Urgent action needed on job creation

Written By: - Date published: 9:29 am, November 17th, 2009 - 9 comments
Categories: employment, labour, national/act government, unemployment - Tags:

We’ve talked a lot about the negative effects of unemployment on the unemployed and their communities (depression, crime, family breakup, poor health, poor educational outcomes for children etc) but there’s another group that benefits from fewer people being on benefits – people with jobs.

Check out the graph. At the end of the 1990s, there was one person on the unemployment benefit for every 12 people with a job. Labour’s full employment policies improved that ratio to the point where last year there were 94 people working for each person getting the dole. That freed up a hell of a lot of tax money for things like health, education, Kiwisaver, and the Cullen Fund.

workers per dole
MSD and Stats
Over the last year, the ratio has worsened dramatically. Now, every 35 workers is paying for one person on the dole. Carrying that extra burden means we have to borrow more and increases the likelihood of savage cuts to public services by National.

Some will say that we should cut benefits. That’s obviously stupid. Apart from the issue of how you expect destitute people to survive without resorting to crime, the fact that just a year ago only 1% of the workforce was getting the dole proves that this isn’t an issue of bludgers choosing to be on the dole. These people want to work. The solution to the problem is to get them jobs.

National’s performance on employment has been a spectacular case of over-promise/under-deliver. The jobs summit was a complete failure – its flagship idea, the cycleway, is now a national laughingstock that hasn’t delivered the 3700 jobs promised. ReStart was a sick joke. No-one, business or union, wanted the 9-day fortnight. And the jobs supposedly created by the youth jobs package are actually jobs that would have come into existence anyway, with employers favouring young employees to get the government subsidies. Not that it has helped – youth unemployment is now over 25%.

Sadly, I can’t see it changing any time soon. Our Social Development minister seems to think her job is to appear on magazine and newspaper covers looking clueless and out of her depth, while her boss is too busy getting to the next photo op to check up on her.

9 comments on “Urgent action needed on job creation”

  1. fizzleplug 1

    Do you have any figures for people in employment per people on a benefit? Apples with apples and all that.

    No idea what the trend is, would be interested to see though.

    • Jeremy 1.1

      yes, if you hadn’t noticed that’s what the whole article is about.

      • fizzleplug 1.1.1

        the dole is not the only benefit the last time I looked. A lot of people moved from the dole to other benefits in the first half of the decade from memory. My original question is still valid, your flippant answer misses the point.

  2. prism 2

    And when it comes to reducing the dole, I believe that it has never been properly assessed for actual requirement anyway, more based on some rule of thumb that is used now as a historical base. Cutting benefits would save on the welfare budget in one area but likely there would be a rise in others such as health, crime, mental health problems.

    Help is given for accommodation costs (no doubt that has provided stability to the rising trend in house for rental prices) but this would be lessened $ for each $ of gross earnings ie the accommodation help went down by a whole $ for each 80c earned (if 20% tax).

    Welfare doesn’t provide enough already for parents with teenage children. Their age means they big eaters, highly influenced by fashion trends and peers and costly to clothe, also there are school costs and a need for spending money, and if they work needing support, (I’ve delivered newspapers for my sick children) transport, watchful care that they get their homework done, help with homework and so on.

    The business of taxing simply with one rate, then giving some back as in for working families rebates should be looked at, it has perception factors that make it unsatisfactory compared to the more complex but direct tax tables lessening PAYE with each child. Some people think that the working for families rebate is a welfare handout not the fact that it recognises the big costs parents bear – its rather like the practical tax allowance housing investors have when they get depreciation allowance.

    • TightyRighty 2.1

      So my tax dollars need to pay for fashion items and spending money for teenagers? you dick. I worked from as soon as i was fifteen to pay for things i wanted. i had to give up sprot and leisure time on the weekends to juggle work and school. which i did very well at. people like you make me sick with you culture of entitlement. welfare should be for nothing more than essentials for those who are the ABSOLUTE BOTTOM of the pile. not for fucking ipods and the latest line from supre / billabong. you are an asshole and one of the reasons this country will never catch up to australia. proper hard workers, who may happen to be single or a couple without children, should subsidise your fucking lazy off-spring for fashion items and spending money? no wonder everyone tips off overseas as soon as possible. twat.

      • lprent 2.1.1

        TR: Don’t be a dickhead. I did all of those things as well. Doing nightshift whilst at school etc.

        But you’re just self-stimulating in public about the particular section of prism’s comment you blew up on. Use your brains to think with rather than your testes.

        What prism was pointing out is that there are different costs for different aged kids. The dole doesn’t recognize that, you get paid the same regardless.

        Now you could have some reason for your reflexive vertical movement if you were talking about long-term unemployed (but even there I’d suggest you were wrong). However when you’ve had the official registered unemployment rate move from ~1% to ~6% in a year. There are a *lot* of people on the dole at present because the economy changed – ie through no real fault of their own. Hell I nearly had to use it for the first time this year. A contract got an abrupt termination, and another one was hard to find. But this is why I pay taxes…

        Anyway, imagine that both parents have recently become unemployed – I know a few couples like that. One set of couple have 2 6 to 10 year olds. The other couple have 2 11-15 year olds.

        The cost difference between the two families is immense. The dole is blunt instrument because it will pay the same regardless.

        Why is your reflexive bigotry more powerful than your brain?

        • TightyRighty

          Lprent, whatever. of course there are different costs associated with different kids. however that makes no difference as there are all sorts of different cost associated with all sorts of people. the dole is neccesarily blunt, as, get this, it is a safety net, not a lifestyle enabler which seems to be the common belief by the left. it is a benefit, not an entitlement. though of course i’m wrong here, oh i forgot that, thats why you pay taxes, so you can get something out of it. I wouldn’t bother to look after myself, despite the fact i have subsidised prism’s kids lifestyle, as the state will provide. in fact lets abandon all notion of personal responsibility for our circumstances, because most of us have paid our taxes. twat.

  3. vidiot 3


    I guess the new immigration rules will address some of Martys wishes.

    NEW POLICY Investment capital: $500,000.
    Job-creation requirement: Minimum three fulltimers.
    Length of time to residency: Conditional as soon as requirements met

  4. Jenny 4

    Hi Marty,

    You write that, “No-one, business or union, wanted the 9-day fortnight”

    Forgive me if I am wrong, but I thought the 9-day fortnight was raised at the job summit by the unions, and in particular was championed by Andrew Little of the Engineering Printing and Manufacturing Trade Union, (EPMU), And if not, one of the union movement’s preconditions for attendance at this conference, was pretty close to it.

    Marty, if you have heard that unions are now distancing themselves from this policy I think we need to know.

    Can you back up your assertion with some facts?

    From what I have read about this in the media (which is admit-ably very slight), but more importantly have learned in conversations with delegates at workplaces that have gone to the 9-day fortnight, the workers loved it.

    In the case of employers however the experience is different. And in two workplaces, at least, where it has been implemented, employers have petitioned the government to release them from it early.

    Delegates have told me that their employers detest it. The main moan being the drop in productivity caused by paying workers to do less.

    Recently the New Scientist magazine stated that the 5 day week came out of the great depression, which they maintain was caused in part by the huge increases in productivity, due to the automobile, electrification, and the assembly line, over the 1920’s.

    Which hadn’t been matched by shorter hours or increased wages.

    The recent last two decades, have also seen massive increases in productivity due to new technology, (automated production, computerisation, more sophisticated hydraulic and pneumatic machinery.) coupled with frozen (and even declining) wages, and longer hours.

    It seems to me that the only rational alternative to mass unemployment, is a shorter working week without loss of pay.

    In fact I think the 9 day fortnight doesn’t go far enough, I think the work week needs to shortened even more, to free up enough jobs for the growing army of youth unemployed who should be given a chance.

    Commonly called job sharing, employers are bitterly opposed to this idea unless they can use it impose wage cuts, because maintaining jobs, without cutting pay (which is what the 9 day fortnight does), is ultimately at the expense of profit taking.

    I think we need to lift our blinkers. Just because the 9 day fortnight came out of a National Government initiative, does not automatically make it bad.

    In the face of growing layoffs the Labour opposition should be demanding to expand the 9 day fortnight to more workplaces particularly smaller workplaces that are currently excluded.

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