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30% of Chch workers jobless by quake

Written By: - Date published: 9:08 am, March 24th, 2011 - 14 comments
Categories: jobs - Tags:

62,000 Christchurch workers are now receiving special earthquake payments. Most of these workers’ businesses have been closed by the earthquake and plan to re-open at some point. Their wages are subsidised by up to $500 a week. But 6,300 of them have lost their job permanently and they are getting a special redundancy benefit of $500 a week. That’s about 30% of Christchurch workers out of action and 3% without the hope that their workplace will re-open. For comparison, there are more people getting the special redundancy payment then there were on the dole in Christchurch before the quake.

That the number is still rising so rapidly is worrying. 33,000 people were getting the wage subsidy or redundancy benefit on March 5, 45,000 a week ago, and now 62,000. Originally, the government only expected to cover 42,000 workers. There’s a real concern that closed businesses that are only being subsidised for their workers’ wages up to $500 a week are finding paying the rest of the wage bill on top of that too hard and are folding.

These numbers only tell part of the picture. Workers whose places of work are open but they can’t get there for quake-related reasons don’t get support (and Paula Bennett doesn’t give a damn). Workers for foreign-owned businesses can’t get the subsidy or redundancy payment. Nor can people who lose their jobs as an indirect result of the quake as jobless workers cut their spending and people flee the city.

The last payments of wage subsidy were made last week and the last redundancy benefit are set to be paid next week, then the scheme will expire. That obviously can’t be allowed to happen. It would send many more businesses to the wall and fling people whose jobs were destroyed by the quake into even deeper poverty. Why it’s taking the government so long to announce the second round of their plan and give some surety to these workers and their families, I just don’t know.

There’s no question that these workers need our support now and that we need to plan for the future. A small compulsory income insurance payment from wages, functioning like the EQC levy, to give affected workers full wage cover for up to, say, 6 months, when disaster strikes in the future. Trying to deal with this problem on the hop is stupid.

14 comments on “30% of Chch workers jobless by quake ”

  1. Lanthanide 1

    “Workers whose places of work are open but they can’t get there for quake-related reasons don’t get support (and Paula Bennett doesn’t give a damn).”
    They are eligible for all the regular unemployment benefits, but with the 12-week (13?) stand-down period waived. People who fall out of the general criteria are assessed on a case-by-case basis, also.

    “Workers for foreign-owned businesses can’t get the subsidy or redundancy payment.”
    The justification being that multinationals should be able to afford to pay their staff, and should also have the resources to be able to set up alternative operating premises. I’m not sure how true that is, but I don’t think it’s an unreasonable position to take.

  2. Bill 2

    Isn’t Unemployment Benefit meant to act as a form of compensation for those out of work? And if workers lost their job and had a redundancy package…actually, that rule has gone now. Redundancy payments don’t impact on eligibility for a benefit.

    So back to my point. If Unemployment Benefit is seen as ‘not cutting the mustard’ with regards workers in Christchurch who have lost their jobs, then why is it viewed as adequate for other unemployed workers?

    Or put another way. Why aren’t Unemployment Benefit levels raised to the same level as the ‘special redundancy benefit’ if that is what is being seen as a necessary and reasonable level of ‘income’ for an unemployed worker?

    Could it be that the ‘special redundancy benefit’ is merely a mechanism designed to see any discussion or furore over inadequate benefit levels headed off at the pass?

    • Herodotus 2.1

      Could it be that the ‘special redundancy benefit’ is merely a mechanism designed to see any discussion of inadequate benefit levels headed off at the pass?
      Perhaps pollys dont want to review the cost to live adequately in NZ, because then we may find that even those in the top tax bracket of income earners also just manage to survive, and then the debate will be on the low level of wages/benefits that NZ pays. Then both the right wing parties (Blue and Red) would have to admit to failure in delivering successful policies and a vision.
      But you are on to it 😉

    • Eddie 2.2

      you’re right, bill. there’s an implicit comment that these are ‘deserving poor’ whereas other unemployed only have themselves to blame

  3. tsmithfield 3

    “62,000 Christchurch workers are now receiving special earthquake payments. Most of these workers’ businesses have been closed by the earthquake and plan to re-open at some point.”

    I don’t think you are quite correct in your interpretation equating special earthquake payments with business closure. Many businesses have taken the government money even though they have remained open. There is a criterion for significant loss of trade. This doesn’t necessarilly mean complete closure of the business. Just that the business will find it difficult to survive without government help. There are a lot of businesses in the city that are able to remain open and keep their staff employed due to the government help that might otherwise have not been able to do so.

  4. I wonder how many of them voted for John Key and his promises of huge tax cuts.

  5. apples are yum 5

    Well it’s a circular argument: to have UEB levels high enough to reach “adequate lifestyle levels” you’d need an awfully productive (and heavily taxed) economy to fund it. Which would require a lot of workers at good wage levels, which would result in unemployment levels almost nil. Which means not much UEB payments required.

    I’ve come to the conclusion that unemployment and taxes are high not because captialism demands it, but because one man wants to feel superior to another. Both “problems” revolve around uncreative and wasteful use of resource. I’d like to think both the right and the left will pay careful attention to the coming economic and social problems in Christchurch and use them to the advantage of the whole country – designing new ways for how commerce influences life in NZ. But I’m certain it won’t happen. The right will continue to spit that welfare is unaffordable and the left will continue to wail it’s essential. Wake me up if anything new happens.

  6. M 6

    ‘I’ve come to the conclusion that unemployment and taxes are high not because captialism demands it, but because one man wants to feel superior to another.’

    The need to feel superior for many I think is innate and is amply demonstrated by the proliferation of SUVs or luxury cars, the yearly trip overseas, oversized brick and tile homes with the obligatory two bathrooms and lounges and the toys that many favour like jet skis, boats and an endless need to be entertained by the fad du jour.

    People like this are fast burning through the world’s resources and are a right turn-off – what on earth will they leave their children? Nothing.

  7. grumpy 7

    You need to understand that for many Christchurch businesses activity has just “stopped”. The construction industry has been badly affected, not only by the recession but now by all building activity ceasing while builders go off on EQC inspections, shoring up buildings etc.
    All the new work that sub trades, suppliers were involved in is either cancelled or postponed indefinately. In this case the employer can either fire his staff and finish up with no capability of carrying on in the futre when things pick up – or avail themselves of the govt. package to keep people employed and the business more or less intact for when the work starts up again.

  8. Tiger Mountain 8

    Commiserations to the christchurch workers. It will be interesting to see as the months go by how the Natz reconcile the “deserving” unemployed of Canterbury devastated by the quake, and the “undeserving” unemployed ‘bludgers’ also devastated, but by recession rather than natural disaster. In no way can loss of a job by the latter group be equated with the extra suffering of the quake affected, but the common tie is state assistance.

    The contradiction between doing the right thing by Canterbury, and implementing the two Paula’s WWG bene bashing in a high unemployment environment, may just blow the welfare issue open for some serious consideration from more people apart from the usual idealogues and sadistic bene haters.

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