There doesnt need to be an incentive for people to work. Most people are not aware of how macro economics works - its not tought in NZ schools - but as an example:Originally Posted by Clockwork
Currently the government is saying that the unemployment rate is 3.6% the lowest in 40 years. However, we know that 'unemployment' only includes people drawing the unlemployment benefit. It does not include people on stand down (5 week period), students, DPB, sickness, or any other form of benefit - if you added all that up, the real rate would be nearly 40% of the population.
Focusing only on unemployment, its generally considered in current theory that a rate of about 4-5% of the population is ideal as a social policy. The reason is not because there are bludgers out there, but to provide the support mechanisms for people who are transitioning between jobs, casual workers, students looking for jobs, people who are in unfortunate circumstances etc.
With a population of 4.5 million, you would always expect some percentage to be in one of these states - so the government usually budgets for it. If the rate trends either side then its an indicator of an economic problem such as a recession or economic slowdown, or a policy problem, such as preventing apprentiships and other training mechanisms forcing the loss of skilled labour.
So going back to the current rate of 3.6 percent we realise that this number means that the majority of people (and i'm talking about 99%) actually are in one of the situations I listed above - rather than bludgers - so trying re-work the dole scheme is probably not a good idea.
On top of this, there is a skills shortage across the board, mostly caused by the high tax rate and social burden put on people thats driven most of the skilled labour overseas leaving only unskilled labour behind - skilled labour is able to fill jobs easier than unskilled, hence its so important. Since labour prevent high tech and corporate business from occuring in NZ, its unlikely that the skilled labour shortage will end in the near or medium term. Also note that skilled labour refers to jobs that require some form of training to perform - not just computer jobs, but fruit picking, machining, assembly etc.
This is compounded because NZ has incredibly short shop opening hours, and a policy against temp workers and other causual labour. What this means is that with shops shut, the number of jobs available is reduced, these are the types of jobs that would normally be filled by temp workers (solo parents while the kids are at school, students etc).
Finally, the current mechanism for the unemployment benefit prevents people from working, even if the job is marginal pay (about the same as what they get on the benefit). This is because when you work, you lose your benefit for a period of time once your job has finished - called standdown. This means that you have to earn enought to support your self now, and also for when you will have no income at all. Because marginal jobs dont pay this kind of money, many people are forced to stay at home, when they could be out doing one of the many temp jobs I listed above.
It doesnt help much having the rate down at 3.6% because it highlights the skills shortage and you get reactionary government policy, such as return to work schemes currently being considered by national and labour. What these end up doing is force people into unsuitable employment which in the long term damage the individual in both mental, health and skillset areas (making an individual work in one area can often mean they are unemployable in others because of the damage it does to the long term skill set - for example, making a computer engineer work on a farm would make them unemployable as a computer engineer because their skill set would be seen as redundant).
Personally with the rate down so low, I would say that now is the time to leave well enough alone, and start working on training schemes such as task force green and other skills building mechanisms.
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