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Jobs & Manufacturing

Written By: - Date published: 7:01 am, January 31st, 2013 - 75 comments
Categories: exports, jobs - Tags: ,

One of the many big problems National is failing to resolve is the lack of jobs, as they provide a 14-year high in unemployment – even after exporting 180,000 Kiwis to Australia under this government.  Indeed if we added them in, the unemployment rate would double to 13.8%.

It seems hard to remember a mere 5 years ago before this government with less than 80,000 unemployed – noticeably less than half the current number, even if we don’t include the new Australian residents.

More than 40,000 of those job losses have been in manufacturing.  And as it’s been found in various research that manufacturing jobs have a job multiplier of 2.9 (higher for high-tech manufacturing), that means about 80,000 other indirect job losses.  Combined that’s over 2/3rds of our unemployment rate, just by getting back to where we were when National took office.

It makes sense to have a manufacturing strategy.  Part of that has to be tools for a lower and much less volatile exchange rate.  No matter what the Herald and Steven Joyce say, that exchange rate has driven manufacturers off-shore and is driving more of them there.  Skellerup, Fisher & Paykel, Gallaghers, and many more – successful NZ companies that are exporting jobs instead of products.

It makes no sense for us to have the 9th most traded currency in the world.  And if we want to export anything other than milk powder (and there’s only so much milk powder we can make) it makes no sense for the dollar to be trading at over US80c.  The US, UK, Japan, Switzerland have all printed money to devalue their currency – we’re not on a level playing field.  Singapore and China have always manipulated their currency to advantage their exporters, and strengthen their manufacturers and jobs – the playing field has never been even.

So what do we do about it? Sit back, hands-off and tell exporters and manufacturers to work harder and smarter (as though they’re not already)?  Tell them that working some of the longest hours in the world isn’t enough?  Let them export jobs instead of products, as keeping the exchange rate high so that TVs are cheap is just too important?

That’s what I expect from National, but I’m also sure that the combined opposition manufacturing inquiry will come up with better ideas.  And I’m looking forward to seeing them enacted after 2014, and our backbone manufacturing businesses flourishing again – and along with them: jobs and wages.

75 comments on “Jobs & Manufacturing ”

  1. geoff 1

    We’ve covered this before but, I can’t remember, what’s the argument for not lowering the interest rate?

    • CV - Real Labour 1.1

      Makes it harder to borrow money from overseas. And this govt needs to borrow a lot of money weekly. As Winston pointed out in his speech, Key and English have now borrowed more money than the rest of the history of NZ Governments combined.

      • tracey 1.1.1

        For real???

        This figure needs to be repeated over and over and over by opposition parties…

        How much does it work out per household?

        • CV - Real Labour 1.1.1.1

          Well I hope Winston is right with his claim…if you get a chance listen to his speech. He really sets the standard.

          • tracey 1.1.1.1.1

            Thanks will do

          • geoff 1.1.1.1.2

            Link?

          • mike 1.1.1.1.3

            Yeah I listened, really brilliant speech. Savaging Key and National. Mind you, I seem to recall him doing the same to National back in ’96, right before he joined them to form a coalition…

            “It was widely expected that he would throw his support to Labour and make Labour leader Helen Clark New Zealand’s first female prime minister. Peters had bitterly criticised his former National colleagues, and appeared to promise that he would not even consider a coalition with Bolger. However, after over a month of negotiations with both parties, Peters decided to enter into coalition with National. Michael Laws, the party’s campaign manager, later claimed that Peters had already decided to join forces with National and used his negotiations with Labour simply to win more concessions from Bolger.”

            • Fortran 1.1.1.1.3.1

              Sadly Winston is still a hypocrite, and will follow the Baubles wherever.
              And not pay back the $148,000 he stole from Taxpayers.

              Can you trust him – answer “Yes we can” or “Not bloody likely”.
              I know where I stand.

              • CV - Real Labour

                yeah, in the final analysis can you trust Winston? If he gets 6% or 7% next election he’ll once again hold what iPredict calls the “balance of power”. Could be very bad news.

                • NoseViper (The Nose knows)

                  But what makes Winston worse than what we have now and indeed what we may get? At least he fibs and prevaricates and orates with panache. I’d trade in quiff whatsisname from Ohariu Belmont for him.

              • McFlock

                Yes we can.

                He is cunning, but competent and not entirely unprincipled.
                As opposed to the incompetent, unprincipled idiots we have in government at the moment.

              • mike

                Then ask yourself which of the two major parties is more likely to sacrifice principles & cough up bigger baubles in order to take power? (Given that Labour will probably need the Greens also.)

                Another ‘mind you’ though, Winston might have learned something from the consequences of his ’96 decision.

                “New Zealand First was severely mauled in the 1999 elections, which saw Labour oust National from power. The party suffered for the rash of party-switching. Additionally, there was a wide perception that Peters had led voters to believe a vote for New Zealand First would get rid of National, only to turn around and go into coalition with National. New Zealand First collapsed to 4.3 percent of the vote, and would have been shut out of Parliament had Peters not managed to hold onto Tauranga by 63 votes.” (From the same wikipedia article as above.)

                Bottom line though, never forget that Winston’s in it for Winston.

        • David H 1.1.1.2

          Well they have borrowed (I think) about 42 Billion bucks. devide that by oh say 4.4 million that gives you a per person. So thats how many zero’s in a billion 9
          http://answers.yahoo.com/question/index?qid=1006030809051

          so we have 42000000000
          devide that by the population of NZ
          4400000
          equals
          9545.45454545454

          Just by my long forgotten maths lesson But in any case it’s a lot of money and at 10 grand pp then you could say that on Average (is what 4.2 people per house hold?) The sum owed by each household is about 40,000.

          Now tell me I can’t count. but please point out, where I went wrong

          • Fortran 1.1.1.2.1

            Where do you get your Govt borrowing figures from please.

            • David H 1.1.1.2.1.1

              Thats why i used words like ABOUT It is a figure I heard in a question in the house. as I also don’t know, and Can’t be bothered finding out the exact number of people in NZ so i I used the last figure I heard hence the words like About, average, Oh say and I think. All of these should go to show I was making a best guess. If you want to correct the figures, please do, but it’s too hotfor me to go dig thru dusty, boring, numbers.

      • geoff 1.1.2

        Thanks CV, so could the reserve bank print money to cover the extra lending costs?

        • Andre 1.1.2.1

          Greens released this today. http://t.co/QEFq0Ggt Previously unseen Reserve bank internal paper from May 2012: loan to valuation ratios limit house inflation

        • CV - Real Labour 1.1.2.2

          Sure, although we should bear in mind that the adjective “print” is a bit misleading in this context: the Reserve Bank would simply electronically credit the appropriate Government accounts as required.

          • geoff 1.1.2.2.1

            Yep, bit of pejorative and not really acurate either. i guess what i was driving at is would this be a different thing to QE?

      • aerobubble 1.1.3

        And where did it go? Sure some on higher welfare costs but welfare has a small job multiplier effect (think no case managers, more charity workers, more health problems, etc from a lack of welfare), its paying down debt that doesn’t (the big tax cut to the wealthy the pushed down jobs).

        I mean if the debt ridden were taken for a bath, the economy would open up to new entrances who would drive competition. But no Key crushes the opportunity for a health revamp of our economy that a good depression recession provides., f-ing national socialism for the few.

  2. tracey 2

    As for jobs… as part of my work yesterday I found myself reading Hansard on the debates and submissions on the Financial Assistance Package Bill before parliament.

    Sue Kedgely’s input is interesting because she refers people tot he 1990-ish debates when timber and the building industry were de-regulated. Several labour MPs beseech Williamson to do something for trades because in late 2010 and early 2011 he was being told there are not enough folks in trades… TWO YEARS it’s taken him, but now plumbers and mechanics cant afford to take on apprentices.

    I am particularly interested because this government is de-regulating the industry again by stealth. Taken away major liability from councils issuing consents and giving developments (read developers) a “fast tracked (read less stringent) process to get their buildings through.

    Unlike the designers and builders on those developments developers will have no personal liability, and as is the case historically developers set up a company purely for a development project, take the profit out and liquidate it, avoiding company liability.

    This govt’s cry of “open up land or else” means that govt intervention will see developers unfettered in their projects… more builders will carry the can over the next 10-15 years on the back of their personal liability, while developers use vanuatu and other tax havens for maximising income.

    IF directors of developing companies had to give a ten year personal guarantee (such as builders and designers now do) watch the standard of building improve… and for those who say they will stop building, is a badly built house full of rot and fungi better than none?

    • rosy 2.1

      Tracey, you’ve been putting forward some really good points on the building industry, developer liability and deregulation over the last couple of days.

      Maybe I’m talking out of turn here, but have you thought about putting it all together in a post about how you think things are panning out? I’m finding it very thought provoking.

  3. MikeD 3

    Great post. David Cunliffe’s speech in the house from earlier this week goes into this in quite a bit of depth. He just rips the government to shreds. We need him back on the front bench, urgently.

    • onsos 3.1

      I agree it would be great to have David Cunliffe on the front bench, but he doesn’t warrant that position now. He is a great speaker and has excellent ideas, but has not done the basic work of supporting his party. There is no reason for these roles to be in contradiction.

      • Draco T Bastard 3.1.1

        He is a great speaker and has excellent ideas, but has not done the basic work of supporting his party.

        Interesting, then, that so many in the party seem to support him.

      • Foreign Waka 3.1.2

        This approach is exactly the mind set that gets the younger ones walking – in the opposite direction. When a person has such obvious talent then by all means use it, for everybody’s benefit.

  4. Lanthanide 4

    “even after exporting 180,000 Kiwis to Australia under this government. Indeed if we added them in, the unemployment rate would double to 13.8%.”

    Nice scare-mongering, but pretty specious.

    What has been NZ’s net migration over this same period? I’d expect we’ve probably slightly grown, or only marginally shrunk. So even though 180k may have gone to Aussie, others have taken their place, and in doing-so produced the current 7.3% unemployment rate.

    • Enough is Enough 4.1

      I agree Lanth.

      If 180,000 New Zealanders were kicked out of Australia and had to come home, they wouldn’t all go on the dole.

      They would all have to buy food and clothes (creating jobs), they would all have to send their kids to schools (creating jobs), some would want to start a business (creating jobs).

      Ben, your statement of fact that the unemployment rate would double to 13.8% can not be taken seriously and detracts from your message. Scaremongering rarely works.

      • Lightly 4.1.1

        call it 11%, then?

        How are they going to afford to buy clothes and food, btw?

      • bad12 4.1.2

        When you consider the number of DPB beneficiaries who will be forced to seek work by changes to that particular benefit and the number of sickness beneficiaries who will at some stage also be required to do the same i think the post author is being slightly moderate in terms of the numbers actually seeking work…

      • Richard Down South 4.1.3

        So, how many jobs more would the warehouse create? Or Pak n Save or Countdown? I doubt because theres a say 10% increase in sales, that they will hire many new staff…

      • aerobubble 4.1.4

        I heard that kiwis in Australia are percentage wise, more in employment, since they return if they aren’t. So add in all the extra home to be built, all the skill shortages being filled, and you get what economists call growth, populations rises cause growth. Our economy would get a boost, one longer lasting than the rebuild of ChCh because essentially all that is is a return to status quo, and the insurance funds need to be built up again, thus dragging on growth. National have good reason to delay the rebuild, the hangover falling into Labour years.

    • CV - Real Labour 4.2

      What has been NZ’s net migration over this same period? I’d expect we’ve probably slightly grown, or only marginally shrunk. So even though 180k may have gone to Aussie, others have taken their place, and in doing-so produced the current 7.3% unemployment rate.

      Not sure you’re addressing the point, I thought the question was: what if 180K Kiwi workers fled Oz and came back to NZ, essentially to collect the dole (subtext: we don’t kick out the new immigrants who have come here during that period when this happens).

      • Lanthanide 4.2.1

        Many of the 180k that went to Oz would already have had jobs in NZ before they left (at least 5 people at my work went to Oz with their families in the last 4 years, that I know of). It is likely many of these people could get their old jobs back, or jobs at the same company anyway. Also see Enough’s reply at #4.1.

        • geoff 4.2.1.1

          Quarreling over the exact figures is beside the point, the fact is that unemployment would be substanially higher were it not for the Australian job market.

          • Lanthanide 4.2.1.1.1

            You cannot and should not assume that.

            • geoff 4.2.1.1.1.1

              Oh right but it’s ok for you to assume that most of those 180k would get their jobs back if they return? Like I said below, double standard.

              • Lanthanide

                I didn’t assume it, I said it was likely.

                It’s entirely possible that if those 180k people came back from Aussie (or hadn’t left) that actually the unemployment rate would be lower than it is now. You are saying it definitely would be higher, which is an assumption.

                Note the difference:
                I say it’s possible it could be lower, you are saying it would definitely be higher.

                • geoff

                  You assumed it would be likely. I assumed it would be unlikely. I can be a pedant too.

                  • Lanthanide

                    No, I am going by the words you used.

                    If you didn’t mean to say, as a “fact”, that the number would go up, then you should not have said that.

                    Don’t blame me for your poor communication skills. I read what you wrote, if you didn’t mean what you wrote, but instead meant something else, you should have written something else.

                    • geoff

                      Fair call. I realised that just after I typed that reply but the editor wouldn’t let me
                      modify the comment after I initially submitted it.

                      Clearly I used the idiom “The fact is..” to cavalierly and for that apologise unreservedly.

                      Might I highlight a concern with your comment:
                      You cannot and should not assume that

                      You should retract that statement as clearly I can and did make that assumption.

                    • Lanthanide

                      “cannot” in the sense that there is no sound logical basis to make that assumption on, rather than “cannot” in the sense that it is impossible to make such an assumption.

                      I’m not aware of any other sense of the statement “the fact is” other than claiming (what the speaker wishes to be) an undeniable fact.

                    • geoff

                      “cannot” in the sense that there is no sound logical basis to make that assumption on, rather than “cannot” in the sense that it is impossible to make such an assumption.

                      Then what did you mean by “should not” in the “You cannot and should not assume that.” sentence? Are you fond of tautology?

                      Don’t blame me for your poor communication skills.

                • tracey

                  “likely”

                  Possessing or displaying the qualities or characteristics that make something probable:

            • Galeandra 4.2.1.1.1.2

              Lala, pedantry much

  5. aerobubble 5

    Rebuilding ChCh won’t deal to the fundamental problem with the NZ economy, that its badly run by self appointed geniuses and opposing factions who talk too much. The idea that Chch will be rebuilt and this will drag builders back from Australian (when so many homes have been wrecked by fire and storms) is dumb since the cost of transition back is high and the lower wages will mean the lower hanging builders who cant get work….

    So I wish someone would stand up and stop talking bollocks. The problem with the NZ economy is its very very rich and the speculator class run rings around the nonsense singers in the media by buying up the free press and stacking them with parrots who nail the framing neo-liberal dogma of the moment.

    We cannot grow NZ by lowering standards, we cannot increase competition by raising compliance costs (national standards – it just reduces competition and teaching time). If you stick you head up and say the contrary thing to logic, to ethics, to good economics, you get a immediate call to go on NZ TV its shallow, its hollow, its so blatant, and it costs us all MORE.

    I mean how absurd, the National party demanding cheap housing is impossible in Auckland! Its only impossible because they need to keep housing prices dear, scarcity is far too profitable, their major donors unproductive lifestyles would take a major hammering.

  6. Afewknowthetruth 6

    There is no better slave than a slave who thinks he/she is free.

    Such a slave will often defend to the death the slave masters right to own and exploit slaves.

  7. Daveo 7

    Afewknowthetruth:

    Manufacturing is just making stuff. If you consume anything then it has to first be made by someone. Like, for example, the computer you’re using right now, or the stuff in the house or office you’re typing from, or the car or bus or bicycle you use to get from A to B, or the medicine the doctor gives you when you’re sick. By all means, burn the lot of it and go live in a small-scale, subsistence economy, but don’t expect the rest of us to join your great leap backwards.

    • Afewknowthetruth 7.1

      You either prepare for ‘the great leap FORWARD’, i.e. away from the present despotic, idiotic system,or you have it forced upon you. Either way, everyone will end up RETURNING TO NORMALIITY, since the energy and resources necessary to maintain the present system do not exist. Hence, the system is falling to pieces globally.

      Have you noticed that Britain and the US have both recorded negative GDP. That is after desperation efforts in both nations to promote growth. Meanwhile, Spain, Portugal and Greece etc. fall off the cliff at an ever faster pace.

      To imagine that collapse is not coming to NZ is to be an utter fool. Sure, NZ will be one of the last places to go under. But there is nothing more certain than that it is going under.

      • Polish Pride 7.1.1

        Thats because they don’t currently have a large war going on.

      • King Kong 7.1.2

        By the way, you do realise that in your end of times scenario that people like me will be wearing the heads of people like you as hats.

        • Rogue Trooper 7.1.2.1

          will you suit a beard? Fess up raconteur

        • felixviper 7.1.2.2

          Is this sociopath (King Kong) contributing to this forum in some way that I’ve missed?

          • One Tāne Huna 7.1.2.2.1

            +1

          • fatty 7.1.2.2.2

            KK provides us with right wing intellect.
            Some of us who have the ability to think laterally mistake this for trolling, but you can be sure, KK offers us the best arguments the greedy team can put up.
            Its the well tested formula of firstly avoiding facts, then arguing with ideological rhetoric…then when that fails, depoliticise the argument with an unfunny joke that references a Labour failure from the past.

        • McFlock 7.1.2.3

          And yet if you start your dream outfit too soon, all of a sudden YOU’RE the nutter… 🙂

          Personally I’ve always wanted a skull goblet, but what the hey. Pre-Apocalyptic-World Problems, and all that.

        • Draco T Bastard 7.1.2.4

          Don’t get your hopes up too high. The lone wolf vampire always get hunted and destroyed by the community in the end.

    • Draco T Bastard 7.2

      If you consume anything then it has to first be made by someone.

      Actually, the problem is that a hell of a lot of manufactured items don’t need to be made by anybody.

      the computer you’re using right now,

      Yep, I can just imagine the skilled person patiently chiseling the billions of transistors onto a CPU.

  8. Afewknowthetruth 8

    The CO2 content of the air is on track to break through 400ppm this year,

    The increase in average temperature of just 0.7oC that has resulted from the rise in CO2 content from 280ppm to 396ppm is already causing climate chaos and much loss of life, as well as massive loss in biodiversity and disruption to the food system. That rise in CO2 is largely due to manufacturing. in NZ

    The idiots who want to resurrect manufacturing (and want to persist with the global consumer society) want the CO2 content to rise faster than it is already rising and bring even greater carnage upon society than we already have.

    Fuckwits.

  9. Afewknowthetruth 9

    New Zealand’s total CO2 emissions are relatively small but NZ per capita emissions are enormous. It is only the relatively low population that permits the insanity of industrial living to go on without dire consequences.

    Clean and green. Yeah right! NZ would be one of the filthiest places on Earth if the current lifestyle were enjoyed by a population similar to that of Japan (127 million).

  10. mike 10

    Isn’t it rather obvious that when PP said ‘man’ was referring to the human race in general? Lanth your response “You don’t have to take part in the global economy.” which you’ve later qualified with “Having the means not to be part of the global economy is another question.” seems to be pedantic and pointless.

    So you’re saying that if ‘you’ are one of the small fraction of the population that has the means to escape form the global economy, then they can escape from the global economy? Thanks for that. But PP wasn’t claiming it to be a logical impossibility, he was talking generally. Generally, if you’re not in that small fraction, choosing to not take part in the global economy in the face of the myriad of societal pressures against you is a hard road that not everyone is cut out for.

    • mike 10.1

      The whole discussion that I was replying to seems to have disappeared… So this is what gas-lighting feels like..

    • Polish Pride 10.2

      yes I came on to read any updates to the same part. Would be interested to know if a mod has deleted it? anyone?

  11. ad 11

    Have the Parties who convened this inquiry committed to delivering on the findings into policy, or even in to a Coalition agreement?

    I know it’s the job of the Opposition to poke the borax and good on them for doing it successfully.

    But the convenors are the apparent next government. So what are the going to do? At very least they could commit to forming a united front against the gvoernemnt and writing common policy and, dare I say it, common strategy for leading the country beyond 2014.

    If they can’t do that them all this amounts to is a glorious stunt. And they need to have their position colelctively ready by the end of the inquiry, because that’s precisely the first line the media will ask: so what are you all going to do instead?

  12. Te Reo Putake 12

    Brighter Future Update:

    Joint media release: EPMU & FIRST Union
    Thursday January 31, 2013

    Summit Wool Spinners to close at cost of 192 jobs

    Summit Wool Spinners has this afternoon informed staff it will close its Oamaru plant, citing the high exchange rate as a contributing factor.

    The closure will affect all 192 workers at the site including management.

    Summit Wool Spinners has sold the plant to Godfrey Hirst subsidiary Canterbury Spinners Limited, which operates plants in Lower Hutt and Dannevirke.

    A closure date had not been finalised but it will be some time around the end of February.

    Members of the EPMU and FIRST Union were told of the decision at a site meeting at 3.30pm this afternoon. The workers will receive redundancy compensation through their union collective agreements.

    EPMU organiser John Gardner said that like many other manufacturing firms, Summit had been hit hard by the high New Zealand dollar.

    “Summit is the second largest employer in Oamaru and has been a part of the town for 130 years. These redundancies are devastating for staff and for the whole community of Oamaru which relies so heavily on these jobs.

    “Summit has been a very good employer and didn’t want to make these redundancies, but the government’s refusal to act on the overvalued exchange rate or provide any kind of strategy for manufacturing means they were left with few options.”

    Paul Watson, FIRST Union Textiles Secretary, said the textile industry was facing difficult times, and Summit’s announcement followed the closure of a Norman Ellison Carpets factory in Onehunga last year with 80 job losses.

    “This must serve as an urgent wakeup call for the government to be more proactive in its support for manufacturing. Manufacturers have been completely let down and workers have paid the price for this inaction through job losses.”

    The announcement comes as hearings got underway this week in a Parliament Inquiry into Manufacturing. Manufacturing is New Zealand’s third largest employing industry and has lost 40,000 jobs in the last four years.

    ENDS

    • Tiger Mountain 12.1

      Bad shit TRP, the real world results of this dirty filthy tory government.

      Do they really want to keep operating a nation state? makes one seriously wonder. F&P buggered off to Mexico and Thailand with hundreds sacked in Dunedin. At least the Thailand end is getting organised via the EPMU and FIRST Union efforts.

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