Where are the jobs?

Last week I did a guest stint on the Radio New Zealand Jim Mora panel with Findlay McDonald and Gary McCormick. They were both objecting to the DPB reforms on the basis of, where are the jobs? I made comments along the following lines (without the pictures!)

When the demographic change New Zealand is facing is taken into account, it is clear that labour force is going to shrink in relation to the non-labour force. 

The graph below shows that the ratio of the combined 0-14 and 65+ populations is going to grow from around 0.5/1 today to 0.7/1 over the next twenty years. The demand for goods and services continues from the non-working population thus increasing demand on the working-age population. Hence it is so important for the government to set in place the legislation that requires beneficiaries to work when jobs are available.

Source: Facing Fiscal Futures
(http://www.treasury.govt.nz/publications/media-speeches/speeches/fiscalfutures)

Although it has grown, New Zealand still has one of the lowest rates of single parent employment in the OECD. This is, at least in part, a reflection of New Zealand’s historically
open-ended and relatively generous DPB.

Sole parent employment rates across the OECD, around 2007

Source: OECD family database (www.oecd.org/els/social/family/database)

So there is ample evidence jobs will be there, particularly in the care and health sectors, and ample economic imperative for more sole mothers to participate in the workforce.

However, to my mind, an even more important aspect of increasing their participation is the positive benefit for their children. Breaking the inter-generational cycle of welfare dependence won’t happen until children live with at least one working parent who is building their own expectations of a similar life.