Why some people can't get jobs

 According to Stuff:

"Some employers say they are dealing with dozens of applicants unpresentable and unfit for work and they fear it's only going to get worse as the next wave of benefit reforms starts to settle in and more beneficiaries are forced to actively look for work...despite the many jobless, employers say continual absenteeism, substance abuse and poor work ethic appear to be making a lot of them unemployable."

Employers occasionally speak out about their difficulty in getting good people. It's more often a lament heard on talkback radio than read in print but the stories aren't uncommon. I don't doubt their veracity and they make me angry, despairing and worried.

These 'inadequates' to put it politely will doubtless be passing on their own attitudes and impaired intelligences to their children. I fear that cutting off their benefit incomes won't motivate them positively. It'll just turn them into more resentful, more bitter and more desperate characters.

That is not to say it shouldn't happen.  A line has to be drawn. Society has to concede that some people have been helped as much as possible. Their education, their health, housing and income needs have all been met by the state to no avail. In fact, to their detriment.

The "next wave of benefit reforms" will begin to pull back the carpet under which we have swept this problem for too long.

One in five babies welfare dependent by year-end

Media Release

ONE IN FIVE BABIES BORN 2012 ON WELFARE BY YEAR-END

Thursday, March 21, 2013

Data released under the Official Information Act shows that 21.2 percent of babies born in 2012  were dependent on a caregiver receiving a welfare benefit by the end of the same year.

Welfare commentator Lindsay Mitchell said that, "Over one in five babies reliant on welfare by year-end is a sobering and sad statistic. But it's worse for Maori at over 1 in 3 or 35.9 percent."

"There is now an established pattern of childbearing involving birth onto an existing benefit or recourse to welfare soon after.  This occurs during good and bad economic periods. For instance, in 2007, when New Zealand briefly experienced the lowest unemployment rate in the OECD, the percentage only reduced to 19.1%"

"In general, the younger that children go on welfare, the longer they will stay in the benefit system. This leads to chronic child poverty and the many associated risks."

"Current and forthcoming welfare reforms are aimed at reducing this incidence but the answer remains largely with young females who need to be persuaded to gain educational qualifications, work skills and a committed partner before embarking on motherhood. "

(Talking to Larry Williams on NewstalkZB about this issue)

Paula outbats Jacinda again

An exchange in parliament today:

Jacinda Ardern: Should a sole parent be able to study to become a nurse or a social worker while on the DPB or in her new categories of sole parent support or job seeker; if not, why not?
Hon PAULA BENNETT: It will depend on how that fits with their work-test obligations, so that will depend on the age of the youngest child. If they are aged under 5 years old, there will be absolutely no trouble in the parent studying full time. If they are aged over 5, there may be some part-time work obligations alongside of them, and the parent can still study if they are doing those.
Jacinda Ardern: No, they can’t.
Hon PAULA BENNETT: Yes, they can. They can perfectly well study and work 15 hours a week. In fact, most of us over this side did that. I know that the member would not be able to associate with that, but that is actually true. Parents can study part-time or full-time and also meet their part-time work-test obligations, which I think are entirely fair.

Truth Column March 14 -20

 My Truth column March 14 - 20

It was embarrassing listening to a woman bleating about the status of New Zealand females, their lack of representation on boards and experience of pay discrimination.  On International Women’s Day, March 8, 2013, I could find far, far more to celebrate than bitch about.

 More

The starting out wage

The government wants to introduce (or re-introduce) a minimum youth rate and call it a Starting Out rate. It'll be $11 per hour.

Their professed aim is to get youth into employment.

My problem is this. Will more jobs be created because the price of labour is lowered, when job subsidies already exist and we still have high youth unemployment? An employer can already hire a young person at less than the minimum wage if he receives a Work and Income subsidy.

While NZ is still feeling the effects of the GFC will the difference between $13.75 and $11 create more jobs or simply represent a loss to the worker and a gain to the employer? In a growing economy I'm sure the optimum would be realised - more jobs. But currently, I don't know.

I support the move but with reservations about it being the silver bullet for reducing youth unemployment.

Council rate increases

Local government finance and policy analyst Larry Mitchell has a short piece in The Truth about council rate increases:

New Zealand Councils, particularly in this election year, make great PR play by citing their proposed current year’s percentage rate increases, more so if an increase is considered modest.
Public interest is drawn to such statements. The problem with council rate increase announcements is that they need not be correct. In fact many are downright misleading and here’s why.

Right on cue here comes my council, Hutt City:

Hutt City Council is proposing an average annual rate rise of less than one per cent in its annual plan for 2013-2014, says Lower Hutt Mayor Ray Wallace.
Mayor Wallace says councillors have proposed increasing rates revenue by an average of 0.9 per cent reflecting the strong financial management of the Hutt City Council’s finances.

Strong financial management? With operating expenditure of around $126 million and debt of $67 million and a deficit for the past two years?

Larry also produces a League Table for the 67 local authorities in NZ. It measures economic sustainability and affordability. Hutt City rates 43rd. For financial performance it rates 'fair'. A few councils achieve a 'good' or even 'very good'.

He writes about the reasons for council indebtedness:

The “it’s not our money” coupled to “castle-building” attitudes of elected members. We have elected many Councillors over the last ten or so years whose debt-fuelled adventures with our money have lead to Council debt levels and gold plated community infrastructure without consideration of their basic affordability to ratepayers and their effect upon ongoing financial sustainability. Large stadia (Dunedin) expensive Council organisations with expensive tastes (with Auckland Council leading the way) and bloated payrolls have unfortunately become the norm. Audit meantime has stood idly by without exercising their wider mandate powers to ensure that public monies are not wasted. Elected members have failed to adequately set and supervise affordable policies that match the incomes and demographics of their ratepayer-electors....

And finally, the role played by the beauracrats. There are some very good people out their working for Councils. But far too many, starting at the top and with CEO leadership missing in action who have paid little heed to matters such as cost containment . They continue to project expenditure/rates increases that pay little heed to the realities of a persistent recession. Enough has been written already of inflated senior staff salaries. I would just add this. Within the relatively stable, secure, mostly risk free circumstances of their employment Council employee terms of engagement do not justify the present private sector competitive rates of payment.

And the following (included in the League Table report) referring to any effect of the GFC, is an article published in Local Government Magazine Feb 2011:

Mr Mitchell says longer term recovery strategies will be needed by 2012 or earlier. Financial plans must now

confront the budget realities of affordability and ‘cut the cloth’.

“These steps should be followed by meaningful and ongoing audit and performance assurance, coupled with

independent advice on the matters. Elected members must avoid ‘staff capture’ by insisting upon provision 

of independent advice covering a range of well understood and fully cost/benefited options.”

Mr Mitchell says he doesn’t accept that councils’ financial problems are principally due to the recession 

which has gripped New Zealand since the international banking crisis hit.“No, I don’t think so. This situation, 

let’s call it a crisis, for that it may well be, has been a long time in the making.

“A major reason that springs immediately to mind is a perverse and unforeseen consequence of the 2002 Act.

This legislation that promised so much has put councils into something of an inflexible and unresponsive

medium term (three to ten-year) straitjacket. It is called the Long Term Council Community Plan. While this

plan is regularly reviewed, it tends to build a model that has in its effect constrained councils’ ability to

readily react to the external financial-economic environment. And this is particularly so of course, when a

recession hits as quickly as this one has.“If you go back to the 2006 and earlier plans, all o

f their projections were for steady increases, as if there was no tomorrow, including − and this is the killer −

the failure to control maximum prudent-affordable-sustainable debt levels. The interest only content of an average residential rates bill for highly indebted councils is alreadyover 25 per cent of its total; a bit like some heavily mortgaged homeowners really to put this into some context."

He believes that current financial difficulties have been exacerbated by the effects of the

short term changesbrought about by a three-year election cycle, coupled with the hands-

off compliance and procedural nature of audits of the LTCCPs.

The LTCCP unfortunately has become a more prescriptive document than is desirable, he says.

“It tends not to stress the importance of affordability and sustainability issues; it pays only passing regard for

the need to adopt accountable economic and financial performance measurement and to cap that lot off its

legislative structure limits the flexibility of councils to make changes even when they see the tsunami coming.

“I believe councils tend to get locked into their plans. If it was a private-sector company, it could react within

a month or at most within a quarter. Given council inertia linked to their legislative and operational

environment it’s like turning around the Titanic.

“Councils are going to have to get pretty active in the next 12 to 24 months because they won’t have many

easy options left. And now they just have! to take the correct actions.”

Sudden Unexpected Death in Infancy Syndrome - ethnicity

The really good news is the general SUDI rate is trending down - significantly. But:

"We were especially concerned to see that the rate of death in Maori and Pacific infants is significantly higher than for European infants,'' Dr Baker said.
"We're not sure exactly why this is, although differences in the rate of smoking during pregnancy may be a factor. We know that infants exposed to cigarette smoke in pregnancy tend to be smaller and are more prone to suffocation.''

A summary of the first results from Growing Up In NZ, a birth cohort study, found:

* More than one in 10 mothers continued to smoke through their pregnancies (with an over-representation of those identifying as Maori and living in the most deprived areas.)

Again (and I could write a paper on this subject) conflating Maori and Pacific isn't helpful.

Over 2003 to 2007 there were 202 SUDI deaths for Maori babies; 42 for Pacific; 4 for Asian and 80 for 'other'. The rate (per relevant population) for Pacific is well under Maori although higher than 'other'.

Any report that differentiates between 'Maori and Pacific' and 'other'  should  go  further and highlight the difference between Maori and Pacific. That story also holds important clues.

Cyprus

“Any government big enough to give you everything you want is big enough to take away everything you have."

(source disputed)

Some more up-to-date quotes about the situation via Robert Tracinski:

Thomas Pascoe explains why this is such an alarming precedent.

"The principle that there is no division between your private property and communal property which may be appropriated by the government whenever it sees fit is an outrageous one in any system other than Communism. The idea that a government which has chronically misspent may order the banks to close and deduct a sum of its choosing from a person's balance before allowing it to re-open is beyond parody. "In the name of saving the state, central banks throughout the West have been conducting inflationary policies which act as a tax on savings. At least that is subtle. Now, in order to mitigate the excesses of the rash, both private borrowers and the government, savers are being taxed directly.
"The establishment of the principle that a government can, and at times of economic strain must, help itself to your savings, and that this is a legitimate tool of statecraft, ought to provoke riots."

Megan McArdle explains why European finance ministers thought they could get away with raiding accounts in Cyprus: it has become a haven for tax-dodging Russian oligarchs. The problem is the question everyone is asking themselves right now: where will this be tried next?

"If Cyprus had done this on its own, the country would be in trouble, but the rest of the world would just emit a bemused sigh and move on. Now, however, this plan has the imprimatur of the EU stamped on it—and so people are going to be looking hard at other European banking systems. Which other nations' depositors might have to take a similar haircut in the future? "Hopefully, savers will view Cyprus as an extreme one-off: a tiny nation whose banking system was unsustainably oversized for its economy, and whose substantial depositor base of kleptocratic foreigners made it uniquely difficult to deliver government support.
"The problem is, Europe seems to be chock full of unique, one time problems with its banking system. There's a real risk that investors will decide that they'd rather not stick around to see what one-of-a-kind, custom-crafted solution the European ministers come up with next."