Meeting the jobless challenge

Unemployment is down but there is a hard core of long-term jobless, writes CATHERINE MASTERS.

Unemployment is at its lowest for 13 years, surely a reason to celebrate.

But there are still about 100,000 unemployed - and 30,500, almost enough to fill a small city, are characterised as long-term unemployed.

Of these, about 8300 have been out of work for two years or more.

A careful look at the statistics shows that, for the people at the bottom of the economic heap, things have got worse in the past 10 years.

What sort of problem are we talking about?

The thousands who find it almost impossible to get back into the workforce are not collected in any one spot. They may include your next-door neighbour, or someone in a remote part of the country.

Some lack reading, writing and maths skills and have probably given up hope of a decent job that pays enough to get ahead.

People who work with them say some are probably happy enough. But for others, it is a soul-destroying existence.

Most of the people with real problems are in the older age group, often victims of Government service or company restructuring. Or people whose jobs died when industries like many freezing works or clothing factories closed.

They lag behind in the skills needed to cope with rapid advances in technology.

The Government acknowledges that for this group the situation is serious.

There is an argument from some quarters that unemployment kills, because it can produce an associated downward spiral of health and psychological effects.

The long-term unemployed survive on the dole and other benefits in a world where getting a part-time job sees their weekly benefit drop in proportion. So what is the point of even bothering, ask social commentators and economists

What are the unemployment figures?

Mostly (going by the figures in the Household Labour Force Survey for the March 2001 quarter) the outlook is rosy enough. Unemployment has fallen to 5.4 per cent, the lowest for 13 years.

However, that masks the fact that the fall is not due to an actual increase in the number of people employed. That has stayed the same at 1,084,000.

Instead it is because the labour force is shrinking with the number of working-age people declining.

Those labelled the short-term unemployed (26 weeks or less) now number 64,400, a drop of 8900 since March 2000.

The long-term unemployed are broken down into different categories:

* Those unemployed for more than 26 weeks, but not over a year, numbered 13,500 for the March 2001 quarter, down from 17,400 for the March 2000 quarter.

* The number unemployed for over a year, but not two years, totals 8700, down from 11,700.

* The number out of work for two years or more comes to 8300, down from 10,000.

So the total in all the categories of long-term unemployed is 30,500, well down on 39,100 for March 2000.

That looks like a healthy drop in long-term unemployment. Where's the problem?

Well, it is largely good news.

But BNZ chief economist Tony Alexander says it is not as rosy for this group if you delve a bit farther back in time.

Going back to when there was a similar low in the overall unemployment rate, you come to the June quarter of 1988, when the figure was 5.2 per cent.

But in that June quarter the percentage of people unemployed for a year or more was 13.6 per cent of all unemployed - now it is 17.9 per cent.

So, despite an improvement in the past year or two, there has been a definite worsening since the last time the unemployment rate was roughly as low as it is now.

"There's a hard core who just don't have the skills, I guess, that businesses are looking for, and that has been the issue for a while. But maybe now people will be more aware of it," says Mr Alexander.

Those at the frontline, such as Rangi McLean from the Manukau People's Centre, say their perception is that life has got tougher for this group.

Can you trust the figures?

They are confusing because of all the different categories and because of the way definitions of employment are worked out, says Auckland University economist Susan St John.

The definition of employment includes those who are working one or more hours for pay. So you can be labelled employed, as well as being on a benefit with a small part-time job.

That is ridiculous, she says.

Who are the long-term unemployed and where do they live?

They may live in the big cities or be part of out-of-the-way communities from the Hokianga and East Cape to parts of the Waikato and Invercargill.

Statistics from the Department of Work and Income show there are more men than women unemployed for a year or more.

Their home areas are listed under broad categories such as Auckland Central, Auckland North, Auckland South, Bay of Plenty, Canterbury, Central, East Coast, Nelson, Northland, Southern, Taranaki, Waikato and Wellington.

Most of those out of a job for a year or more fall into the 30-to-49 age group.

The department says policy and operational changes in the past two years have affected the jobseeker register. These include the extension of work test requirements to a wider range of beneficiaries, who were obliged to enrol for the tests.

For example, in 1997 people on the domestic purposes benefit whose youngest child was 14 or over were required to seek part-time work. These policies are said to have contributed significantly to an increase in people registered as seeking work.

Why can't they get jobs?

Many people are trapped in a cycle of despair. Some live in areas where there are no longer jobs they can do.

Rangi McLean, from the Manukau People's Centre, says underlying issues holding people back include education, health and housing. All need addressing.

There are employers who want to hire these people. But the technological age requires new skills and courses do not always teach the skills needed.

So some of these people struggling for employment end up in very unskilled jobs as cleaners and nightshift workers. These jobs are not family friendly, and Mr McLean says they can pay less than a benefit.

Stories of generations of children growing up in households where the only income is a benefit are true, he says.

"In some cases here there are two and three generations of families that are still in that cycle."

How have policies of the past decade affected them? During the 1980s there was considerable dislocation of people, says Peter Conway, economist with the Council of Trade Unions (CTU).

There were major reductions in the tariffs which protected some industries and significant restructuring of the state services, such as the railways and forestry.

Rapid change in jobs is another factor. Mr Conway calls it a high "churn" where as old jobs disappear new ones are created. It means workers must be more adaptable and some, especially older ones, are not.

Another handicap is abatement levels on benefits. This means, for example, that if you are on a main benefit such as the dole and you get part-time work, your benefit drops by 70c for every dollar earned.

If you are on the accommodation supplement, it decreases dollar for dollar. Then there is tax on top of that.

So people end up in a situation where it is not worth taking on extra work because they risk losing their benefits.

What needs to be done?

Some employers and tutors complain that people coming into industry training programmes lack even foundation skills such as reading, writing and maths.

The CTU has called for dedicated funding to coordinate numeracy and literacy programmes so they can catch up.

"It is a real worry that there are people out there who just get into that cycle of despair, lacking in confidence, not feeling adequate to be able to do things," says Mr Conway.

"And also real economic problems of the cost of training. So it is easier to stay on a benefit."

Are there job schemes and policies which are helping?

Rangi McLean says there are not many schemes which actually hit the mark. The long-term unemployed can take several years, for example, to learn the skills to enter the computer world - but by then technology has marched on by three years.

The CTU credits the Government for attempting to redress some of these issues.

A tax review will look at addressing abatement levels, for example. The stand-down period before benefits are available has already been shortened to 13 weeks, but Work and Income staff have some discretion. Even so, the CTU had hoped for four weeks.

The Employment Relations Act has attempted to give better bargaining power to people, and the Government is looking at the situation of job insecurity when there is contracting out of work by employers.

Economic development and modern apprenticeship schemes have also done their bit to reduce unemployment.

Even so, just because overall unemployment is down to 5.4 per cent, it is not acceptable that there are still more than 100,000 unemployed, says Mr Conway. But at least there is better awareness of the very real social costs of this - the impact on communities and families.

What does the Government say?

The Government wants a focus on the long-term unemployed.

Employment Minister Steve Maharey says it takes a long time to become one of the long-term unemployed - and it takes a long time to fix it.

He says unemployment peaked in the early 1990s. A great deal of that was structural, associated with changes in the economy and industries going out of existence. That resulted in people becoming locked into unemployment.

"You lose your connection with the labour market, you have an erosion of skills."

There is also a proven link between unemployment and ill-health, including psychological problems. So expect people who are unemployed for a protracted period to become unwell.

That further disconnects people from the labour market. Put bluntly, unemployment kills.

Mr Maharey views the unemployment figures as a bit like: is the glass half empty or half full?

Given that the unemployment rate was on the way up in mid-1988 and is on the way down now, he says it is to be expected that the percentage of long-term unemployed would be less in 1988 than it is now.

So what is the Government doing?

The Department of Work and Income has been told to concentrate on the long-term unemployed. That means intensive case management, focusing on fundamentals like reading, writing and maths.

One-to-one mentoring is also necessary in some cases - "Where somebody calls the person in the morning and says, 'Right, remember, you're going to work today," says Mr Maharey.

Schemes are also in place where employers work with the department, helping people to be resocialised, or rehabilitated, back into the workplace.

Modern apprenticeship schemes are aimed at the younger unemployed. But other Government agencies are encouraging older long-termers into retraining. There are partnerships with iwi, Pacific providers and employers linking in with economic development.

An announcement is due shortly in the East Cape, for example, in the wood- processing and forestry industry to match the unemployed there with an industry that needs labour.

Few dealing with long-term unemployed doubt the difficulties. Or the payoff from giving people new hope - and getting them off the benefit.

Features:

* The jobs challenge

* Common core values

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