Chart o’ the day: fire at will

Written By: - Date published: 11:54 am, June 9th, 2011 - 40 comments
Categories: jobs, unemployment - Tags:

Fire at will was meant to help young people into work, wasn’t it?

[graph should read ‘youth rates abolished’ not ‘introduced’. Sometimes with blogs you get what you pay for. Zet]

40 comments on “Chart o’ the day: fire at will ”

  1. Lanthanide 1

    This really is quite transparently stupid.
    You’ve marked two important points related to employment law, but left off all other external influences that affect youth employment, such as the global financial crisis and resulting recession (depression?).
    This graph, such as it is, really doesn’t convey any meaningful information.

    • Blighty 1.1

      that’s the point, one would think.

      The right is claiming that abolishing youth rates increased youth unemployment on the spurious logic that youth unemployment has risen since then.

      Equally, the right claims that fire at will is helping young people into work.

      the graph shows that using the right’s logic, fire at will has increased youth unemployment. Thereby, elegantly showing what a crock of shit the right’s logic is.

      • sean 1.1.1

        Since when has an economic policy that has been introduced into an economy had overnight results? The poster seems to think the graph would have climbed immediately if the claims of Key and the “Right” were true.

        On the same basis, it would be equivalent to a rise in the minimum wage immediately introducing inflation. Or changes to the tax system immediately resulting in massively lower/higher tax takes.

        From his graph it appears the youth unemployment was 6 months after the policy took effect, which seems pretty reasonable…..

  2. ianmac 2

    Seems to be a direct conflict with Mr Key’s words. (During question time yesterday?)

    • ZeeBop 2.1

      Lanthanide thinks is stupid, what’s stupid is we have a whole global class of people who brag how much their companies are destroying resources, using oil, and how much faster they can do it if they get a tax cut, and when they do lie, we send them to jail for fraud. Imagine that, someone lies that they just order the destruction of rain forests and they didn’t losing millions of investors their blood money. We don’t need not frigging pollution control, no tax rises!
      Madoff is a hero!
      Debt is ravaging the culture, the society, the children, all to keep debotrs from having to pay up.

  3. Colonial Viper 3

    Oh but if we hadn’t introduced Fire at Will, youth unemployment would be THREE TIMES worse than it is now!

    You Lefties WANT to keep people poor and unemployed, that must be it!

    Either that or the Righties want a flooded, over supplied, fearful, compliant pool of labour.

    Wonder which.

  4. But don’t you realise Zetetic? Without youth rates and fire at will, it would have been so much worse for young New Zealanders. Just like in the 90s, wages would have been so much lower than they were if it weren’t for the fact that collective bargaining was completely undermined.

    These right wing policies soften all those ‘blows’ the world throws at us. Of course we still feel the blows … but you just have to believe, Zetetic, you and I are always being saved from an even worse fate by these compassionately rational policies.

    [I don’t generally like sarcasm, but at the moment it just seems right.]

  5. toad 5

    It should say “Youth rates abolished” – not “introduced”.

    Lanth, I think Z’s intent is to refute the argument that the abolition of youth rates caused the spike in youth unemployment, rather than to imply that there is any causative relationship between the fire at will law and youth unemployment.

    • Lanthanide 5.1

      Sure, that is shown by the graph. But I still think it is misleading.
      Also, Zet’s comment after the graph is “Fire at will was meant to help young people into work, wasn’t it?”, if he was trying to draw attention to abolition of youth rates not increasing unemployment, then some mention of that in the comment would have made it much clearer.

  6. Afewknowthetruth 6

    How about that. Another peak oil related phenomeon that doesn’t get related to peak oil.

    I see OPEC don’t feel incline to pump more oil to save the world economy, and that oil prices have risen. How odd.

    Luckily the economies of Europe and the US are collapsing faster than ours, otherwise we might have to do something.

    • TightyRighty 6.1

      so, what your saying is that zets graph is garbage and a weak attempt to deflect attention away from the fact that youth employment rose after the abolishment of youth rates? cool thought so.

      someone has to read between the rails your thinking is on

      • Blighty 6.1.1

        but it rose even more and more sharply after fire at will was introduced.

        by your logic, fire at will has caused youth unemployment to rise.

        • TightyRighty

          of which the timing coincided with the lagging effect of employment figure reporting as result of the GFC maybe? no, that can’t be right, doesn’t fit with the labour party manifesto and current play book issued with each new post on the standard. Blighty, when you really understand economics, come back and argue with me.

          to save you having to use your brain, if price for a good goes up, demand for that good goes down, unless there are no readily substitutable goods. ie margarine for butter. so in this case, with ceterus parabis applying as even though i know you will be sitting down, drooling over the large button keyboard, i still don’t want to floor you, Adults for youths. as basic as it gets, but first principles are first for a reason

  7. PeteG 7

    If in red it’s suposed to be Your Rates Abolished the graph isn’t a good look, because from that time on the graph gradually climbs after a short lag – it would likely not be an instant effect.

    A significant climb starts well before the employment trial period was introduced – and it’s increase after that could as easily be linked to the financial crash which is a more likely cause.

    The whole graph looks amazingly like it charts the beginning of the financial wobbles in early 2008 followed by the collywobbles.

    Why don’t you just show a chart of numbers of people whose employment has been terminated within 90 days of employment, that’s actually relevant to the point you’re trying to make.

    • Lanthanide 7.1

      “Why don’t you just show a chart of numbers of people whose employment has been terminated within 90 days of employment, that’s actually relevant to the point you’re trying to make.”
      Because the National government, in their infinitesimal wisdom, decided that no such official statistics needed to be recorded. Presumably because that might show that the law was being exploited or not actually working properly, so it’s safer to simply say it is working as you expected and not risk any statistics saying otherwise.

      • PeteG 7.1.1

        I thought the unions were going to keep us informed of the predicted avalanche of <90 terminations. I haven't seen them making much of it.

        • Akldnut

          Sounds like you’re missing the point – there shouldn’t be a rise at all, with all the spin that was put on this as making it easier to employ out of work bene’s inclusive of youth this graph should be spiralling down, not upward.

          • PeteG

            The main point is that the financial conditions will have had much more influence than the 90 day trial.

            If you think the chart movement is all due to the 90 day trial can you explain the sawtooth variations in 2007?

    • Bazar 7.2

      I love these charts of the day. How they can take a small sub-set of data, and then graph it in the most ideal timeframe, and then have people draw a conclusion.

      In this case, we have the “Youth rates introduced”, which is stupid; it’s when they were abolished.
      So it became harder to employ young people. That’s a fact.

      Then we have the “fire at will”, which is nothing of the sort. But hey, suddenly the graph suggests that once the law was enacted, employers everywhere FIRED young employees.

      Of course the law never gave them that power, only the power to dismiss NEW employees. The laws affect on employment rates should be positive, the biggest point of contestion were employee’s rights.

      And finally, we have a graph titled fire-at-will, comparing the sub-section of youth unemployment vs a policy aimed at overall employment. But we don’t get that graph, just the youth subsection graph

      So yes, a brilliant graph.

  8. tsmithfield 8

    I agree with Lanthanide etc above who see the obvious problems with the graph above.

    The main problem is that factors such as global recessions far outshine the effect of 90 day employment laws etc. To tease out the impact the lessor variable has on unemployment, the much stronger effect first has to be removed through appropriate statistical methods(e.g. multiple regression). Quite often, when this is done, a completely different picture will emerge for the weaker variable.

    • Afewknowthetruth 8.1

      ‘To tease out the impact the lessor variable has on unemployment, the much stronger effect first has to be removed through appropriate statistical methods(e.g. multiple regression). Quite often, when this is done, a completely different picture will emerge for the weaker variable.’

      Absolutely correct.

      Then we have to go back one step further and determine what brought about the global financial crisis of 2008 (which is a euphemism for the start of the never-ending depression, of course).

      It couldn’t possibly have been the peaking of oil extraction (which ocurred over 2005 to 2006) in combination with rapidly increasing demand for oil from China and India, could it? No, that far too connected with reality and far too scary. Let’s look for some esoteric explanation that can be fixed with minor tweaking of policy settings.

      It will be interesting to see how much longer the bulk of the populace refuses to accept some fundamental truths, such as that without cheap oil the global economic system founders, and that when oil extraction goes into significant decline the global economic system will implode.

  9. Sam 9

    Agree with PeteG.

    If anything, the graph points to the abolishment of youth rates as the driver for high youth unemployment. Sure, youth unemployment has risen since the 90 day probation bill was introduced, however the graph clearly shows that the upward trend started in Q3 2008 – Well before the 90 day bill was introduced. aside from the small kink at the time the probation bill was introduced, its a pretty solid upward trend until Q4 2009.

    As far as I can see, the graph makes a pretty strong case for youth rates.

    • Draco T Bastard 9.1

      The graph doesn’t point anywhere you moron. That’s the whole point of the graph. There just isn’t enough information available to show anything but you’re here saying that it shows that the abolishment of youth rates caused the rise in youth unemployment.

    • Deadly_NZ 9.2

      As far as I can see, the graph makes a pretty strong case for youth rates.

      So in other words you do not believe in a fair days wage for a fair days work ??

      If you do believe that a fair days work, is worth a fair days pay. And those on the minimum wage are probably going to lose somewhere between 3 and 5 bucks an hour, out of a wage of 13 bucks per hour thats a cut of between 25% and 30%. Then under the fair days work, for a fair days wage. You then will also agree to take a paycut of between 25% and 30% without squealing?? No?? Oh but WE CAN HIRE A TEEN for less than we pay you. Oh and why not do you not realise that to drop the minimum youth rate to say 10 bucks an hour, means that ANY other rate above is probably due for the same cut, except of course the big bosses. They will get productivity bonuses for keeping the labour bill down, and even bigger bonuses for cutting said bill even further.

      There is an old saying . Be careful what you wish for. You may just get it.

      • sean 9.2.1

        1. It also means that adults will more than likely always be chosen over teens for positions where there is a choice between the too.
        2. “means that ANY other rate above is probably due for the same cut” – thats wrong. It is safe to assume that those adults on higher than the minimum wage are on that rate because they have experience in the role. Cutting the pay of your experienced staff is only going to end up harming your business in the long term, as said staff use their experience to get employment elsewhere.

        Business owners are out to be successful – deliberately undermining your business just so you can rip off your staff is not something that most business owners would bother even thinking about.

        • Descendant Of Smith

          But what usually happens is that the good, well run business who does employ people on a fair wage gets undercut by people who go for the lowest cost option.

          Having a minimum wage at a reasonable rate levels the play field somewhat between good and bad employers. It means that the business needs to be run on a service basis more than a cost basis.

          I’ve watched many a good business go because some jerk comes in and undercuts the market by only employing people on low wages.

          I know there is a right wing argument that they are not a good business if they can’t compete in that environment but that’s because often it’s only the financial bottom line that is looked at. The corporatisation of the economy only seems to look at the short-term financial bottom line.

          One US example that highlighted this was the doco on Walmart and their move into a town meant the local run family business couldn’t compete. He paid his workers a good livable wage, Walmart paid minimum wage (and had other advantages such as tax beaks and council support as well).

          It was pretty clear which workers were better off.

          The friend of small business the right wing is not – the friend of the corporates and the bankers it is indeed.

  10. Having another look at the graph one of the more striking features is that youth unemployment seems to be habitually high – 15% in 2007 (even while the revered youth rates were operating), then jumping to around 25% today. 

    Given how high it is, that raises the question of why that high possibility of unemployment isn’t an incentive for the young to return (or stay) at school or other training/education?

    Right wingers often say it’s because of the ‘easy’ life on the dole.

    But, there’s another explanation. By 15 or 16 years plenty of young people could have had an absolute gutsful of education as it’s currently institutionalised.

    Of course, there are also plenty of 15-19 year olds who have ‘begun to live’ – have worked, had children, been in the army, etc. so going back to school would seem pretty retrograde in terms of life’s momentum.

  11. burt 11

    Oh look another graph of the day that shows the impact of Labour’s economic mismanagement.

    • Deadly_NZ 11.1

      Hell burt how many times do we have to tell you take your medication. And the delusion that you are actually saying something of importance, will slowly fade.

  12. Descendant Of Smith 12

    Or it could be that youth employment is notoriously short-term given the propensity of employment in seasonal work such as tourism, working in cafes, the relative willingness to move from town to town and the lower likelihood of getting work in rural areas in particular, the movement in and out of study as courses commence and finish and so on.

    Add to this an increasing Maori and Polynesian youth population where large numbers of Maori also live rurally and the racism inherent in many employers about employing these young people.

    Years ago much youth unemployment was hidden as government departments had to take on so many school leavers each year – whether they needed them or not. Not a policy I disagree with either – it at least gave these kids a good transition from school to work when private enterprise had insufficient jobs for them.

    It’s funny when right wingers talk about work for the dole if you suggest that can be done by allowing government departments to take on more school leavers – it seems what they really mean is work for a pittance.

    • Deadly_NZ 12.1

      Most teens work in the fast food industry, and as a former manager of said fast food outlets. I can tell you they work bloody hard for the pittance they get.

      • burt 12.1.1

        Question: How has the 90 day trial period lowered the number of staff a fast food outlet employes ?

        • Descendant Of Smith

          One place I know hasn’t employed less staff – but it has churned through a few more quickly than it usually does.

          It also hasn’t employed any extras – there’s not an increase in employment just a greater churn.

          Bottom line is employers employer people when their is work to do and most people lost their jobs because there was no work.

          If you ain’t got a building contract, if you have lost your export orders, if there is no stock to kill, if no one is spending money in your shop, if no-one is buying any houses…. there are no jobs.

          Screwing the workers isn’t going to create anything.

          • burt

            Right, so the 90 day period makes no difference to the number of people unemployed. Of course the recession started late 2007 (early 2008 if you can’t face reality) would increase unemployment, as the graph shows.

            • Descendant Of Smith

              Yeah I’d pretty much agree with that. It doesn’t make any difference – it simply means that employers can churn through more employees – eg youth rates come in then what you would see is that 17 year olds would lose their jobs as they turn 18 – I recall a supermarket in Wanganui and another one in Hawkes Bay who were both very good at finding reasons to dismiss people when they turned 18 – a 90 day law just makes that so much easier.

              The 90 day law simply allows the poor employers to undercut the good employers in these types of low skilled areas.

              It also gives worker less job security and makes them more fearful and makes it harder for them to plan their lives, take out mortgages, etc.

              All in all it is simply a way of suppressing workers.

              The focus should be on creating employment rather than sideshows like this from the government that are only designed to keep wages down. But of course that’s what they want – it’s all about profit and return to shareholders.

              That’s what seems most clueless about this government – they seem to have absolutely no idea about how to create jobs for people.

              • RedJez

                I feel the above to be correct, in my experience in the hospitality industry.

                There is always a line of immigrants willing to work for less than the average kiwi youth, and now with the Fire at Will law, an employer can ‘pick and flick’ workers before they accrue holidays or are able to use sick leave if you write the contract right(wing).

                “Business owners are out to be successful – deliberately undermining your business just so you can rip off your staff is not something that most business owners would bother even thinking about”

                Ever worked in a bar? Or a duopoly, oops I mean a Supermarket?

                Also, I offer my explanation for the saw-tooth pattern for the first four quarters earlier in the graph. Opening and closing of the Immigration Tap.

                • J Mex


                  “I feel the above to be correct, in my experience in the hospitality industry.”</i?

                  Well I feel the above to be incorrect, based on my experience in the hospitality industry.

                  There is always a line of immigrants willing to work for less than the average kiwi youth, and now with the Fire at Will law, an employer can ‘pick and flick’ workers before they accrue holidays or are able to use sick leave if you write the contract right(wing).”

                  1. It takes around two months to get most new low skill hospitality employees up to and acceptable level of performance. It simply isn’t worth putting the time and effort into people and then firing them – unless they are still rubbish at their job after all that training. At that point the employer loses out because they need to start training someone new. It simply isn’t worth churning good staff. That is self evident to anyone who gives it half a moments thought.

                  2. By in large, kiwi’s are better at hospitality than your low wage immigrant

                  3. Firing someone before three months still means you pay out holiday pay. Your assertion is completely false. Sick pay – correct. But sick pay doesn’t kick in until 12 months anyway. I doubt many employers begrude paying sick pay to employees after 12 months – i.e I doubt many employers would prefer a staff full of new employees over a staff full of experienced staff.

                  Ever worked in a bar? Or a duopoly, oops I mean a Supermarket?”

                  Yes. And Yes.

                  • Colonial Viper

                    1. It takes around two months to get most new low skill hospitality employees up to and acceptable level of performance. It simply isn’t worth putting the time and effort into people and then firing them

                    Meh, 2 or 3 months is often enough for an employer to get through a seasonal peak and then dump the worker.

                    And if it takes you 2 months to train someone to be a dishy or glassy I suggest you revamp your training programme.

                    2. By in large, kiwi’s are better at hospitality than your low wage immigrant

                    Low wage kiwis are better at hospitality than low wage immigrants? Hmmm maybe.

                    In my experience Australians are generally better. But I suppose they get paid enough to actually take their jobs seriously over there.

                    • J Mex

                      Meh, 2 or 3 months is often enough for an employer to get through a seasonal peak and then dump the worker.

                      The provision for this already existed prior to the 90 day trial. You could already hire employees on a fixed term basis or a casual (no guaranteed hours) basis. The 90 day rule has not changed this.

                      And if it takes you 2 months to train someone to be a dishy or glassy I suggest you revamp your training programme.

                      If you think a glassy or dishy who has been working for 2 months is as efficient as one who has been working 12 months, then your theory bears no resemblance to reality.

                      In my experience Australians are generally better. But I suppose they get paid enough to actually take their jobs seriously over there.

                      A good NZ bartender will earn pretty much the same rate as an NZ bartender. The difference is the tipping culture which allows the Aussie bartender to take home nearly 50% more. Did you notice the embedded tipping culture last time you were there? or did you not tip?

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    The Coalition Government is taking early action to curb the surge in welfare dependency that occurred under the previous government by setting out its expectations around employment and the use of benefit sanctions, Social Development and Employment Minister Louise Upston says. In 2017, 60,588 sanctions were applied to beneficiaries who ...
    1 week ago
  • State of the Nation
    Ka nui te mihi kia koutou. Kia ora, good morning, talofa, malo e lelei, bula vinaka, da jia hao, namaste, sat sri akal, assalamu alaikum. Thank you for coming to my first State of the Nation as Prime Minister. Thank you for coming to a speech where I don’t just ...
    1 week ago
  • West Coast tourism attractions officially open
    Regional Development Minister Shane Jones will attend the official opening of two highly anticipated tourism projects on the West Coast today – Pike29 Memorial Track, dedicated to the memory of the Pike River miners, and Pounamu Pathway. “The Pike29 Memorial Track is a way to remember and honour the men ...
    2 weeks ago
  • Independent ferry service advisory group in place
    Appointments to the Ministerial Advisory Group tasked with providing independent advice and assurance on the future of KiwiRail’s inter-island ferry service have been made, State Owned Enterprises Minister Paul Goldsmith says. “It’s important for New Zealand that KiwiRail is focused on ensuring safe, resilient, and reliable ferry services over the ...
    2 weeks ago
  • Joint statement from the Prime Ministers of Australia, Canada, and New Zealand
    The Prime Ministers of Australia, Canada and New Zealand today issued the following statement on reports of Israel’s planned military operation in Rafah. We are gravely concerned by indications that Israel is planning a ground offensive into Rafah.   A military operation into Rafah would be catastrophic. About 1.5 million Palestinians ...
    2 weeks ago
  • Govt will deliver on expanded breast screening
    The coalition Government has made the first steps in delivering on its promise to  extend free breast screening to women aged 70-74, Health Minister Shane Reti says. “As part of the 100 day plan, the Government has now met with officials and discussed what is needed in order for the ...
    2 weeks ago
  • Government announces woolshed roadshows in support of sheep farmers
    The Government celebrates National Lamb Day (15 February 24) and congratulates sheep farmers on the high-quality products they continue to produce. Agriculture Minister McClay hosted bipartisan celebrations of National Lamb Day with industry representatives at Parliament this week to mark the anniversary of the first frozen lamb exports that left ...
    2 weeks ago
  • Speech: Address to the NZ Economics Forum
    It’s great to be back at the New Zealand Economics Forum. I would like to acknowledge everyone here today for your expertise and contribution, especially the Pro Vice-Chancellor, Head of the Waikato Management School, economists, students and experts alike. A year has passed since I was last before you, and ...
    2 weeks ago
  • Government tackling high construction costs
    The Government is focused on reducing sky-high construction costs to make it more affordable to build a home, Building and Construction Minister Chris Penk says.  Stats NZ data shows the cost of building a house has increased by 41 per cent since 2019, making housing even more unaffordable for Kiwi ...
    2 weeks ago

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