LIBRO II CAPITULO PRIMERO
CAPÍTULO X
The rapid increase in registered unemployment 1 from 1976 caused concern among ordinary New Zealanders. Opinion polls, newspaper and broadcasting surveys and political party opinion polls indicated that unemployment was the number one concern of New Zealanders
(New Zealand Herald,
October 30, 1979). The ranking of unemployment as the major issue showed that full employment had become accepted as, "a fundamental national value . . . cherished i n New Zealand" (National Research Advisory Council, 1 98 1 : 61).1 New Zealand did not begin to use the Household Labour Force SUIVey in use in many OEeD countries since the 1970s until 1985 (OEeD, Economic SUIVey, 1986/87). Thus during the period covered by this chapter, it was registered unemployment figures that were used as indicators of levels of unemployment.
To be registered as unemployed a person had to go to the local office of the Department of
Labour and show himself or herself as willing to work and unable to find a job (Department of Statistics, 1 971). Even though registered unemployed figures provide some indication of the extent of unemployment, they do not give the full picture for a number of reasons. Registration is voluntary and people register if they want to use the Department of Labour's placement seIVice and/or are entitled to claim the unemployment benefit. Some people, such as those with employed spouses who are generally not eligible for unemployment benefit, and those who do not feel that the Department of Labour will help them find work,
will not register and will not be counted as unemployed (ReSp, Vol. II, 1 988). A more
accurate measure of unemployment was that based on the 5 yearly census data, but it was collected too infrequently to give an accurate impression of unemployment trends.
Sir Robert Muldoon, then Prime Minister at the time remarked, lI(the fact) that throughout all of this time unemployment in New Zealand was at lower rate than in most other countries of our type meant nothing to New Zealanders. As far as they were concerned it was higher than at any time since the depression of the 1930s and they did not like it" (Muldoon, 1985: 1 16). After the experience of the depression of the 1930s and the first Labour Government's success in achieving full employment, there had developed a belief in the right of individuals to paid work.
By 1978 registered unemployment in numerical terms rose to the highest level it had been since the great depression of the 1930s (Scott, 1978). In February 1978 registered unemployment was 18,654. In addition 9,347 people were employed in the public sector under the Temporary Employment Programme and 1 ,631 in subsidised private sector employment
(Labour a nd
Employment Gazette,
1978).During phase one the government was striving to maintain full employment, despite the encroaching international recession
(Labour and Employment
Gazette,
1978). The National Government's position was summed up by the Minister of State Services, Mr D. Thomson when he said, lithe Government will continue to fulfil its responsibilities to the commitment it has to the objective of full employment" (NZPD, 1979: 2013). The level of registered unemployment was thus kept down by the extensive use of job creation schemes. As a form of assistance to the unemployed, work on schemes was preferred to the payment of unemployment benefits (ReSp, Vol. III, 1 988). This reflected what was by now a long tradition in New Zealand of prioritising public works as a response to unemployment.However, public and government concern over rising unemployment was not shared by some employers. On the contrary, rising unemployment was welcomed by some employers; for example, Mr J. G. Russell told the
Evening
Post
that, "more unemployment was highly desirable to diScipline the labourforce II (December 4, 1978). The New Zealand Manufacturers' Federation
welcomed the rise in registered unemployment saying that, "unemployment would be good for people, and that if jobs were harder to secure the absence rate in New Zealand industry might fall as a result" (Robertson, 1976: 4). Unemployment was seen as a useful weapon to diScipline trade unions, to keep wages rates down and to secure increased efficiency and productivity from the work force
(Evening Post,
September 17 1980). As theEve n i ng
Post,
editorial remarked, it was time that workers' demands were 'nipped in the bud' (December 4, 1975). The long period of full employment had put workers in a strong bargaining position, where they could command relatively good wages and working conditions.Since the phasing out of job creation schemes in early 1940, there had been no notable programmes of job creation until 1976. In the late 1960s and early 1970s there were some small scale job creation schemes, but the numbers involved were very small (McGurk, 1989). As unemployment continued to rise, the Government Special Work Scheme was phased out and in its place the National Government launched the Temporary Employment Programme. The name of the scheme was indicative of government's view of unemployment as a temporary phenomenon. The government's perception had appeared to have validity at the time given the fact that 51 percent of the unemployed in February 1978 had been on the register for less than a month indicating that there was still a substantial turnover of workers as jobs were found. However, this percentage had declined from over 60 percent in 1977 as total unemployment rose (AJHR, 1978 G. 1). 2
Since unemployment was believed to be temporary, no new policy initiatives were put in place. The principal goal of the Temporary Employment Programme, according to the Minister of Labour, Jim Bolger, was: "to provide short-term employment for job seekers who cannot be placed in regular employment or under one of the private sector job-creation programmes"
(New Zealand Listener,
September 16, 1978: 24). Public sector job creation schemes were considered as a source of unemployment relief of the last resort. According to the Minister of Labour, Jim Bolger: "The Government believes it is essential to have New Zealanders off the State pay roll and working in productive employment, adding to the economic growth and worth of the country" (NZPD, 1979: 34 1). The Minister's statement reflected the long standing belief that the most acceptable form of employment was in the private sector. However, despite the Minister's ambivalence over job creation schemes, rising unemployment and declining employment opportunities in the private sector, job creation schemes remained the only means the government had to contain unemployment.2 For duration, gender and age classification of the unemployed, see the Annual Report of the
The organisation and co-ordination of job creation schemes was undertaken by the Department of Labour whose mission goal was stated as to promote and maintain full employment (NZOYB, 1981). Until 1977, the Department of Labour had largely acted as an information broker to buyers and sellers of labour (Dwyer, 1984). Now, however, the Department of Labour had to initiate job creation schemes in both the public and private sectors3.
The significance of job creation schemes was clearly evident from the very beginning. In the government financial year 1977/78 job creation schemes accounted for 49 percent of all placements of registered unemployed persons in employment by the Department of Labour. By March 1979 job seekers on partly or fully subsidised employment schemes: "accounted for 52 percent of all persons either registered as unemployed or on government special work schemes" (ReSp, Vol. II, 1988: 548). Between 1978 and 1984 the number of jobs on job creation schemes as a proportion of the total number of jobs in the labour force rose from five percent in 1978 to more than eight percent in 1984 (Monthly Employment Operations, 1984).
The Temporary Employment Programme was also promoted as offering opportunities for some of the unemployed, lito acquire the work experience they needed to become more competitive in the job market" (A]HR, 1 979 G. l : 18). This assertion signalled the beginning of the National Government's moves to distance itself from the problem of unemployment by viewing it as a result not of a lack of job opportunities but of a lack of appropriate and relevant skills and work experience of the unemployed.
The range of job creation and training schemes (see Appendix ' III and IV) indicates that the government view of unemployment at the time was that adult workers were unemployed due primarily to deficiencies in demand, while young people's unemployment was presented as a consequence of lack of work experience and/or skills. All workers given employment under the above schemes were paid wages that were comparable to those received by workers in permanent employment. The only exceptions were schemes that were targeted at the young people (those under twenty years of age) whose wages were not linked to union award rates. Two of the four private sector wage subsidy schemes were targeted at young people. The Department of Labour reimbursed participating firms in each case a certain percentage of 3 For the number and variety of job creation and training schemes introduced by the
approved wages for giving employment to young unemployed workers referred by the department.
These schemes were also different from those targeted at the adult population in that their emphasis was on training rather than provision of employment. The primary goal of the schemes was to provide individual participants not only with temporary income support but also, ostensibly, the opportunity to acquire skills and work experience. The targeting of some schemes at young people was intended to correct the distributional problem of unemployment in which the young people made up a high proportion of the unemployed (Kirk, 1984). Arguably the central role of training schemes for the young (which were modelled on the Manpower Services Commission schemes in Britain) was to socialise the young to regard themselves as deficient in skills and to live on an allowance. The bulk of training given to the young was mostly in areas of 'confidence building', such as how to dress for job interviews, and how to present oneself (Korndorffer, 1987). Thus the focus was on attempts to correct the perceived individual limitations instead of providing the young with training which could have enabled them to get jobs at the end of their training.
Offering wage subsidies to private sector employers was to encourage them, lito provide additional permanent job opportunities II (Dwyer, 1 983: 8).
Private sector temporary employment schemes were preferable to the public sector schemes not only because all governments regarded the private sector as the legitimate source of employment, but also because the cost in tenns of wages was not totally borne by the state as was the case with public sector schemes. Table 24 gives a summary of numbers of people provided employment under job creation schemes between 1978 and 1980.
TABLE 24: COMPARATIVE FIGURES OF PERSONS ASSISTED WITII EMPLOYMENT AND TRAINING UNDER TIlE TEMPORARY EMPLOYMENT
PROGRAMME AND PRIVATE SECTOR SCHEMES BETWEEN AND
Name of Scheme No. of persons No. of persons No. of persons provided with provided with proYidcd wiah employment employment employment
during}'Clr ending during)'CU ending during}'Clt" ending
31 March 1978 31 March 1979 31 Man:h 1980
Temporary Employment Programme 40,743 1 6,463 38,681
Farm Employment 7.868 3,940 3,536
Additional Jobs 4,869 3,522 4,844
First Job 1 ,655 1 , 1 5 1 -
Skill Promotion 1 ,309 1 ,032 -
Total 56,444 26, 1 08 46,061