Dumb Down, If You Want To Get A Job In NZ

Edward Gay in The Herald is telling the story of a graduate who was allegedly told to by the Department of Work and Income ( WINZ) to remove her degree and experience from her CV if she wanted to find short term work.

"Work and Income staff told a woman with a university bachelor degree to "dumb down" her CV before applying for jobs.

Natalie Meehan hopes to join the Navy later this year and said she wanted to take on some short-term employment before the next in-take later in the year.

She went into her local WINZ office in Napier for help finding a job or a short-term allowance and was told to remove her Bachelor degree and any mention of her two administration jobs from her CV before approaching prospective employers at Pak'n Save and Kentucky Fried Chicken.

Work and Income deputy chief executive Patricia Reade said the WINZ case manager was trying to help Natalie target her CV at the kinds of jobs available for short term periods...

Ms Meehan said

"They said in order to get interviews I would have to dumb down my CV.
She said she hoped to get some part-time temping work but the WINZ officer told her to apply for jobs that do not require qualifications including Pak'n Save and KFC.

"She said: Make it look like you're completely unqualified because otherwise employers in Napier will feel like they're less qualified than you," she said.

Ms Meehan is living with her parents before she joins the Navy but said she felt sorry for anyone who had to pay their own way.

"What are you supposed to do?" She said.

Ms Meehan emailed the Minister of Social Development Paula Bennett and told her what happened. She said she also asked the Minister to look into the practice of WINZ staff telling people to leave qualifications off their CV.

A spokeswoman for Ms Bennet told nzherald.co.nz the Minister did not approve of people "dumbing down" their CVs.

She said the Minister was looking into Ms Meehan's case.

Ms Reade said WINZ did its best to help Ms Meehan. She said the Hawkes Bay Regional Manager will meet with Natalie to discuss her concerns."

Back in May WINZ  struck up a deal with global fast food giant McDonalds to provide 6,000 new jobs in New Zealand over the next three years.

The arrangement was later changed to allow for 7,000  McDonalds jobs to be advertised and trained for by the Department of Work and Income over the next 5 years. The Dom Post told its readers that “McDonald’s restaurants will receive up to $16,000 a year of taxpayers’ money every time it recruits a beneficiary under a partnership with Work and Income".

That's a $112 million bill for the tax payers (see "Would You Like A Future With That? The Burgerization of McZealand, Up To $16,000 A Head (updated) for the full story")
At the time MP Jacinda Arden asked the minister of youth affairs Paula Bennett this question across the floor of parliament:

“Will the Minister adopt any ideas other than those generated by McDonald’s, such as those ideas generated by the Youth Jobs Summit I hosted last week, including greater investment in skills and training, lifting the cap for tertiary education, and introducing a guaranteed employment or training scheme for the long-term unemployed under the age of 25 years, given that the Minister sees the power of working together to create creative solutions?”

Was this the best they could come up with? Is a job with a fast food company a career for life which will give all Kiwis higher wages and a brighter future? and was this THE initiative that will give “young New Zealanders a country that they’ll want to stay and work in” or just a cynical (and expensive) attempt to hack a few digits off the unemployment figures?

On 20 May 2007 John Key promised:

“If I have the great honour of becoming Prime Minister of this country then I want to leave a legacy too.
My legacy will be a strong New Zealand economy with higher wages, lower taxes and greater competitiveness. My legacy will be a country that young New Zealanders want to stay and work in.That’s what a National government will give you.”

What we're getting is a country where a government department  is telling job seekers to dumb down their CVs to get low paid, unskilled work. Looks to us like a gradual de-skilling of New Zealand is well underway.

Interestingly, today it was announced that unemployment fell to 6% in New Zealand over the last quarter, in a country where engineers, teachers and radiographers are driving taxis  it makes you question in which sectors the employment has been created doesn't it.

Update
This story generated a massive readers' response on the Yahooxtra.co.nz webpage. Here's a selection of their comments:

"I can understand the frustration the lady has with her qualifications, my husband has been told many times he is 'over qualified' for the positions he has applied for, having been out of work for many months(being made redundant) we have lived off our savings and not gone 'cap in hand' to the dole office pleading for a hand out, we have worked all our lives but it seems if you have no debts are not drugs dependent, not a 'overseas visitor' or are not from a ethnic..."

"Our case sounds a lot like yours - when my husband was made redundant they told him numerous times he was to overqualified and they wouldn't suggest him to employers for jobs. He would have done any job, and done it well, rather than getting the benifit but they wouldn't help us out on that front at all. Makes me so mad!"

"like many other people out there in newzealand. I have worked hard to get myself into better positions with companies this has now been a waste of time as alot of companies do not want to employ me as i have too much experiance and skills. i was also told to DUMB down my cv by winz."

"Work and income treat everyone out of work like f#cking morons, My husband has never previously been out of work, but was recently made redundant. He went to a "seminar" provided by W&I and came home demoralised and angry, He was treated like a desperate pauper, this "service" is neither productive or in any way helps jobseekers, I think a review is desperately needed"

"When I lost my job due to government cuts I went to WINZ to help me find a job, I was told to dumb down my CV in order to get a job as well. reading other comments on here I see that this is a common this. Its a sad thing that to get ahead in life we are told to hide who we are and pretend to be stupid."

"I was also asked to dumb down my CV by WINZ, so its nothing new. The few companies that have ever bothered to get back to me when I sent my CV have said that I am far too experienced, and this includes several so called Recruitment agencies. I have got the same comments when the job I have applied for is exactly the same as the last two jobs I had. Age discrimination is also rife, given that WINZ supplied me with a list of jobs where there were age restrictions, even though this is in..."

"I was told a similar thing after I left my husband 10 years ago - I was studying at Uni and I was told to give up the study as, and I quote "it wont get you any where, look at me, [The WINZ person] I did the same degree and now I work here." I was encouraged to stop study and get a cleaning job! I didn't listen, I found a job on my own and continued study and now have a great career."

"Well, our eminent Social Development Minister Paula Bennett is on public record saying in Parliament, that there is a 'job available for everyone.' Perhaps she should get her well-paid backside out of Wellington and direct her staff to find these elusive jobs for the unemployed, including those public servants who were recently sacked by this caring Government."

"I have recently been told by WINZ not to tell a future employer about a medical condition that I have that would affect my ability to do the job. WINZ said leave it out until I were asked. I was also told to dumb down my CV. Nobody wants to employ somebody over quilified because they will only be there until something better comes up. Edwin, I used to think a wee bit like you, but after being fully employed for 35 years and being made redundant I have changed my views somewhat. Better go pubs..."

"I did an unemployment thing with WINZ a couple of years ago. The most depressing thing I have ever done in my life. I have sworn that I would rather become a wino and live under a bridge than ever repeat that experience. I have a Masters degree and they thought the appropriate job for me was cleaning. When I get my doctorate next year, there is no way I am takeing that off my CV."

"Nothing new for all immigrants. We have to do this to run our families. Though NZ immigration requires qualified people (with master/bachelor degrees) but do not (can't) offer jobs of their profession. It is pity that it has come up in news now."

"I have been told to omit the fact that i have had back problems by acc. While it is not the same as taking a degree out of your cv, it does show that these people are basicly dishonest!"

"I got the same treatment twice, once from Winz and once from an independent agency. However, I don't know whether the recruiters or employers are at fault. I was told to remove astronomy from the interests in my CV in case, an employer thought I would not be able to, "talk to workmates during smoko." Laughable or ridiculous?"

"I agree regarding the seminars provided by WINZ. I went to one years ago and was disgusted how they treat you like a dole bludger straight off the bat. The guy giving the seminar told everyone that the unemployment benefit was a privilige not a right. In my books it is a right, I pay higher taxes here than in other countries who don't provide unemployment benefit simply as an insurance in case I need, making it a right as far as I am concerned."

"This seems to be the standard case manager bs line at Work & Income: "You're obviously not going to get a job in ______ (your trained field), is there any reason why you aren't working at McDonald's?" or cleaning?"

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Net Migration Falling, Permanent Departures Up 7.2%.

 We came across this press release on Voxy.com. The ASB says that net migration has fallen from its peak and could slow by more than half to around 10,000 people a  year. It seems that employment growth and a more favorable outlook across the Tasman will continue to attract Kiwis out of New Zealand.

These figures will have an impact on a housing market already feeling the burden of forthcoming changes in taxation of investment property, a proposal to increase GST to 15%  and a relatively strong dollar reducing the purchasing power of migrants.

"Net migration continues at a firm pace, recording net 1,060 new migrants over February, although showing some sign of softening. The annual pace of inflow is now easing from its peak, recording 21,600 new migrants over the year to February, compared to 22,600 in January. The slowing pace of migration comes as permanent departures have started to recover, rising 7.2% in February. This pick up has been underpinned by a recovery in departures to Australia, a trend we expect to continue over 2010. The Australian economy has fared comparatively well through the global downturn, managing to avoid recession. Employment growth there over the past 6 months has been robust, in contrast to rising unemployment in NZ. The more favorable economic outlook will continue to draw New Zealanders across the Tasman: we expect the monthly pace of departures will recover from 5,250 per month currently to 6,500. The annual pace of net migration is likely to slow from 22,000 per year, to around 10,000 per year.

Short-term visitor arrivals fell 1.9% in January. Nonetheless, the current trend level in visitor arrivals remains firm. Australian visitor numbers remain steady, after strong growth over the second half of 2010. We expect Australian visitor arrivals to remain firm, as the lower NZD/AUD makes New Zealand a relatively cheap alternative for Australian holiday makers. Encouragingly, there also appears to be an improvement in Asian visitor arrivals over the past few months. The increased interest has been broad based, with a rise in Japanese, Korean and Chinese numbers. However, StatsNZ have noted extra caution should be applied to interpreting Chinese visitor arrivals, as the typical seasonal pattern has been disrupted by the change in timing of Chinese New Year.

Implications

We expect the pace of net migration to slow over 2010, and the recent pick up in departures to Australia confirm this trend is developing. The slower pace of net migration will remove some of the support to the housing market during the year.

The ongoing strength in visitor arrivals has been encouraging, particularly the recent increase in arrivals from Asia. Meanwhile, the lower NZD/AUD is helping NZ benefit from Australia's good fortune, increasing NZ's attractiveness as a holiday destination. We expect that strong arrivals from Australia will continue as we head into the ski season."

What these migration figures don't show are the age profiles of the people coming to and leaving New Zealand and that a brain drain is underway again.

In the opinion of one prominent economist in Singapore last week  New Zealand's brain drain should be plugged with opportunity. Yuwa Hedrick-Wong, MasterCard Worldwide economic adviser said:

"The exodus of the best and brightest to Australia is an Achilles heel for New Zealand business, and personal and business tax breaks may be part of the answer, according to a visiting economist.

MasterCard Worldwide economic adviser Yuwa Hedrick-Wong said the persistent trend of migration to Australia of more than 20,000 people a year "seriously constrains entrepreneurial potential" here.

Speaking in Wellington, Singapore-based Dr Hedrick-Wong said those leaving for Australia tended to be "younger and better educated" people typically with a greater risk-taking attitude.

"They want to conquer the world," he said, but they should be able to do that from New Zealand, rather than having to leave.

"This is a damaging drain on the intellectual and entrepreneurial gene pool of the country," he said.

New Zealand could only reach its true economic potential if it stopped the "haemorrhaging of talent", he said.

Despite economic reforms in the past two decades and being an easy country in which to do business, New Zealand was still losing talent, Dr Hedrick-Wong said.

New Zealand should consider personal and business tax breaks as personal incentives for people to stay, support for business incubators and encouraging greater investment in areas such as the services sectors to create more job opportunities.

"If you are successful in getting those people back, the economic benefit is just huge," he said..."

In June of last year Bernard Hickey was interviewed on TVNZ. He advised Generation X & Y to leave NZ as soon as possible because they are destined to live in two retirement islands and will have to visit their grandchildren overseas. Read our post about it here. He concluded by saying:

"Your only choice is to migrate as soon as the global economy starts recovering and the jobs become available again.
This will be the best revenge you can get. They (the baby boomers) will have to watch their grandchildren grow up by email and the occasional flying visit.
I'm not kidding. Leave ASAP."

It looks like they are!

See also: "New Zealand's Aging Population and the Great Kiwi Brain Drain" written in December 2008. At that time John Key said  

"One of the really worrying things is one in four people who have been to university have now left New Zealand and live overseas. That is the worst brain drain of any country in the developed world."

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Returning Kiwis Views About New Zealand

There's a great discussion going on today in the blogs section of the online New Zealand Herald, the topic centres around the number of expat New Zealanders returning to their homeland and their thoughts about it. It's worth a read, if you have the time, because their comments are so similar to those of many migrants in the country. Read them here: "As an expat, what are your thoughts on returning home?"

Here's a selection from the many, many pages of responses:

kk (Canada)
Wednesday September 23, 2009 "We are currently living in Canada and have also lived in the US. Coming back to NZ is a bittersweet decision for us, the main drawcard is family, the beautiful countryside, and our children growing up literate.
But for a small country, NZ has developed a shocking culture of violence, I have felt safer in these countries at night than in NZ, granted we have lived in great towns but there wouldn't be many places in NZ I would walk at night.
We've been reading the news regularly to ease back being home and Im ashamed to read headlines like the 'h' in Wanganui rubbish next to one about yet another abused/killed child.
When people ask me about the utopia they believe is NZ , I say sure its a stunningly beautiful country with clean air, but never hitchhike, be careful where you camp for the night, walk down to the dairy at night, stare at anybody, walk home from the pub, sleep on a beach or leave anything not bolted down outside and you'll be fine."

Andrew kiwi in the (United States of America)
Wednesday September 23, 2009 "There are a few things that make me worry about coming back, one is the actions of the dictatorial enviromentalist movements. Another is the government seeming desire to control people. Banning certain styles of parenting? That is concerning. What else will you be unable to do because some bleeding heart socialist do-gooder decides it is in your best interests to deny you the right to decide that? There are schools of thought that population control is required to save the planet. Will we have to apply to have children at all? These new enviro-nazis seem determined to destroy the economy to solve a problem that hasn't even been proven to exist!"

YouKNOWItsTheTruth (Mairangi Bay)
Wednesday September 23, 2009 "I keep reading about this mythical NZ lifestyle. A few people here have listed mountains as a reason to come back. A big hill is a reason to live in a country?
Seriously, how many people in NZ actually go mountain climbing? Just as only 134,000 watched the Boks beat the All Blacks in SA last month, there seems to be this fantasy that all Kiwis love rugby, ski, surg, mountainbike, fish, have a bach and watch rugby.
If you do, good on you, you'll love NZ. Most of us don't though. And the weather is rubbish. Makes me laugh when Kiwis slag the UK weather. AKL has more annual rainfall and worse air quality than London. And although the UK can be colder (than AKL, not necessarily the South Island) houses are built to cope with it, unlike here, hence all the asthma. And don't get me started on leaky homes."

ryan (Bahamas)
Wednesday September 23, 2009 "Reasons not to return:
1. tall poppy syndrome
2. small minds village attitude
3. low wages which = bad lifestyle
4. too many pacific migrants going on dole and crime
5. murders and crime increasing, sentences for crims are a joke and justice system is a joke
6. nz is backwards go back to 50s
7. racism,
8. lazy people on benefit and dole
9 lack of career opportunities
10 lack of excitement/ culture
11. too much rugby
12 boy racers / hoons/rednecks on every street corner

i can go on and on,
this lifestyle thing is crap its a term people use into brainwashing themselves, many countries have glorious beaches , sun and the good outdoor life"

Jason (United Kingdom)
Wednesday September 23, 2009 "My wife and I looked at returning to NZ last year but the jobs just aren't there for us.

My wife graduated with a doctorate from Oxford University in record time and has an outstanding publication history. She applied for a job at Auckland University, jumped through all the necessary hoops and time-zone differences for conference calling and then they gave the position to a much less qualified person currently working in the lab in Auckland with no publication history.
Many other colleagues from sciences and medicine have said the same to us - the field is so under-invested in that there is no potential for NZ to contribute in anything but agricultural sciences and departments in NZ are too busy protecting the interests of current staff that they can't take on expats returning. When i first came to the UK, NZ had the edge in internet and IT, banking services, etc - now, when i come back for a holiday, i notice it hasn't progressed in the past ten years, it's just another quaint little island in the south pacific that you go on holiday to, slowly slipping down the international development scales."

Would You Like A Future With That? The Burgerization of McZealand, Up To $16,000 A Head (updated)

Update: The Dom Post is carrying a story today saying "McDonald's restaurants will receive up to $16,000 a year of taxpayers' money every time it recruits a beneficiary under a partnership with Work and Income.That's potentially a $112 million bill for the tax payer.

New Zealand already has the world's greatest number of McDonalds restaurants per $GDP and the second highest number per capita (the first is the United States) add to that New Zealand's dismal record in obseity - third highest in the OECD - and many will ask does the country really need more fast food joints.

One time truck stop waitress Social Development and Employment Minister Paula Bennett is citing the relationship with the fast-food giant as an example of the Government's commitment to getting beneficiaries into jobs but a long-term unemployed person could gain an employer a $16,000 subsidy over 12 months more than $300 a week.

Seems like an awful amount of money to be spending at a time when cut backs are being made in higher education courses.

On 20 May 2007 John Key promised:

"If I have the great honour of becoming Prime Minister of this country then I want to leave a legacy too.

My legacy will be a strong New Zealand economy with higher wages, lower taxes and greater competitiveness. My legacy will be a country that young New Zealanders want to stay and work in.That's what a National government will give you."

Contrast that with recent reports in the papers:

• Stuff.co.nz "Thousands of beneficiaries could soon be flipping burgers under a deal between Work and Income and McDonald's."

• NZ Herald "Education Minister Anne Tolley says there is no more money to fund extra places in polytechnics during the recession. Between 6000 and 8000 students would be turned away because of the Government cap on places in the following year." (ed. but there's 7000 jobs going at Maccas)
  

• Jobless people looking to upskill through polytechnics could be turned away if the Government does not lift the enrolment cap."

Back in May the Department of Work and Income struck up a deal with global fast food giant McDonalds to provide 6,000 new jobs in New Zealand over the next three years.

Any ideas other than McDonald's?

At the time MP Jacinda Arden asked the minister of youth affairs Paula Bennett this question across the floor of parliament:

"Will the Minister adopt any ideas other than those generated by McDonald’s, such as those ideas generated by the Youth Jobs Summit I hosted last week, including greater investment in skills and training, lifting the cap for tertiary education, and introducing a guaranteed employment or training scheme for the long-term unemployed under the age of 25 years, given that the Minister sees the power of working together to create creative solutions?"

I think her question must've gone unanswered.

That is until today, when our worst fears were confirmed with the news about 7,000 (ed. where did the extra 1,000 come from? ) McDonalds jobs are to be advertised and trained for by the Department of Work and Income over the next over 5 years (ed. huh? I thought it was 3 years )

Is this the best they could come up with and is a job with McDonalds a career for life which will give all Kiwis higher wages?

Is this THE initiative that will give "young New Zealanders a country that they'll want to stay and work in" or just a cynical attempt to hack a few digits off the unemployment figures?

Last year Chantelle Coup, age 18 and who now lives in Australia, was awarded $15,000 after being constructively dismissed from the McDonalds in Kaiapoi for joining the union 'Unite' in August 2007. Chantelle, who was 17 at the time, had her hours cut and she was bullied into resigning. Chantelle later said that she'd like to use the money to pay off her student debts.

At the time Unite's national director Mike Treen said in a statement that his union often had problems with McDonald's franchise operators, saying that they often took the decision of their employees to join the union as a personal affront.

The employer was also found to have been destructive in their dealings with Unite Union and to have used undue influence to get their employees to resign from the union.

The restaurant manager was described in the Employment Relations Authority report to have been in a "position of significant influence" over their work. The boss, Patrick Cornish, was described as a "father figure", and it was acknowledged that McDonalds Kaiapoi is "part of a large and powerful organisation."

The workers there were all young and none of them had guaranteed days or hours of work. This fact, coupled with pressure from the manager was found to have pushed a number of staff to resign from the union.

"That is one reason we want security of hours included in their new collective agreement with McDonald's."

Unite also stepped up its campaign to end bullying at McDonalds restaurants and supported staff at four sites to stop work to protest a contract that allowed their employer to use their shift roster as a form of bullying and control. They cited cases where a McDonald’s manager demanded that a seventeen-year-old girl stay and finish her shift after her foot was run over whilst working at a drive through and many occasions where workers were pressured to work two or three eight hour shifts in a row with no breaks or being rostered off.

Patrick Cornish said he would appeal the decision and file a new case with the Employment Court. Chantelle would have to return from Australia where she now lives to attend the hearing. Mr Cornish did have a range of other options open to him including making an out of court settlement. No such case seems to have been heard at the Employment Court. but neither has there been any news about Chantelle receiving her compensation.


In October 2008 Unite organised a series of lunch and dinner strikes in Auckland and Hamilton at around the time that McDonalds Corporation announced a third quarter profit of $1.07 billion. The rolling strikes in some of NZ's poorest suburbs were used to put pressure on the company to match what competitor 'Restaurant Brands' (KFC, Starbucks and Pizza Hut) pays union members. Full time managers and crew at Restaurant Brands are paid $20.80 to $174.40 a week more than McDonald's workers. Mike Treen said:

"It's disgusting the world largest fast food corporation is gloating over its soaring profits while the majority of its crew are stuck on minimum wage and managers are paid less than $15 an hour. It is however a true reflection of the world economy with the rich getting richer and making sure the poor stay poor.

"There have now been more than 35 strikes at 24 different restaurants and we plan to escalate this campaign until our 1200 union members at McDonald's get secure hours and decent pay rises."

Wage rates for 16 and 17 year olds are 80% of the adult rate, i.e.$10 an hour but that rate is supposed to have been abolished at all the employers organized by Unite including McDonalds, KFC, Pizza Hut, Burger King, and the major movie theatre chains.

Is McDonalds really the best company to be pouring the future of New Zealand's youth into and will it do anything to address New Zealand's much lamented low wage economy or its expanding waist line.

I seriously doubt it.

For today's posts see: latest posts

Women's Pay Discrimination Rally Today

Although New Zealand was one of the first countries in the world in which women were allowed to vote it's lagging behind on pay parity between men and women.

NZ women earn an estimated 12-15% less an hour less than men, but the annual earnings gap may be worse because many women spend more time than men bringing up children and move in and out of the labour force more often.

A rally is being held in Wellington today to protest this and also the government's scrapping of the Pay and Equity Unit at the Department of Labour, causing the loss of 7 jobs (ed. how many of them were women?) For details see link: Lunchtime rally

The Department of Labour cut an additional 18 jobs of staff who worked with with employers, educators and local government throughout the country to meet regional workforce needs.

Meanwhile plans are still going ahead for Work and Income to help with the recruitment and training of 7000 staff for fast food giant McDonalds.


For today's posts see: latest posts

Gen X and Y Advised To Leave New Zealand ASAP

TVNZ Breakfast show carried an interview recently with Interest.co.nz's Bernard Hickey in which he advised Generations X and Y to leave New Zealand because they are destined to live in two retirement islands and will have to visit their grandchildren overseas.

This article may be of interest to any migrants considering New Zealand as a 'good place to raise children'

Readers may also wish to look at some other blog posts "would you like a future with that? the burgerization of McZealand" and "McJobs government sentences kiwi kids to a dead end future" They touch-on cuts in polytechnic education and government's plans to recuit 7,000 new staff for international fast food giant McDonald's, neither of which will do much to improve the low wage economy or career prospects for young people.

Our regular readers may also remember Luthien's post "New Zealand's ageing population and the great Kiwi brain drain". Since the 1970s New Zealand has experienced one of the sharpest drops in the OECD in the number of young people within the working population - the fourth largest fall behind Korea, Canada and The Netherlands.

Hickey's comments were published in his blog and in the NZ Herald:

"Generations X (30-45) and Y (15-30) need to wake up and see the massive inter-generational theft happening before their eyes. Baby-boomers need to be shocked into knowing they are being shortsighted and will end up living in two retirement islands and having to visit their grandchildren overseas. Bernard Hickey writes Gen X and Y a letter. They can imagine it is a long email or text message.

Dear Generations X and Y

Did you realize the baby boomers running the country have just decided to make you poorer for decades to come so they can retire early with all the assets and high incomes?

Did you realise your taxes are going to rise and you won't be able to afford your own home? Did you know the baby-boomers are refusing to save their own money now for their retirements so they can live off your hard work?

"you're wasting your time trying to build a family and life in New Zealand"

Did you know you will be slaving away paying high taxes in your 40s and 50s to pay for their pensions and health care? Did you know you're wasting your time trying to build a family and life in New Zealand? Did you realise you have huge student loans while they received free tertiary education?

Do you realise they voted themselves Working for Families so they could have children and afford to pay the high mortgage costs of their borrowing to buy property? Do you know this cannot be afforded in the next 20-30 years?

You didn't? Let me explain.

There were two big decisions in last month's budget that guaranteed this intergenerational transfer of wealth, but they are not the only factor.

Prime Minister John Key and Finance Minister chose to abandon contributions to the New Zealand Superannuation Fund (the Cullen Fund) for the foreseeable future. Yet they also guaranteed their fellow baby-boomers (they were both born in 1961) they would keep their pensions at 66 per cent of the average wage and could still retire at the age of 65. John Key has even promised to resign if he breaks this promise.

"X and Y will never be able to afford to buy a house"

There is another unwritten rule that no baby-boomer politician will break and that will guarantee many in generations X and Y will never be able to afford to buy a house. John Key again ruled out this month that his government would ever introduce a capital gains or land tax. Any change to the massive tax break in favour of residential property investment would immediately reduce the wealth of baby boomers who were able to buy cheaply in the 1990s and early 2000s. They will never give this up voluntarily and they will continue to vote for politicians who support that view.

So the two budget decisions, the unwritten rule on capital gains/land taxes and the decade of slow growth forecast by Treasury will combine to cement in a massive transfer of wealth. There are other forces at work here. Our banks are congenitally conservative about lending. They will lend up to 100 per cent against the value of land and buildings, but are reluctant to lend to back the business ideas and entrepreneurial vigour of Generations X and Y.

The dream of baby boomers is to keep buying rental properties and renting them out to generations X and Y. They can even afford to make losses on them because they can claim the tax losses against their personal incomes and make their money back with capital gains. That baby boomer dream was looking wobbly earlier this year when prices fell 10 per cent from their peak. A smidgen of light appeared for Generations X and Y. But it seems those hopes are now dashed because the banks are back lending to the baby boomers, who are even more convinced now that property is their only hope because of the collapse of finance companies and the stock market.

"Steadily rising taxes over the next 30 years"

Now you can look forward to steadily rising taxes over the next 30 years, particularly from 2020 onwards, to pay for the increased costs of an expensive universal pay-as-you-go pension scheme and much higher universal 'free' health care costs. You will pay as they go into the retirement homes.

You could try to overturn the baby boomer bias in our political system by voting them out, but you'll fail because there are too many of them and you don't vote much.

Your only choice is to migrate as soon as the global economy starts recovering and the jobs become available again.

This will be the best revenge you can get. They will have to watch their grandchildren grow up by email and the occasional flying visit.

I'm not kidding. Leave ASAP."

For today's posts see: latest posts

McJobs Government Sentences Kiwi Kids To A Dead End Future.

This week the Prime Minister John Key (also Minister for Tourism) confirmed that the government is to pour $1 million into the '100% Pure New Zealand Winter Games'. It was also announced that Tourism New Zealand had obtained the naming rights sponsorship deal on the event.

Further cutbacks on Tertiary Education
In the last few days it's been announced that $1 million in redundancy payments to Otago Polytechnic staff pushed the institution to its worst financial result in 5 years. Meanwhile, three Government-funded tertiary student scholarships (Step Up, Bonded Merit and Top Achiever doctoral schemes) have been axed to save $98 million.

I think we're beginning to see where the future of New Zealand's youth will be headed: the low paid service sector industry, tourism and prison management.

Now the Maritime Union has spoken out in a press release against the NZ government's plan to facilitate McDonalds' expansion of its trading base by 'helping' the company to recruit 7,000 people over the next 5 years:

"The Maritime Union says the National Government's plan to act as a compulsory recruitment agency for McDonalds fast food chain is a travesty.

One time truck stop waitress and Minister for Social Developlment Paula Bennett has described an agreement between WINZ and McDonalds that will provide up to 7000 unemployed workers for the fast-food chain's growth plans over the next five years.

Maritime Union General Secretary Trevor Hanson says the scheme has two beneficiaries - a Government with a failing jobs policy, and a global corporation that will suck profits out of New Zealand.

He says the scheme is condemning working class young people to a dead end future.

Low wage, casualized trap
"The fact is that for most people, working in these jobs is not a career path, it is a low-wage, casualized trap." He says he is interested how many children of National Party MP's are being sent off to develop their careers as burger makers.

Mr Hanson says that claims that such "McJobs" will provide a career path are similar to the burgers. "They always look good in the ads but when you eat them they never live up to the promises."

Mr Hanson says that thousands of skilled jobs in manufacturing are being demolished, and freezes in funding for polytech places will keep young people out of training. He says young New Zealanders should have the opportunity to work in areas like the maritime industry or the fishing industry for decent wages.

"Yet what we see is underpaid and often exploited overseas crews working in New Zealand waters while local people are shovelled towards the dole or the chip fryer."

Social divison, inequality and erosion of family life
Mr Hanson says the current scenario is that New Zealand is going to have a massive low-wage sector that would breed enormous social divisions and problems. He says secure, wellpaid jobs have long been under attack in New Zealand, as profits ballooned but workers saw their incomes shrink.

"Under the current Government we are only seeing two areas of employment growth, prison staff and fast food, if this is a success I'd like to see what a failure looks like."

Mr Hanson says the toll of casual jobs, multiple jobs, irregular hours and shift work in a "24 hour society" was causing massive social inequality and disruption to family and community life, leading to stress, health issues, crime and family breakdown."

McHospitals
In October of last year health chiefs called for southern health boards to cut ties with fast food companies such as McDonalds to fight a dramatic rise in obesity. Otago DHB public health group manager Pip Stewart criticised " the health sector's willingness to form links with fast food outlets when it should walk away, as it does with tobacco and alcohol companies.

Sponsorship from the likes of McDonald's would contradict promoting good nutrition and physical activity, needed to reverse the rise in obesity." See McHospitals

230,000 kids live in unacceptable poverty
22% Kiwi kids live in unacceptable poverty - that's 230, 000 youngsters according to a report prepared for Barnados and Cindy Kiro the Children's Commissioner. Cutting back on training and investment and condemning 7,000 young people to low paid futures in the prison service and fast food joints makes for a pretty dismal future. What a pity the 'New Zealand Lifeback Promise' only extends to tourists.

Wouldn't it be better to use some of the massive profits that companies like McDonalds make and put it toward building a better future for all of New Zealand's young people - use it to fund education, training courses and apprenticeships. Why condemn another generation to a minimum wage subsistence where the only bright thing will be the golden arches on every high street.


For today's posts see: latest posts

Poverty Wages - NZ Workers' Stage Hunger Strike to Protest

From: Unite

"Over twenty professional market researchers will begin a hunger strike at 4pm today that their union says will last for at least twenty-four hours.

Market researchers from the residential team at the east Auckland call centre of the global market research firm Synovate, which has an annual turnover of $720 million have taken the action to protest poverty wages, often as low as $12.50, inadequate breaks and no job security.

The Unite Union which represents the market researchers at Synovate are asking for pay rates that would see full timers get paid $17 an hour and part timers get paid $15 an hour. Current pay rates are as low as $12.50, significantly less than the $21.72 an hour that Synovate researchers earn in Australia as a result of their strong union won agreement. Other improvements the union is asking for include union members being paid for shifts cancelled at short notice, five minutes break for each hour worked and guaranteed hours for long serving staff.

“Worker’s should not be expected to be the eyes and ears of corporate capitalism while working on poverty wages with no job security in a call centre that often has it’s carpet infested by fleas,” said Unite Union organiser Omar Hamed.

“The company seems to want to keep delaying raising our wages. Management has been telling us constantly that we should be tightening our belts. So we decided to take them at their word,” said Synovate call centre worker and union delegate Maria Evaroa.

“A recent survey by Synovate found that internationally New Zealanders are among the least concerned about the global recession. Yet there is a strong sense in Synovate’s own call centre that the company is using the recession as an excuse not to pay living wages.

“Aegis Group which owns Synovate made a £94.4 million profit in 2007. It was call centre workers like us who created that profit yet in the good times we never saw our fair share.

“Negotiating for living wages and good working conditions in the midst of an economic crisis has taught us that multinational corporations will always try and make workers pay for the crises they create,” concluded Maria Evaroa.

Union members will be on hunger strike from 4pm on Wednesday the 25th of February until 4pm on Thursday the 26th of February. A community picket will be held at Synovate’s call centre in Aviemore Drive, Highland Park from 5pm to 5.30pm on Thursday the 26th.

New Zealand's Aging Population and the Great Kiwi Brain Drain

According to data recently released by Statistics New Zealand the number of families is predicted to rise to 1.44 million by 2031, an increase of 269,000 (23 percent) from an estimated 1.17 million families at 30 June 2006.

However, the majority of those families will be' empty nesters', i.e. couples aged 50 and over.

In a report issued in October of last year Statistics NZ projected that the number people aged 65 years and older will exceed 1 million by the late 2020s, which is double the 2006 figure. By that time the numbers of over 65s will be greater than the number of under 15 year olds.

Since the mid 1970s New Zealand has experienced one of the sharpest drops in the OECD in the number of young people within the working population - the fourth largest fall behind Korea, Canada and The Netherlands.

And because aging populations affect ethnic groups in groups in different ways the ethnic composition of the country is expected to change. By the early 2020s the Maori, Pacifica and Asian share of the youth population are projected to rise whilst the numbers of European youth will fall by 10%.

Net migration from New Zealand to Australia is now at a 30 year high, and 1 in 4 New Zealand graduates work abroad.

Prime Minister John Key has acknowledged that the country's Brain Drain is the worst in the developed world. He said:

"the numbers have to be slowed down, especially because young people are fleeing to Australia. He says the worst departure figures since records began are a reflection of our low wage problem."


To address these problems National has proposed a raft of new measures:

"1. Retaining Kiwis & Attracting More Home
Ensure tax, regulatory, and infrastructure policies make returning home attractive for highly skilled expat Kiwis. Require Immigration NZ to initiate a one-stop-shop approach to servicing the needs of returning New Zealanders.
2. Meeting Our Skills Needs
Streamline employer accreditation:
• Streamline proceedures for qualifying employers to be “recognised“ or “accredited” to recruit internationally.
• Make employment performance count more towards the granting of residence.
• Require employers who recruit offshore to provide a bond. Boost monitoring and remove accreditation/recognition from employers if policies are breached.
Better meet demand for seasonal skills:
• Retain the RSE Scheme for Pacific Nations. Make it easier to hire seasonal workers outside the scheme where it is not meeting employer’s needs.
• Introduce temporary work visas for legal visitors who have a guaranteed offer of seasonal work.
Access higher-level skills by introducing a Silver Fern Visa for people with recognised tertiary qualifications.
This visa will enable holders to:
• Undertake temporary work while seeking highlypaid permanent employment.
• Obtain a 24-month work visa once they have gained permanent employment.
• Apply for permanent residence (once on the 24- month work visa) through the Work-to-Residence or Skilled Migrant provisions.
3. Business and Retired Immigrants
• Set realistic requirements for Business Migrants in capital, language skills, and investment proposals.
Focus on job creation and export earnings.
• Establish a Retirement Visa for high net-worth immigrants who indemnify New Zealand from all health, welfare, and superannuation costs.
4. A World-Class Immigration Service
• Review Immigration NZ to ensure there are clear lines of accountability. Ensure fairness and transparency in its processes.
• Explore the establishment of a stand-alone Department of Immigration and Citizenship with no increase in bureaucrats.
• Strengthen settlement services by establishing a robust evaluation process to ensure effectiveness."

It's worrying to see a new Retirement Visa listed there as it will do nothing to address the problem NZ has with its ageing population, it will encourage more people to see New Zealand as a retirement haven.

Neither is there any mention of how National intends to deal with NZ's 'low wage problem.' (The cause of the brain drain according to Key) That is something that is going to be harder to get to grips with as the country's recession deepens.