Friday, August 20, 2004

The opportunity in the "labour shortage"

Catriona MacLennan points out the great contradiction in New Zealand society at the moment: we have 80,000 unemployed ekeing out their lives on inadequete benefits. Worse, we have an "underclass" of people who don't have jobs - who have never had jobs - and who are forced into petty crime to sustain themselves. At the same time, we have a "labour shortage", and employers are beginning to import workers from overseas. The solution is obvious:

Let's think hard before we consider doing that. Now is the perfect time, instead, to make a concerted, nationwide effort to get all the unemployed and underemployed people already living in New Zealand into work.

I agree fully with this sentiment - it is ridiculous to talk of a "labour shortage" when 4% of the workforce is unemployed and actively seeking a job. In the 80's we thought that that level of unemployment was an atrocity. Nowdays, though, the business community is willing to write off those 80,000 people as the "crud at the bottom of the barrel".

What policies can we pursue to ensure that the "labour shortage" turns into tangible benefits for the worst-off in our society? The obvious one is to make it easier for people to move from the benefit into work. This means reducing the harsh clawback regime which prevents the unemployed from building their CVs through part-time work, providing grants and assistance to those wishing to relocate to areas where there are jobs, and eliminating the standdown period which makes taking a job an unacceptable economic risk. Labour has made some progress in this direction, but not enough, and they have focused on punitive measures (such as their infamous "no-go" zones) rather than positive assistance. As for the people MacLennan writes about - people pursuing a life of petty crime because they have no other alternative - the answer is to give them those alternatives. At the moment the probation service simply ignores its charges; they should be actively working to find them meaningful employment, and to ensure they stay in it, not abandoning them to live on the streets.

And of course the Immigration Service should take a dim view of companies trying to import workers wholesale or gain exemptions to allow them to hire backpacker labour in areas where there is high unemployment. We supposedly live in a free-market system. Well, the solution of the free-market to a labour shortage is for employers to either offer higher wages, or to lower their standards and commit to training. If they are unwilling to do that, and in consequence cannot find the workers they need, then they have no-one to blame but themselves.