KEY POINTS:
Today's "jobs summit" is not a crisis meeting; it is a pre-emptive response to the risk of unemployment. Participants need to remember that. Serious unemployment in New Zealand remains a prediction, not a fact, and the predictions vary. They do not warrant panic measures or proposals that would put the economy out of kilter for a long time after the world's financial system has been repaired.
The number in jobs in the economy actually rose in the latest surveyed period, the last three months of 2008, although the total hours worked declined. The figures suggest more people are working while they can and that some employers must be holding on to staff when there is not as much work for them to do. It is anyone's guess how long that can continue.
A survey conducted for the summit by the corporate lobby group Business NZ finds that one employer in three are expecting to lay people off or reduce their hours. But, equally, it reports one in three of the 647 firms surveyed say they are still short of skilled workers.
Essentially, the summit should be a brainstorming exercise about how business large and small can ride out the recession without shedding staff that it will need when demand recovers, and how labour unions can help jobs remain secure by increasing labour productivity, and how the Government might legislate to lower employment costs and ensure people can be given new training and skills quickly.
Business NZ will argue today for a subsidy for apprentices attending courses at polytechnics and suggest that 10 per cent of new funding for infrastructure be used for on-site training. It will probably be supported by the industry training organisations' large representation, which advocate a $50 million fund for wage subsidies or bonuses for completed apprenticeships.
The Government should listen more favourably to on-site training proposals than those involving tertiary education. One of the unspoken trends of the past 20 years has been the institutionalisation of training. Every course takes several years and, in many cases, the knowledge could be acquired in a fraction of the time.
The hardest task in a conference such as today's is to keep the focus on the subject. Every second speaker will probably try to broaden the discussion by invoking self-evident truths that jobs require the survival of business and business depends on policies governing the economy. But they have not been invited to the jobs summit to put in bids for corporate welfare or to change the thrust of economic policy.
Suggestions such as the NZ Institute's, that the Government set up a fund as a backstop bank for business, are premature. There is no evidence that banks here are going to cut off operating credit for their customers or call in their loans.
Today's discussion needs to be mindful that the global crisis will change this economy like others. Those with high current account deficits, like ours, have already seen a drastic fall in their exchange rates. The financial system will probably settle at a better balance between creditor and debtor countries, leaving our dollar at current levels. That means labour and capital will be drawn away from domestic services and into exportable products, including tourism.
Suggestions at the jobs summit need to assist this change not ignore or, worse, try to resist it. The labour market is never static, some jobs should not be preserved.
The challenge today is to distinguish between the jobs that will not return and those that will be needed when financial transmission is restored, hungry markets recover and opportunities abound.
