The Dim-Post

September 19, 2012

Making it worse

Filed under: economics,Politics — danylmc @ 9:02 am

Via the Herald:

The Government’s latest welfare reforms will help get people out of the “trap” of benefit dependency, Social Development Minister Paula Bennett says.

The second bill in the Government’s two-stage welfare reforms, signed off by Cabinet yesterday, will reduce the number of benefit categories, make benefits more work-focused, introduce expectations for partners of beneficiaries and make beneficiaries prepare for work.

Most of the bill’s changes were previously flagged but an unexpected move is the cancellation of benefits for anyone who turns down an offer of “suitable employment” – with a 13 week stand-down period before they could apply again.

One of the reasons we have unemployment benefits instead of something like military conscription for the unemployed or ‘work-for-the-dole’ is that it’s a good way for marginal workers to be selective as they transition between jobs so they can ‘move up the value chain’.

The theory goes that someone with no skills enters the work-force at, say, a retail store. The store closes down (creative destruction!) and they go on the dole until they find a similar position at a similar store, and so build skills and experience and gradually become a more productive, better paid worker.

That’s less likely to happen if marginal workers are compelled from one low-value job to another. If an unemployed retail worker transitions into a cleaning job, then a super-market job, then a dish-washing job, then an aide at a nursing home, and so-on, all placed there by WINZ because they’ll cut their benefits if they don’t accept those positions, you’re making it hard for people starting out in the work-force to increase their productivity. And one of the HUGE problems with the New Zealand economy is the relatively low productivity of our workforce.

I pointed this out on twitter yesterday, and people argued that having a job doesn’t make it harder to search for a new one. And that’s true if you have a job where you can sit at your desk and search for work online while you drink your coffee, then email out applications and schedule interviews with prospective employers at a convenient time, or over Skype or whatever – but not so much if you’re, say, a waitress with set break periods, and applying for a new job means traveling across town and queuing for several hours while you wait your turn for an interview.

71 Comments »

  1. having a job doesn’t make it harder to search for a new one. And that’s true if you have a job where you can sit at your desk and search for work online while you drink your coffee, then email out applications and schedule interviews with prospective employers at a convenient time, or over Skype or whatever – but not so much if you’re, say, a waitress with set break periods, and applying for a new job means traveling across town and queuing for several hours while you wait your turn for an interview.

    Dammit Danyl stop it with the practicalities. Don’t you know it’s the THEORY that matters?

    Comment by TerryB — September 19, 2012 @ 9:13 am

  2. there’s also a long-standing argument that people can be compelled into work that leaves them with less income than a benefit. the establishment costs of employment (getting suitable duds, shoes etc) is also a factor.

    so, the argument goes, pushing people into work can actively hinder their ability to become self-sufficient.

    Comment by che tibby — September 19, 2012 @ 9:15 am

  3. People plan, people save, people budget and people borrow succesfully around all sorts of things like cars, cellphone bill, houses, rent bonds. Doing it around a uniform for a job is not much different. So yes such a thing could be an active hinderance for some people, if that’s what they want to actively focus on.

    Comment by insider — September 19, 2012 @ 9:29 am

  4. I’m not quite clear how cutting someone’s benefit if they don’t enrol their child in ECE or if they turn down a job opportunity helps them. How does going from having fuck all money to having no money improve their lot?

    Comment by David C — September 19, 2012 @ 9:31 am

  5. “I pointed this out on twitter yesterday, and people argued that having a job doesn’t make it harder to search for a new one”

    At least when I replied, I merely said that if the expected benefit of going around applying was higher than the cost of putting in an application people would do it – that puts a “cap” on the loss involved here. There was definitely no suggestion that it was costless.

    There is no need to make an argument about it “reducing labour productivity” or have “higher output” without it – firstly because such an impact is unlikely, but secondly because the real issue is that it’s heavily unfair.

    These new regulations reduce equality of opportunity, treat people who are out of work like second class citizens, and show that when the going gets tough National (and through some of its comments Labour) are willing to throw the most vulnerable people in NZ under a bus. The thing that concerns me is how many people I’ve heard come out complaining about “their taxes” giving people a minimum standard of living:/

    Labour laws aren’t going to magically lift output in New Zealand and remove any trade-off – and as a result, using that sort of argument isn’t compelling. The real argument is that the trade-off we’re moving towards is unfair and reinforces existing inequalities (eg as you say, it is costly to apply for appropriate work or train because the rug is being pulled out from people’s feet – so this reduces equality of opportunity).

    Comment by Matt Nolan — September 19, 2012 @ 9:38 am

  6. “pointed this out on twitter yesterday, and people argued that having a job doesn’t make it harder to search for a new one. And that’s true if you have a job where you can sit at your desk and search for work online while you drink your coffee, then email out applications and schedule interviews with prospective employers at a convenient time, or over Skype or whatever – but not so much if you’re, say, a waitress with set break periods, and applying for a new job means traveling across town and queuing for several hours while you wait your turn for an interview.”

    And don’t forget, there’s a risk when going for a new job that you might be fired within the first 90 days for no justifiable reason. That kind of environment takes some fluidity out of the labour market, especially in non-professional roles.

    Comment by Pete Sime — September 19, 2012 @ 9:41 am

  7. True, but not much we can do to increase productivity levels until we decrease employment. Then the parties can all regroup and come up with policy that will increase productivity.

    Comment by Dan — September 19, 2012 @ 10:12 am

  8. I mean, decrease unemployment

    Comment by Dan — September 19, 2012 @ 10:13 am

  9. “suitable employment” – Believe me, Winz thinks suitable employment for someone with a degree & postgrad qualification includes flipping burgers, caregiving and cleaning. I’ve also come across a surprisingly large number of parents who are financially supporting their unemployed teens who aren’t on the dole. Nice, middle class parents who can’t bear the shame and indignity of one of their own being one of the Not-People. The Ugly Society – what Nact promises us if we don’t let them sell assets.

    Comment by Scintilla — September 19, 2012 @ 10:17 am

  10. And what’s not suitable about those positions?

    Scintilla
    People have to take what they can get, what is out there. Exceptions to obtaining employment shouldn’t be your amount of qualifications! Only normal things such as health problems in certain industries (allergic to sawdust, for example) should disqualify you from a job.

    Comment by Dan — September 19, 2012 @ 10:34 am

  11. People have to take what they can get, what is out there. Exceptions to obtaining employment shouldn’t be your amount of qualifications! Only normal things such as health problems in certain industries (allergic to sawdust, for example) should disqualify you from a job.

    Actually, if you read what Danyl wrote at the top, having highly qualified workers in menial jobs that don’t afford them the opportunity to readily seek skilled employment is actually more of a problem in the long run than paying them $220/week or whatever the UB is these days. It is a serious waste of productivity to have a skilled worker flipping burgers instead of looking for appropriate work.

    Comment by Vanilla Eis — September 19, 2012 @ 11:00 am

  12. Believe me, Winz thinks suitable employment for someone with a degree & postgrad qualification includes flipping burgers, caregiving and cleaning.

    So?
    Those jobs (along with supermarkets, most of the retail sector, and so on) tend to be short-stay employment for students and the recently-qualified.
    If you’re an employer, applicants that have experience working in teams and exposure to dealing with difficult clients/customers already, are much more attractive that the ‘green’ applicants.

    Comment by Phil — September 19, 2012 @ 11:02 am

  13. @ Dan

    One of the problems is that for scintilla (and me and others here no doubt) is that flipping burgers is not a suitable career path. Even if you would be considered, I think it is slightly unethical and misleading to an employer to take such a role knowing you will drop it in a month for the role you are really hanging out for. It’s lose-lose-lose : you lose because it’s a bad thing to do, they lose because of productivity issues, and a possible ‘real’ employee loses an opportunity. Yep if I had no options, and my career was effectively over, then I’d consider it, but not while there are realistic options.

    Comment by insider — September 19, 2012 @ 11:08 am

  14. “People have to take what they can get, what is out there. Exceptions to obtaining employment shouldn’t be your amount of qualifications! Only normal things such as health problems in certain industries (allergic to sawdust, for example) should disqualify you from a job.”

    theres also the other aspect of someone who isnt highly qualified not getting a position they could do, because its staffed by someone over qualified – then add in the training and rehire costs when the overqualified person jumps ship the split second they get a job offer better aligned with their skills

    So it can lock those way down the skills ladder out of work even futher, and can add more costs to an employer and potentially WINZ.

    Or winz could just stick them in a course where you are presented with coloured cards, felt pens and ordered to make collage posters from magazines showing your goals and the barriers that are stopping you (which is what they did to me after doing a post grad multimedia qualification, during the holiday period when the whole industry goes on holiday – there was also a woman in the same lot of compulsory attendees who had a masters in accounting, but not very good english – go figure)

    Comment by framu — September 19, 2012 @ 11:17 am

  15. Bennett went and spent a long sabbatical in the USA last year. She is preparing welfare to be fully privatised, with taxpayer money providing fat profits to the (no longer OIA accountable).business be able to “mmanage” the unemployed for profit.

    Comment by Sanctuary — September 19, 2012 @ 11:38 am

  16. There’s also the argument that fear of unemployment compels employees to stay in jobs they’re ill suited to, reducing labour mobility and thus productivity. People respond to incentives, and the disincentive to risk employment is high, in the form of poverty – $220/wk plus whatever you can beg from your case manager. Add in a side of ritual humiliation, as above, and it’s not much of a choice. Employers with hearts and consciences wait until it is absolutely necessary to lay off staff for fear of inflicting harsh consequences on their employees, further compounding the immobility of labour.

    I’m on a third world internet connection right now (literally) and can’t be bothered to pull up an academic literature. No doubt some ambitious right wing economist can point to a curve on a graph and tell me that these realities do not exist, at least not in any such way as would affect their theory.

    Comment by George D — September 19, 2012 @ 11:41 am

  17. The other effect of these policies is to lower the cost of labour, which results in short term profits for business (yay!) but is absolutely terrible for the economy, because it lowers the cost of labour relative to improvements such as machinery, process improvement, and training. Which is terrible for New Zealand in the medium and long term. (The fact that we have had Treasury-led policies which for 25 years have artificially inflated the cost of business capital has of course made things worse again).


    Or winz could just stick them in a course where you are presented with coloured cards, felt pens and ordered to make collage posters from magazines showing your goals and the barriers that are stopping you (which is what they did to me after doing a post grad multimedia qualification, during the holiday period when the whole industry goes on holiday – there was also a woman in the same lot of compulsory attendees who had a masters in accounting, but not very good english – go figure)

    The option for many is to consider Australia, where there is no entitlement to benefits, but there is a perceived higher opportunity to work in a field which uses your skills (this is true in many, untrue in some) and pays significantly higher in real terms.

    Serious question: I wonder what the state of discontentment would be if Australia wasn’t an option? We have 1% of the population moving annually, and surely around 5-10x that number seriously considering it.

    Comment by George D — September 19, 2012 @ 11:49 am

  18. It is a serious waste of productivity to have a skilled worker flipping burgers instead of looking for appropriate work.

    While I agree with the sentiment, this comment does infer that merely by virtue of earning a degree a worker is “skilled”.
    This in my experience is not the case.

    One of the principal issues that I see is our nation’s obsession with an expensive education as a minimum entry criteria to the most mundane white-collar jobs.
    Over-education is wasteful and a rort. Outside of degree level vocational qualification – law, medicine etc.- it provides only limited indicators of a person’s capability.
    It also has the unfortunate side effect of setting what are essentially unrealistic expectations of earning potential for new grads.

    Comment by Gregor W — September 19, 2012 @ 12:08 pm

  19. hi george – thankfully that was a few years back and im now doing pretty well (comapratively) thankfully

    Aussie is an option – but my current employer is one of the good ones so for the mo im staying🙂 (plus im one of those oddballs who quite likes a lot of what NZ has to offer)

    the bit that got me was there was definately kids in that course who needed it – but it was pretty clear WINZ was just ticking the boxes by sending me there – and thats one of the big problems – it was just a way to make the figures look better.

    If bennet really wanted to remove welfare traps there is 3 obvious things she could do
    1) stop charging secondary tax on top up earnings
    2) reduce the abatement rates so there a blatantly visible financial incentive to getting of welfare (to the person involved)
    3) allow beneficiaries to keep money without getting a benefit suspension in return (eg: seasonal workers acutally get to keep the profits of their labour once the work has stopped)

    If were all meant to be rational economic actors (according to free market theory) – is anyone surprised when when the rational course of action is “bugger that – i will be worse off!” ?

    Comment by framu — September 19, 2012 @ 12:10 pm

  20. There is no doubt however that a person who is proving that they can hold down a job is vastly more attractive to a potential employer than someone who cannot point to the discipline and focus required to turn up every day on time and perform to the satisfaction of an employer. Turning down “unattractive” jobs doesn’t help put you first in line when the “attractive” job comes up.

    Comment by davidw — September 19, 2012 @ 12:38 pm

  21. Of course only some people on welfare are “trapped” there.

    For many, it is just a temporary stop-gap measure between jobs or until their kids start school or they recover from their divorce or surgery. Notice how benefit levels fall – all by themselves – when the economy starts to grow.

    The problem is that WINZ will no doubt be given targets for welfare removal/untrapment.To meet those targets they will almost certainly
    pick on the “clients” with work history and qualifications – because they are easy to find work for – not the people who
    ae genuienly “trapped”.

    Comment by MeToo — September 19, 2012 @ 12:44 pm

  22. Turning down “unattractive” jobs doesn’t help put you first in line when the “attractive” job comes up.

    Actually, in my field, flipping burgers or working in forestry doesn’t seem to help your CV. It might be different in yours.

    Not that there isn’t honour in manual work – I’ve done plenty of it in my lifetime, as have my family. It deserves more respect and better wages than it gets in early 21st century NZ.

    Comment by George D — September 19, 2012 @ 12:47 pm

  23. One of the reasons we have unemployment benefits instead of something like military conscription for the unemployed or ‘work-for-the-dole’…

    The other might be that we aren’t some sort of Singapore-style dictatorship. Yet.

    Comment by richdrich — September 19, 2012 @ 12:55 pm

  24. Of course the flip side is allowing people to continue to turn down employment until that exact right career-advancing role in their specialist industry comes up, and taxpayers funding them to do that. In reality, getting the “rules” right as to what constitutes “suitable employment” feels like a minefield to put any consistent structure around…

    Comment by garethw — September 19, 2012 @ 1:21 pm

  25. The positive aspect of qualified and skilled people “flipping burgers” is that their previous experience and moral standing (they got their qualifications and skills because of hard work) means that productivity in those entry-level positions is raised for the interim, meaning the employer is making more of a profit than they would make from someone they would normally employ in that job, and hence they eventually have the capital required to extend their business or start another business that employs those that are skilled and qualified.

    Comment by Dan — September 19, 2012 @ 1:38 pm

  26. There is also the potential upside of having the better educated/qualified unemployed rather than those with lesser skill levels. As a generalization the better educated are less like to create problems for society in committing crimes of theft, violence, property damage, drug or substance abuse etc. The better educated are more likely to be self managing, self motivating, potentially contributing to society in voluntary work. I accept there will be exceptions to this, but as a rule of thumb I think it would be true.

    Comment by trgnick — September 19, 2012 @ 2:06 pm

  27. “…means that productivity in those entry-level positions is raised for the interim,…”
    @ Dan – that is really arrogant mate! In my experience (with several degrees to my name), unskilled & unqualified workers (both young and old) tend to work just as hard as uni-qualified staff like myself (talking about unskilled jobs obviously where both skilled and unskilled can work alongside each other). I think it is something to do with moral drivers of wanting to do a good job, etc.

    Something no-one has really mentioned is that this ‘push to work’ is compounded by exploiter bosses. It is not uncommon to have false job listings placed with WINZ (ad says full time, turns out to be part-time casual, etc), and many bosses of low skill jobs have a feudal attitude to their serfs… sorry staff. You start and finish when they say, and they can never tell you when that will be until they tell you…. meal breaks are an optional extra for 5-15mins max, etc. All this is from personal experience, so anecdata only, but…

    And who said we can gets jobs when up against the rapidly increasing problem of migrant worker exploitation. Unite union settled with Burger King over BK’s use of migrants for unskilled jobs they “couldn’t” get Kiwis for, complete with pressure not to complain about unpaid overtime or you don’t get boss support for promotion needed for residency. A problem in Oz too.

    Happy times on Planet Key😉

    Comment by bob — September 19, 2012 @ 2:37 pm

  28. I second bob there, Dan.

    Your supposition around skilled vs unskilled productivity in the context of a requirement for unskilled labour has no basis in fact. Work ethic has very little to do with qualifications. It’s all about personal motivation.

    Comment by Gregor W — September 19, 2012 @ 4:16 pm

  29. >It deserves more respect and better wages than it gets in early 21st century NZ.

    I totally agree, George. We still need it, as much as ever. Someone still has to clean the toilet, collect the garbage, dig holes, etc. Or these things just won’t be done. They can involve quite hard work at times – there’s no reason based on fairness that the remuneration for them should be so poor. The reason that it is poor is because it can be, not because it should be.

    Comment by Ben Wilson — September 19, 2012 @ 4:25 pm

  30. There is the personal motivation aspect to work, of course, however it is preferable having everyone on the unemployment benefit apply for all jobs that they can find and work in suitably (there goes that work again)! It doesn’t make sense for the skilled and qualified to be able to sit around and wait for employment at their skill level to crop up, because it may be a period of years before that happens. That was an option considered by previous posts, which is why I pointed out the positive benefits of skilled people working in entry level positions.

    I agree with what both Bob and Gregor W are saying, because personal motivation is highly variable and there is probably around the same number of unskilled people that have the same amount of personal motivation as highly skilled and qualified people. I wasn’t meaning to imply otherwise.

    Also, there are some workplaces out there with mostly all unskilled people and a very low level of personal motivation and, of course, these workplaces could do with motivated and skilled people. For those people to not want to work there because it is “below them” is an attitude that is not at all compatible with reality, nor the requirements involved in receiving the unemployment benefit.

    Comment by Dan — September 19, 2012 @ 4:35 pm

  31. DUH! When everyone is work ready they will be put to work building holiday highways, by hand.

    Comment by frank_db — September 19, 2012 @ 5:26 pm

  32. When everyone is work ready they will be put to work building holiday highways, by hand.

    And golf courses. Plenty of them.

    Comment by George D — September 19, 2012 @ 5:31 pm

  33. My putter shivers in anticipation..

    Comment by frank_db — September 19, 2012 @ 5:49 pm

  34. Ben

    I agree with you but have to point out that there is little case for those positions to be paid more. The minimum wage, for example, has recently been increased. But tax at the minimum wage sorely needs to be reduced. Significantly.

    Personally I’m in favour of a 10% tax rate for those earning under $10,000 a year; then a tax rate of 15% up to $20,000 a year (which includes part-time minimum wage workers, those that most of all deserve a tax break); the a higher tax rate, 22% perhaps, for those earning higher than that.

    Comment by Dan — September 19, 2012 @ 6:54 pm

  35. >I agree with you but have to point out that there is little case for those positions to be paid more.

    Other than fairness. Yes, no one is going to do it for economic reasons, because it is the economic reasons that are making it poorly paid.

    Comment by Ben Wilson — September 19, 2012 @ 7:15 pm

  36. If you are low skilled, then you are paid accordingly. If you are highly skilled and have a specialised job, you are paid well. The question is: when the minimum wage has just been raised, is it fair to raise it again in such a short time frame? $15.00 or $16.00 per hour straight jump up from $13.50? No, that doesn’t seem fair to me either.

    There would be little moaning about low wages if the tax rates had been reduced significantly (fairly) for people on low incomes, but no, they haven’t.

    Comment by Dan — September 19, 2012 @ 8:21 pm

  37. Also should be a cap on the salaries in specialised professions, but they should still be paid more than entry level positions

    Comment by Dan — September 19, 2012 @ 8:22 pm

  38. Dan says of the reluctant over-qualified that they share ‘an attitude that is not at all compatible with reality’ Like many commentators on this issue he fails to concede the point that there are not the jobs available to soak up all those without work and have not been for the last four years. The future looks bleak with the looming aussie slowdown, and that’s without considering the screwed global economy with the recession pushing down wages,- off-shoring anyone? – and drying up of domestic consumption as a consequence. That is ‘reality’
    What Dan and his ilk should be considering is how we as a society are going to handle a future where this is the new normal. Are we going to jointly share the fall in standard of living, where maybe we as a society agree to trade off hours of work through job-sharing and to allow for an increase in leisure, or will we work assiduously as this government seems to doing, to create a class of permanent untermenschen?

    Comment by paritutu — September 19, 2012 @ 8:33 pm

  39. I don’t know.
    Create jobs in forestry, like they had in the seventies?
    Trim some of the fat off the roading budget, to create employment that is permanent?
    Introduce CGT (comprehensive) and use the money to increase jobs in new SOE’s?
    Increase the top rate of company taxation to bring in more revenue?
    Explore our mineral potential, with a view to creating employment and a boom similar to that of Australia?

    And we all should share the fall in the standard of living, but try telling that to this government.

    Comment by Dan — September 19, 2012 @ 8:55 pm

  40. >If you are low skilled, then you are paid accordingly.

    You don’t say. The question to me is: Is this actually fair? Work still has to get done, both low and high skilled, it still takes away the time and uses up the energy of the person doing it, and gives utility to the people receiving the outcome.

    I’m not saying this from a position of sour grapes. I’m very highly skilled, and have been paid extremely well over the years. I’m just honest enough to realize that that was less about me getting my just reward, and more about me being quite lucky. Lucky to be able to get the skills, lucky to have the talent to get them, lucky to live in times when those skills were demanded.

    Comment by Ben Wilson — September 19, 2012 @ 10:36 pm

  41. I’m just honest enough to realize that that was less about me getting my just reward, and more about me being quite lucky

    People are usually very keen to attribute success to their own effort, forgetting how much fortune plays a role.

    And yet becoming say a medical specialist does require huge persistence and ability. It’s seems right they get paid more than other people in other health positions.

    There was an attempt to level things out in Cuba but it ultimately caused more harm than good.

    People are a bit irrational and sometimes it’s better to work with those tendencies rather than directly against them.

    Comment by NeilM — September 19, 2012 @ 11:02 pm

  42. I like your view on the subject, Ben. With me, I know what it’s like to try and get qualified and yet be relegated to working in low paid unskilled (or minimally skilled) positions, so I understand where you’re coming from.

    Comment by Dan — September 20, 2012 @ 1:57 am

  43. I read this thread and I think that the elephant in the room is the unspoken Victorian middle class horror that somehow the indigent are free loading on the hard working and the virtuous, and something must be done to correct this clearly immoral state of affairs. But we live in an advanced, prosperous industrial society. Is it really so bad if a couple of young people take a year or two off on the dole to go surfing before they settle down to the slog of life? What is wrong with an old man sitting on a beach with his kontiki and whiling away his time with, say, an unemployed beach comber? Is it really so bad if the broken, the weak, the incurably lazy, the eccentric and the rest of the deitritus trampled under the feet of our dog-eat-dog capitalist society retreat to run down shacks in the country and eeek out a living on a government benefit? They mostly harm no one, yet we have a minister who finds in bullying and brutalising them the highest political ecstasy she can imagine. And as for those who we deign to loath, the bad parents, their beaten children, is beating them harder going to achieve anything, apart from making certain sadists feel better about themselves? Or is just going to reninforce what they already know about society, for whatever reason they know it?

    Yes, work provides dignity, gives you something to do and it should pay you enough to allow you to enjoy the simple pleasures of being. But work isn’t a moral imperative to be elevated above others like empathy and caring for our brothers, it isn’t a rigid duty and it isn’t something that everyone should make a fetish of. It is a means to an end and if you are lucky you’ll enjoy it as well and if you are really really lucky you’ll be well paid.

    Comment by Sanctuary — September 20, 2012 @ 10:25 am

  44. wow
    Never seen anyone post something as deep and meaningful as that before

    Comment by Dan — September 20, 2012 @ 12:10 pm

  45. “But work isn’t a moral imperative to be elevated above others like empathy and caring for our brothers,”
    Nice sentiment, but over the years “empathy and caring” has given way to a culture of entitlement. The doling out of money has taken on an impersonal air: the people taking the money (beneficiaries, public servants, politicians, corporate welfarists) don’t have to look the taxpayer in the eye. This is what happens when those who crave power (or simply the limelight and a great salary plus perks) have access to our money. What about some “empathy and caring” for the poor sods whose morals don’t allow them to switch-off, drop out and opt out? The ones who pay the taxes. After all, it is WORKERS who pay the taxes in this country, so it is WORKERS who get stiffed everytime a politician or bureaucrat thinks up a clever way to spend money (Families Commission, Home insulation subsidy, kiwisaver subsidy, holiday road, stadium, world cup, RightCar).

    Comment by Clunking Fist — September 20, 2012 @ 12:54 pm

  46. @ sancy ” It is a means to an end” no shit sherlock. Like looking after yourself and family unless you feel like jerking off in which case the state should fund you?

    Comment by Tim — September 20, 2012 @ 4:40 pm

  47. CF

    That is a relatively simple way of summarizing it. After all, it is also those workers (as well as beneficiaries) that benefit from the Home Insulation subsidy, the Kiwisaver subsidy, etc. Don’t see much money from the unemployed going into Kiwisaver.

    Comment by Dan — September 20, 2012 @ 5:00 pm

  48. @ sanc

    Apparantly a number of other usually ‘liberal’ democracies are experiencing similar shifts in public perception and following a similar tightening path. It makes me wonder if opinion on benefits is counter cyclical. People tolerate, to an extent, benefit ‘abuse’ in good times because there are better things to worry about. But, in times like these, large numbers of us normally employed and secure are worried about our jobs, and can see ourselves on those benefits potentially for some time. That fear and prospect of being seen as ‘in need’ focuses us on questioning whether those who have been claiming benefits were as truly needy as claimed. More succinctly: “We deserve benefit X because we have been working/paying taxes and it is a safety net we paid for. What have those others been doing all this time?”

    Comment by insider — September 20, 2012 @ 5:12 pm

  49. No. We question leftards like Sancy who claim society should fund dropkicks who want take a year off.

    Comment by Tim — September 20, 2012 @ 6:05 pm

  50. “That is a relatively simple way of summarizing it.” Not as simples as your limits on salaries for surgeons and architects though.

    “it is also those workers… that benefit from the Home Insulation subsidy” How much does the scheme cost to administer? How much spent on graphic designers for all the brochures posters, websites mailouts tv advertising, paying the royalties to the actors every time the ad is shown? How much spent on meetings with catering while the policy was formulated (and folk who work for the govt (and biggish corporates to be fair) always have catering at meetings, perhaps they think it is “professional”)?
    Don’t you think it would be better to just charge workers less tax (say get rid of GST), rather than tax them and then make them claim it back in bits and bobs?

    Comment by Clunking Fist — September 20, 2012 @ 6:44 pm

  51. *mutters* I left a comment last night, many comments ago, but it seems that WordPress ate it. I had links and stuff as evidence, so it may have objected to those.
    Essentially, I went and looked up how much someone on the benefit gets as my flatmate recently ended up on it (for very good reason) leading to mass panic as they would no longer be able to pay rent (until their parents stepped in to pay the difference). They get $170 after tax (all single/half of a couple ‘normal’ people who don’t have kids or qualify for any extra categories).

    Which leads to two major questions: Why – WHY is someone getting taxed on their benefit?? And why should the benefit be so low that they cannot actually survive on it but must STILL depend on the generosity of others to make up the shortfall? (Should everyone else have paid their bills and rent for them? Should we have had to kick them out and spend an unknown amount of time with no rent being paid while searching for someone else? We’re hardly an expensive flat to live in, so it’s not as if they were living above their means before).

    Comment by Flynn — September 20, 2012 @ 7:59 pm

  52. Flynn

    Around $130 for 18 – 20 year olds; $170 up to 25 years; $200 for 25 years and over. This is after tax but does not include the accommodation supplement, which is extremely variable depending on your type of living (board or rent) and the amount you pay.

    Comment by Dan — September 20, 2012 @ 8:29 pm

  53. No, CF, I don’t because, although you will probably disagree with me, I don’t think there is a lot of those sorts of incentives out there. There are a few, yes, but they cater to everyone without discriminating between societal classes and I would say that the admin costs have gone down under National because of their cuts to the public sector. So I do not feel that we currently have a problem in the area you mentioned.

    Comment by Dan — September 20, 2012 @ 8:33 pm

  54. Is it really so bad if a couple of young people take a year or two off on the dole to go surfing before they settle down to the slog of life?

    It wouldn’t but a problem arises when every young person feels entitled to do this or similar. That would cost a lot of money. Its not an option that could only be offered to a few.

    But work isn’t a moral imperative to be elevated above others like empathy and caring for our brothers, it isn’t a rigid duty and it isn’t something that everyone should make a fetish

    Have to disagree, work is part of the social contract, we do have a moral obligation to work in order to exchange our time and energy with that of others – why should teachers and health professionals work for others if they don’t contribute?

    Comment by NeilM — September 20, 2012 @ 8:36 pm

  55. $200 for 25 years and over.
    Unless you’re half of a couple, in which case it’s $170. $204 otherwise, yes (I was going by memory on that – it didn’t apply to my anecdote).

    This is after tax but does not include the accommodation supplement, which is extremely variable depending on your type of living (board or rent) and the amount you pay.
    And which they want to cut if multiple people are getting it in a house – e.g. multiple flatmates.

    But regardless, it’s about $40 a week in this case. Which would just about bring you to ‘I can almost afford this but please don’t let me have to buy petrol this month’. http://www.workingforfamilies.govt.nz/calculator/cancel.jspa?action=restart

    Comment by Flynn — September 20, 2012 @ 9:13 pm

  56. $49 a week, to be exact. It does go up if the variables change a lot, but it doesn’t scale with the low level of a benefit income (e.g. $170-200 gets the same amount).

    Comment by Flynn — September 20, 2012 @ 9:15 pm

  57. “Actually, if you read what Danyl wrote at the top, having highly qualified workers in menial jobs that don’t afford them the opportunity to readily seek skilled employment is actually more of a problem in the long run than paying them $220/week or whatever the UB is these days. It is a serious waste of productivity to have a skilled worker flipping burgers instead of looking for appropriate work.”

    Single unemployed 23 year old uni graduate, at the beginning of 2011, (including no accommodation support as I was lucky to be only charged $50/wk board) got you $155 a week.

    The scariest thing for me is how bigger difference in treatment you got depending on who you got at the office.

    One’s who put the time in to ensure you got all you were entitled too, ones who obfuscated, ones who wanted you through the door asap.

    My initial case worker told me that with my good degree, that I didn’t have to take a job in McDonalds. Another case worker told a friend (qualified mechanic) that he couldn’t get on the benefit because he didn’t want to take on a cleaning job.

    When I finally did get a job, they pay up to $300 for work clothing (in the form of a voucher), the first lady told me that they wouldn’t give the voucher for a higher end place for a suit on sale (with me topping up with the couple of hundred dollars id squirreled away), when I came back next week with a quote from a cheaper place, a different case worker told me it would be no problem to write the voucher to the original place for a flasher (speaking relatively here…) suit and have me top it up.

    …then there was the case worker who ranted to me about the new passports having Maori writing on the front of them and how she was so offended by it…

    There is very little consistency in the application of the rules, and apparently a huge amount of discretion in the application of the rules.

    I’d really hate to have someone in the middle of a bad day judging whether scrubbing toilets with a tooth brush is suitable employment for an accounting graduate.

    Comment by Michael — September 20, 2012 @ 10:50 pm

  58. Yeah

    What’s even worse is a mate of mine who got told he was entitled to $300 for his special circumstances, only to be told three days later by the same case manager when he took in the required documents that he didn’t fit into that category. Due diligence would mean that he would have been told that the first time.

    To qualify for a food grant, you need to have special circumstances and this is at the case manager’s discretion.

    They don’t even have specific case managers any more, which works well for them but not for the clients because you get a different quality of service each time you go in.

    In terms of adjustment to work grants, the ranges in discretion are high. One case manager might give you a few work clothes and some money for transport; another might give you food and advance rent on top of that as well. If you are going into a job and are moving because of that, the advance rent may fall under one category, which means you don’t have to pay it back, or it may fall under another category, which means you have to pay it back or pay some of it back. The category it falls under depends entirely on the case manager, their interpretation of the rules and their level of experience.

    A work broker or someone of a similar title may not do their homework on you despite seeing you every Monday morning for a group seminar, and give you a pointless phone call telling you about a course. You have already done this course four months previously, you passed it and it’s on your CV which you gave to this person two weeks before this phone call.

    You are obligated to take on contract work in vineyards and such, which means no work in the rain and no pay. You then earn under the threshold and need financial assistance. You ring up the call centre. This is highly variable, too. Sometimes they do it all over the phone, other times they merely record your details and tell you to make an appointment with verification of your pay. In the latter case, it may be three weeks before you can go in there because you still are obligated to work (and need to) and don’t have any time at all to go in there within two or three weeks because the vineyard is 45 minutes away, you have no transport and have to catch a van at 6.30am and you arrive back in town at 5.00pm.

    Comment by Dan — September 21, 2012 @ 12:04 am

  59. Dan @ 53 ”but [the incentives] cater to everyone without discriminating between societal classes”
    Bullshit, only homeowner with (say) $2,000 to spare can take advantage of the insulation subsidy. Only a professional couple can afford private preschool childcare in order to take advantage of the 20-hours Free-ECE (and the product was ALREADY receiving a subsidy BEFORE free-ECE). Only a couple with good disposable income can put 2% to 4% aside in kiwisaver in order to benefit from govt incentives and the employer subsidy. This is middle-class welfare. I would rather see GST removed than have these incentives.

    “and I would say that the admin costs have gone down under National because of their cuts to the public sector.” Oh you’re right: I personally know thousands of state sector employees who have been made redundant in the last few years.

    Comment by Clunking Fist — September 21, 2012 @ 9:32 am

  60. Michael @ 57 “I’d really hate to have someone in the middle of a bad day judging whether scrubbing toilets with a tooth brush is suitable employment for an accounting graduate.”
    If it is suitable work for your mother (who did it unpaid, no?), then it is eminently suitable work for the rest of us when times are tough. Praps we should get over ourselves and our degrees, lest we be snobs. Or fucking Gen (but wh)Y.

    Someone said “It is a serious waste of productivity to have a skilled worker flipping burgers instead of looking for appropriate work”
    Um, you evidently don’t know what productivity means, then: productivity only starts once one is producing something. If you are looking for work, you are producing nothing, so your productivity is nil. You don’t contribute to the economy by having a degree or training, you contribute to the economy when you produce something for which others are prepared to pay i.e. an employer is prepared to pay you a wage to do some work for them.

    Comment by Clunking Fist — September 21, 2012 @ 9:33 am

  61. Michael @ 57 While I waited for my opening in accounting, I flipped burgers and pumped gas. Loved it.

    Comment by Clunking Fist — September 21, 2012 @ 9:35 am

  62. And while my wife waited for her opening in law, she cleaned toilets and typed.

    Comment by Clunking Fist — September 21, 2012 @ 9:36 am

  63. I wonder if Tim recognises his own reflection in the mirror?

    Comment by Sanctuary — September 21, 2012 @ 10:10 am

  64. Germany was having this discussion when I lived there in the 90s – unemployment was around 11% and there was a lot of argument over what kind of work was “zumutbar” for an unemployed person, ie what level of indignity can the state subject you to, in the expectation that you’ll take on work you regard as beneath you – cleaning, for instance. An acquaintance of ours who was an engineer in the auto manufacturing industry was made redundant and went on the dole after using up his unemployment insurance, because working as anything less than an engineer would have been a “Zumutung,” ie an insult to his dignity. This while I was working successively as billboard-paster, shop assistant and airport checkin staff because my qualifications weren’t recognised. At the time, I was glad we didn’t play this kind of bullshit in NZ – or at least, I thought we didn’t.

    Comment by Psycho Milt — September 21, 2012 @ 10:41 am

  65. Overseas people would be protesting,in nz the people are ‘conditioned’ to accept
    anything that is dished out,there are the human rights commission,but is anyone
    brave enough to take key,english and bennett to the commission,no,we are too
    scared of them.

    Comment by anne — September 21, 2012 @ 11:51 am

  66. 62.And while my wife waited for her opening in law, she cleaned toilets and typed.

    Door-to-Door salesman for me. But technically it was still a ‘nil’ impacy on productivity of the measured sector, because we were all employed as independent contractors and paid no tax (shhhhh…. don’t tell IRD).

    Comment by Phil — September 21, 2012 @ 1:06 pm

  67. I grew pot.

    Comment by frank_db — September 21, 2012 @ 1:56 pm

  68. That’s not productive frank until you sell it.

    Comment by insider — September 21, 2012 @ 2:04 pm

  69. “68.That’s not productive frank until you sell it.”
    Increases in inventory are counted in production GDP figures aren’t they?

    Comment by Clunking Fist — September 21, 2012 @ 2:12 pm

  70. To summarise the arguments above: if the policy is considered to be one of preventing absolute hardship (starvation, absolute lack of shelter and clothing) among those who have fallen out of work and are thus in need of immediate support while finding the next job of any kind, it can be considered a success. If the policy is considered to be one of providing soft cushion between high value jobs (measured not only in income but also in specialised skills and outputs – societies value the surveyor more highly than the stop-sign operator even if they are paid the same), it can be considered a failure.

    No doubt it exceeds the first criteria, by some margin (a small one, I think most of the posters here would say). It does not reach the second. It will look even more like the first in a few short weeks when this policy is implemented.

    Comment by George D — September 21, 2012 @ 4:45 pm

  71. I see crime rates going up and private prisons being full of new crims. The new welfare policy signals its time to buy shares in private prison operators.

    Comment by Steve (@nza1) — September 22, 2012 @ 1:40 pm


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: