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.