thousands of individual tragedies. It’s a much bigger increase than anyone was predicting and highlights how adrift this government have already become.
Back in May John Key was happy to pronounce that his government is on the right track due to falling unemployment, so by his own standard they must have jumped the track in the past 3 months. Where is their plan? The Jobs Summit was a joke. The cycleway has failed to produce the thousands of jobs Key promised. Gerry’s bold plan to mine in National Parks has been stomped on. So what’s next? The thousands of Kiwis struggling to find work are keen to know…
I’m angry
Posted by Clare Curran on July 31st, 2010I’m angry. And reading Chris Hipkin’s post below has just made it worse. Not at Chris of course, but at the cost of economic insecurity to humanity which Walter Nash talked about.
I spent this afternoon doorknocking in South Dunedin, one of the poorest and most densely populated parts of our country. People are insecure and afraid. They either have jobs that don’t pay much and they haven’t had a pay rise for a long time, or they are unemployed and can’t find jobs. They can’t make ends meet. They don’t turn their heaters on.
One family said “we can’t afford to eat meat. We used to be able to”. A lot of families said we don’t know what to do when the GST goes up. Tax cuts mean nothing.
Everything is more expensive. And they feel they are being made to pay. One woman, a sole parent with three teenagers told me she wants to work but can’t find work. “There is no work”. And she said she was being made to feel guilty for being on a benefit when there was no work anyway.
She is afraid for her kids getting jobs and being exploited through the 90 day law that means an employer can sack someone (often young people) in the first 90 days of a job. She joined the Labour Party today. Had never even thought about it til I turned up on her doorstep.
As Chris writes below (thanks Chris) Walter Nash said: “Men and women are not free to develop their own souls, to express their own individual personalities, to contribute according to their individual capacities to the world’s cultural inheritance – they are not free to do any of these things so long as the fact and fear of economic insecurity confronts them. Only when this fear is removed do they become in the fullest sense of the term a free people.
This country is becoming more and more economically insecure. What’s this government doing? Nothing but making their lives harder and making them more afraid. I’m angry.
Update: I’m so angry, I missed out the bits about the number of elderly people I personally encountered today (and they are constantly contacting my office) who are confronting losing their hour and a half per week of home help. Doing a bit of housework, preparing some meals, helping with some of the chores aorund the house they can no longer do. God help us that these elderly citizens who have contributed to our country, have paid taxes, went through the Great Depression, brought us all up and now they get treated like this at the end of their lives. Do the math! Helping people stay in their homes and lead a live with value is actually more cost effective than taking away their independence and requiring them to be put into a home. Not taking into account the human rights and human dignity aspect. I think you can tell I’m angry.
Goodbye to the ungrateful boss
Posted by Darien Fenton on June 24th, 2010The recession’s bite is easing and according to recent research, twice as many workers as last year are looking to change jobs. A workplace survey conducted by Chase Research reveals that one in 3.5 NZ workers have applied for a new job in the last six months. There’s a 25% increase in those actively looking for new jobs, and a 15% increase in those thinking of looking for a new job.
Chase Research say the increase is a result of management ignoring workers after the financial crisis. They say that “these are the workers that management asked to accept salary freezes, to work unpaid overtime and change working hours as a result of the financial crisis.”
Some would say that’s the market at work. Perhaps it is, but in my experience, there’s always been an unevenness in sharing the profits in the good times and expecting workers to bear more than their fair share of the losses.
Now we’re supposedly in better times, it seems that workers are on the move and who can blame them?
The problem is that we lose skilled and productive workers to another employer – often in another country; employers lose their investment in recruiting and training good staff and we continue to think that working longer hours for less pay is the way to improve New Zealand’s productivity.
BUDGET 2010: The Sucker Punch
Posted by David Cunliffe on May 25th, 2010We all know Budget 2010 was full of broken promises – from NOT raising GST – to being “fiscally neutral” while borrowing an extra $1.1 billion to fund tax cuts - to being “fair” while giving a third of all those tax rebate $ to the top 5%.
Most people now realise that the gains they thought they might get are more apparent than real: the proof – even on the Governmnet’s own numbers average gross incomes don’t catch up with inflation unitl 2014! That’s two elections away!
Most now know the results are economically desultory – the current account blows out to 7% of GDP, growth is static (taking 7 years to accumulate a measley 1% extra), and what empoyment growth there is is largely unrelated to Budget meaures.
What has become clearer as the debate has progressed is just how cynically National has attempted to buy votes through a Budget increasingly seen as highly political. John Armstrong - who is no Labour acolyte to say the least – politely nailed that in Saturday’s Herald.
The game afoot is this: fool middle income voters into thinking they have a win. Push through much larger tax cuts for the upper end under this smokescreen. Deliberately stretch the government balance sheet by borrowing more to fund the cuts. Begin compressing public services, but slowly, and hope the rosy glow lasts until the election…
But Bill English could not help the Freudian slip about selling off KiwiBank. (As if anyone believes that a mom-and-pop share issue would mean shares didn’t end up in institutional hands eventually – remember Contact Energy?)
This is important as a foretaste of things to come: extensive privatisation of assets the public already owns, and deep Budget cuts to balance the books that this Government has deliberately run up by cutting taxes too far. Both add up to shrinking the state, and with it the essential services that all Kiwi families need.
Budget 2010 is not a step change, and not a step up. It’s a set up - a sucker punch for the full flowering of the Right’s agenda should New Zelanders allow them a second term.
Trotter gets it right
Posted by Clare Curran on May 22nd, 2010Haven’t been feeling on the same page as Chris Trotter for a while, but think he nailed it with his piece on the Budget in yesterday’s ODT (and other papers). I’ve linked to it from his blog Bowally Road
He described the Budget as self serving lies. Which it is. Designed to make people think they’re getting something, when in reality they’re losing.
But this government may not be as clever as they think they are. I haven’t come across anyone in the community yet who thinks this Budget is going to make them better off. Short-termism doesn’t always pay off.
I know my Dunedin South constituents will find tax cuts and benefit hikes fade pretty quickly as the GST rise kicks in and electricity, rents, mortgage rates start to rise along with petrol ACC levies, you name it. Pretty dire. And then there’s the prospect now being raised of selling off some of our prize assets.
Not to mention the fact that people’s wages aren’t going up and don’t look much like they will. Unemployment in Dunedin leapt from 4.9% to 6.3% in the last quarter.
I wonder who the people are who did get a sense of hope and a boost out of this Budget.
Trotter says:
Perhaps it would all be bearable if, in return for the extra $300-$500 per week we’re allowing them to keep, our captains of industry, financial wizards and heroic entrepreneurs would guarantee the “step-change” this country so desperately needs.
But if History is any guide, that’s not what we will get. If History’s any guide, we’ll just see more of our industries fall into the hands of foreigners; more “Mum & Dad” investors lose their life’s savings; more holes in the ground; more half-finished palaces; more angry denials of any and all social responsibility.
And why, in God’s name, would we expect anything else? The Rich did not get rich by giving – but by taking. It’s what they do. It’s all they’ve ever done.
Turia: blame the unions
Posted by Chris Hipkins on May 20th, 2010Tariana Turia has come up with a novel way of distracting attention away from the Maori Party’s vote in favour of increasing GST. During her First Reading speech on the Tax Bill this afternoon she decided to claim that the unions were responsible for Maori unemployment. Here is a direct quote:
“…in the 1980s when we had really high unemployment our people knew what it was like to be on the training-go-round. Through access training, through steps programmes, you name it. And did any of those young people get trained in real jobs skills, no they did not, and why didn’t they, because the union movement wouldn’t allow the kind of skills training that needed to take place for those young people that would have given them really employable skills in the workforce because they were afraid that by training these young people up in those skills that they would take jobs away from those who were working…”
Turia went on to claim that during the “9 years of plenty” Maori didn’t benefit from lower unemployment, despite the huge drop in Maori unemployment and the massive increase in Maori unemployment since her party decided to prop the National Party up in government. Check out the speech:
National and Maori
Posted by Grant Robertson on May 16th, 2010The Herald on Sunday editorial wades into the state of the National Party’s relations with Maori.
The biggest worry about the state of the relationship between National and the Maori Party is that the Prime Minister doesn’t seem to have noticed that there is a problem.
It certainly was a bizzare few days last week as John Key’s political judgement seemed to totally desert him. It would be interesting to know what David Farrar’s polling is telling National about its relations with Maori, but activities of the last week indicate they seem to think it is doing them some damage.
In any case his dumb joke about being eaten by Tuhoe is not really the point here, its where it fits in his view of relations with Tuhoe and Maori in general. As the editorial says
But Tuhoe spokesman Tamati Kruger has made it plain that it was the joke’s timing and context, not its content, that was problematic. A joke’s reception depends entirely on the quality and depth of the relationship between the jokester and his target. To say Key’s comment, a few days after a major slight, was ill-timed and misjudged is an understatement.
Treaty negotiations are a critical element of race relations in New Zealand. Their success relies on good faith and honesty. I am not saying Labour got everything right in this space, but it is essential that both parties in a negotiation know where they stand. I think Michael Cullen particularly understood this in his time as Treaty Negotiations Minister. When Tariana Turia says John Key’s approach lacks “integrity”, that is a problem.
So, where to from here? National’s relationship with the Maori Party is seemingly on shakey gorund. But what is more important for the long term political landscape is not what this means in terms of the Maori Party, but of Maori voters.
With Maori unemployment, especially among young people still sky high, a rising cost of living and the prospects of tax shuffle that will be unfair to many Maori families, Maori voters will be wanting to see their representatives find solutions to those problems. Not propping up a government that seems to have lost interest in their concerns.
Wong is wrong on unemployment
Posted by Raymond Huo on May 10th, 2010Unemployment is down for the time being, the job market is looking up and everyone is starting to feel better about the unemployment rate as we make our way out of the recession, right?
Wrong, very wrong. The Asian unemployment rate has hit a record high of 9.8 percent with 1200 Asians being forced to join the Dole queue since February.
There are currently 22,400 unemployed Asians in New Zealand and Ethnic Affairs Minister Pansy Wong does not seem concerned nor does she have any good ideas to tackle the problem.
I have asked Minister Wong what she is doing to help curb the spiralling unemployment rate amongst Asians and she has offered up the idea of business forums.
Has the government not learned from last year’s dismal Job Summit that talk-fests don’t work?
The business forums will be run by the Office of Ethnic Affairs, yet in a response to a Written Question I recently lodged she said the Office of Ethnic Affairs does not operate to create jobs.
No wonder she is so blasé, or maybe just confused. Business Forums run by an office that doesn’t help to create jobs? This sounds like an empty gesture doesn’t it?
The Asian community needs a strong leader who is going to offer up real solutions to this problem that is affecting thousands of Asian people across New Zealand.
Under her watch as Ethnic Affairs Minister since National came into power, the Asian unemployment rate has grown steadily above the national average.
Where’s the plan for jobs?
Posted by Chris Hipkins on April 9th, 2010John Key promised that under a National government we’d catch up to Australia. He has succeeded on one measure. When he took office we had a lower unemployment rate than the Aussies. Under Key we’ve not only caught up, we’ve overtaken them.
In the past month 20,000 new jobs were created in Australia, the 7th straight month the number of jobs increased over the ditch. 215,000 jobs have been created in Oz in the past 6 months. Here in New Zealand 60,000 Kiwis have lost their jobs since National took office.
National has had a year and a half to implement their plan (or come up with a new one) yet they’ve spent it sitting on the sidelines. By contrast the Labor govt in Aussie has invested in a bold stimulus package, with a particular focus on R&D and education (unlike National who have cut both). Now National wants to raise GST too.
I hope this year’s Budget will demonstrate that National does actually have a plan. If they don’t, I suspect even more Kiwis will be crossing the Tasman.
A kick in the pants or a kick in the guts?
Posted by Grant Robertson on March 24th, 2010The thing that depresses me the most about National’s so-called welfare reforms is that they are fuelled by outdated Tory thinking. Here was me thinking that the ‘modern’ National Party was not bogged down in ideology, and was focused on “what works”. But no, it is a “kick in the pants” and time to stop “living the dream”. For National unemployment is the fault of the unemployed, and if only they pulled their socks up everything would be all right.
I have said before on this blog that I, along with most people, am appalled if people rip off the system. Where that happens we should crack down. But let’s also not accept the myth that the current system is all carrot and no stick. At the moment people on the unemployment benefit have to be seeking work. Work and Income monitor benefit recipients closely. It is true that there is no work test for DPB recipients. So much for family friendly National. I am anxiously awaiting to hear of the thousands of jobs conveniently timed for 9-3pm that have flexibility over sick days.
The experience of Trevor in the Dominion Post is much more like the reality of the people who I have seen in my office in recent months. They want to use their skills. They, and we as taxpayers, have invested in their skills, but the jobs are not there for them at the moment.
A kick in the pants might sound good, but in the end if we are to actually move people off benefits and into work it requires a constructive, active approach to go with clear rules. Most other countries we normally compare ourselves to had massive investments in job creation through the recession. We had a cycleway.
The reality is this policy does not have any vision for how we move more people into work, because it is not about helping to create jobs, or to find ways to work with long term unemployed. It is straight out dog whistle politics that seeks to re-inforce an image of ‘bludging no hopers who are a drain on resources’. No matter the evidence of the thousands of people who lined up for jobs at a supermarket in Auckland recently. If it plays well with some prejudices that might exist in the electorate then it seems National want to go there.
What did smile and wave say about aussie?
Posted by Trevor Mallard on March 12th, 2010JP Morgan report today that the unemployment differential between NZ and Aussie is the worst since records have been kept.
Remember we had lower unemployment than Aussie when Key became PM. Still not 1k of the cycleway built as part of his recovery package nor 1 metre of fibre in the ground.
| Press Release by JPMorgan Australia Limited at 7:42 am, 12 Mar 2010 |
* The bullish case for AUD/NZD can be summarised in the very simple mantra that ‘NZ is not Australia in terms of the level of economic activity. In short, NZ had a much worse recession than Australia and is recovering much more fitfully. One specific illustration of this is the unprecedented divergence that has opened up between the unemployment rate in the two countries. We first highlighted this a few months ago and since then the divergence has become even more acute (Australia releases February unemployment data tonight, after the RBNZ policy meeting). As of December the NZ unemployment rate was 2% higher than in Australia, which is the widest gap since the NZ series was first reported in 1985 and 2.8% wider than the average differential over the past 25 years.
Lies, Damned Lies and Statistics
Posted by David Cunliffe on February 25th, 2010Bill English has been “trying it on” in his use of statistics, no doubt to try to get off the defensive around inequitable tax policy, his lack of a plan for growth and an embarrassingly strong performance by NZSF and ACC in the recent Crown Accounts.
Mr English alleged in a release last week that revisions to GDP data issued late last year showed the economy grew by “less than 1% a year”.
The Government Accounts had been released the day before. Labour had attacked the government for having suspended superannuation prefunding and cutting ACC, when the investment performance of both had risen strongly.
Based on the Statistics NZ revised data, the average GDP growth for those three years was actually 1.74%.
The more relevant GDP growth benchmark, averaged over Labour’s last term in office, was 3.2% GDP growth per annum.
That was significantly higher than during National’s previous term in office of around 2.6%.
It was higher, year on year, for the three year period Mr English quoted, than the UK (2.6%), US (2.5%) or OECD average (2.3%)
This strong and sustained economic expansion was achieved alongside:
- a massive reduction in Crown debt (net debt cut from 24.8% of GDP to zero);
- unemployment of 3.4%, the lowest in 21 years (less than half of today’s 7.3%)
This was achieved precisely because Labour did not follow Mr English’s advice in 2005 and 2006 to give early tax cuts. In short, not taking Bill English’s advice in 2005/06 meant NZ could afford a Budget in 2008 designed to support Kiwi jobs through the recession.
So if that was the real big picture, how did Mr English come up with his odd numbers?
- First, using highly variable quarterly GDP statistics, not the more aggregated and reliable annual numbers
- Second, choosing a short period impacted by the global recession to bring the average down.
- Finally, by taking advantage of retrospective statistical revision called chain linking whereby when recent data falls sharply (for example due to the recession) previous years are “smoothed” down to fit the trend.
The bottom line is National would give its right arm to have economic performance numbers today that matched the average under the last Labour government.
We have a Minister of Finance who has shown himself not above skewing data for political ends.
Lesson for Bill English: “when in a hole, stop digging”.
The Youth Minimum Wage…history repeating or just a distraction?
Posted by Jacinda Ardern on February 15th, 2010You might have heard- Roger Douglas plans to introduce a private member’s bill to bring back the youth minimum wage. After a bit of debate on twitter, I thought it was time for a bit of a chat on the subject that wasn’t constrained by a 140 character limit.
First a bit of history. Prior to 2001 the youth minimum wage applied to 16-19 year-olds and was set at 60% of the adult minimum. I remember those days, and so will a lot of people my age. The first big change was to lower the eligible age for the adult minimum wage from 20 to 18 years and raise the youth minimum wage in two annual steps to 80% of the adult minimum wage.
You might have heard the speculation then- that a change as significant as this would lead to fewer young people being employed. Treasury debunked that myth when in 2004 it concluded:
“We find no robust evidence of adverse effects on youth employment or hours worked. In fact, we find stronger evidence of positive employment responses to the changes for both groups of teenagers.”
So what of the complete abolition of the youth minimum wage, which happened a few years later via Sue Bradford’s private member’s bill. The Otago Management Graduate Review concluded that “the effect of minimum wage rises has been exaggerated in the literature, and that any effect of minimum wages is very hard to distinguish from other variables that could affect teenage employment.”
And there’s the crunch. How do you robustly separate out the variables? Well here’s my view. First and foremost, this is about fairness. We could easily argue that more elderly people would be employed if we made it legal to pay them less than everyone else solely because of their age, but that wouldn’t make it right. And secondly, whether differentiated wage rates has any impact on employment levels is a highly debateable point.
Rather than a bill paying our young people less, we should take a look at the real problem- that 1 in 5 young people are leaving school before they hit 16, and they are entering a job market where only 10% of new jobs are unskilled. There’s our problem. Now lets get onto the solution bit.
Unemployment stats grim reading
Posted by Chris Hipkins on February 4th, 2010The latest unemployment stats out today make for grim reading. While the National government keeps claiming they have taken the ’sharpest edges off the recession’ an extra 18,000 New Zealanders found themselves out of work in the last quarter of 2009. 168,000 New Zealanders are now unemployed, the highest level since the in 16 years.
The National-led government has totally failed to come up with any sort of plan to deal with the rising tide of unemployment. In fact, they aren’t even concerned about it. Last year John Key said he was happy with the way unemployment numbers were tracking.
This time last year National’s rhetoric was all about creating jobs. Key called a Jobs Summit that he claimed would be a ‘do-fest’ not a ‘talk-fest’. Kiwis are still waiting to see any evidence it has led to new jobs. In fact the government’s whole recession stimulus package has produced just 2,300 jobs, not that many when you consider 3,500 people queued outside a single new supermarket in South Auckland a few weeks back to apply for the 150 jobs going.
Meanwhile, over the ditch in Australia, where they have an active government, unemployment is falling. Their unemployment rate is actually 2% lower than ours and that gap is likely to grow. So much for the National Party’s hollow promises about catching up with the Aussies…
