Hours of work

Jay Jefferies' work history of seven years combined unemployment and underemployment during the...
Jay Jefferies' work history of seven years combined unemployment and underemployment during the past decade is an increasingly common experience among the growing precariat class in New Zealand. Photo: Gregor Richardson.
Below the surface of New Zealand's glowing job growth statistics lies a darker world, writes Bruce Munro.

Jay Jefferies is one of the Government's success stories. He is young, keen, flexible and part of a growing number of New Zealanders in employment.

Born in Christchurch and raised all over the South Island, the articulate, thoughtful 25-year-old moved to Dunedin last year so his partner could study nursing. Mr Jefferies is employed at a fast food restaurant. In that way, he is among those the Government counts a success when it regularly hails improvements in employment statistics.

In June, Paul Goldsmith, the Minister for Tertiary Education, Skills and Employment, was exulting in an 11.8% growth in online job advertisements during the past 12 months.

The previous month, he was pleased to announce 137,000 new jobs had been created during the year to May.

''The Government's comprehensive economic plan is working for families, with lower unemployment, strong job creation and higher wages to help people get ahead,'' Mr Goldsmith enthused.

Mr Jefferies also epitomises the entrepreneurial, can-do attitude the Government lauds as key to the country's brighter future.

For six of the past 10 years, he has been a ''temp worker'', doing a wide variety of different jobs; happy to turn his hand to whatever opportunities came along.

''It was kind of entertaining to not know what you were going to be doing every day,'' he says with a quiet grin.''You get up in the morning and go, `Right, what am I going to do today?' Am I going to wear a hard hat or am I going to stand on the side of the road doing nothing? It gave me a lot of experience.''

Paul Goldsmith, the Minister for Tertiary Education, Skills and Employment.
Paul Goldsmith, the Minister for Tertiary Education, Skills and Employment.
But, talk of ''record labour force participation'' and a ''significant increase'' in jobs is only telling part of the story.

Just below the surface, another darker picture emerges.

It does not take much digging in Statistics New Zealand's latest Household Labour Force Survey to uncover a growing world of low-paid work, insufficient working hours, financial struggles and unfulfilled lives.

Since 2008, when National took the reins, the number of people employed has increased 18.6%, or by 400,000 people. While this sounds a lot, it is actually a little sub-par compared with the percentage increase in the Extended Labour Force (ELF). Not to be confused with Santa's little helper, the ELF is a grouping of all those who are employed, unemployed, or want a job but have given up looking.

Yes, that's right, according to how the Government counts its beans, unemployment figures do not include people who want to work but are not actively looking for work. The latter are euphemistically lumped under the heading ''Potential Labour Force'' along with those ''actively seeking but not currently available, but will be available to work in the next four weeks''.

While the percentage increase in employment and the extended labour force have kept roughly in step with each other there are less positive measures that have been galloping ahead.

Bill Rosenberg is an economist with the New Zealand Council of Trade Unions.  Photo: ODT.
Bill Rosenberg is an economist with the New Zealand Council of Trade Unions. Photo: ODT.
During the past nine years, the percentage increase in unemployment, underemployment and underutilisation has been two to three times higher than the increase in employment.

Let's take those one at a time.

For the whole of New Zealand, over that period, the number of people unemployed has increased 49%.

Then there are the underemployed. Those are the people who are employed  for fewer than 30 hours a week and would like to be working more hours. Their number has increased 61%.

And there are the underutilised. This is the grouping of people who are unemployed, underemployed and in the potential labour force. They have grown by 38%.

Welcome to the precarious proletariat, aka, the precariat; the growing group of second-class citizens who struggle to get a decent job, a decent wage, a decent life.

In New Zealand today, there are 139,000 people unemployed and trying to find work. That includes 5500 unemployed people in Otago. But remember, ''unemployed'' is not the whole picture. There are also 80,000 Kiwis wanting to work but who have given up looking, including 3600 in Otago. On top of that, there are 110,000 individuals in part-time work who need more hours, including 5400 in Otago. There are now 329,000 New Zealanders, including almost 15,000 in Otago, who cannot get any or enough work. That is one person for every eight people in the total work force.

Mr Jefferies is a member of the precariat.

Gerard Hehir is national secretary of Unite Union. Photo: supplied.
Gerard Hehir is national secretary of Unite Union. Photo: supplied.

He has a job, but it is for less than 30 hours a week. And, yes sir, he would like some more, please.

In 2008, at the age of 17, he was flipping burgers in a Christchurch fast food joint. Nine years later, he is doing the same, in Dunedin. In between, he has also done military-style life-skills and employment training, six years of temp work, two years of intermittent unemployment and three years as a storeman with an electronics retail chain. Mr Jefferies left the storeman job to shift south with his partner. After two months searching, the best job he could get was back behind the fast food counter with a promise of no fewer than six hours work a week.

Often, he got 10 hours. On the minimum wage, that didn't even cover the rent for a compact, two-bedroom flat in South Dunedin.

He and his partner only got by thanks to monetary gifts and loans from family.

Three months later, he managed to get work at a different fast food outlet. It is better. He gets 25 hours work a week, sometimes a bit more, and is paid about a $1 an hour above the minimum wage.

After paying tax and rent he has about $60 a week to cover food and everything else apart from electricity. His partner pays the power bill from her student loan.

The couple went on holiday recently; to Timaru, for a couple of days, to celebrate his mother's birthday.

Guy Standing, professor of development studies, University of London. Photo: Stanislas Jourdan.
Guy Standing, professor of development studies, University of London. Photo: Stanislas Jourdan.
When asked how he is going with saving for a deposit for a home, Mr Jefferies gives a shallow laugh.

''We're nowhere near that. We're just trying to survive,'' he says.

That is the typical and lamentable plight of the precariat, says Guy Standing, professor of development studies, University of London.

In 2011, Prof Standing, an economist, coined the term ''precariat'' to describe the phenomenon he was seeing worldwide.

''The precariat tend to move in and out of short-term or part-time jobs, perhaps doing much more 'work' than they are paid to do,'' Prof Standing says.

''But more significantly, they do not have an occupational identity, or sense that they are building a career, going somewhere. Their wages are stagnant and probably volatile and unpredictable.''

It is a situation that angers trade union boss Gerard Hehir.

Mr Hehir is national secretary of Unite Union, which has about 7000 members nationwide, half of whom are fast-food workers.

''For a generation, a huge section of the workforce has not only not had enough paid work, but from week to week they do not know how much work and income they will have,'' he says.

''It has impacted disproportionately on younger, low-paid and Maori and Pasifika workers.

''Lack of work has simply been re-configured and, conveniently for the Government, hidden from most official statistics.''

What particularly angers Mr Hehir is what he perceives to be a deliberate strategy to use insecure work to keep workers compliant and maximise profits.

Workers are not the only ones paying the cost of precarious work and underemployment, he says.

''The wages earned by many precarious workers simply are not enough for them to live. While hardship, debt, charity and support from family are all ways workers survive when work hours are reduced, the taxpayer also picks up a huge bill.

''Family support, part-benefit payments and increasingly rent subsidies result in taxpayers directly subsidising the 'flexibility' that enhances the profits of many businesses. Why should the taxpayer be subsidising low pay and deliberately insecure work?'' he asks.

Mr Goldsmith says it is not the Government's fault and, anyway, things are better now.

Unemployment grew everywhere as a result of the Global Financial Crisis that hit just before National became the Government, he says. But, he adds, both unemployment and underutilisation, as a proportion of the labour force, have fallen since late-2012.

''The economy is now strong,'' Mr Goldsmith says.

''We now have a positive economic forecast, with growth of around 3%, and a strong labour market.''

He is right. If the sums had been done in 2012, the disproportionate increase in unemployment and underutilisation would have been even worse than it is now. But what Mr Goldsmith leaves off the list is underemployment, which has not declined. It has grown from 67,900 people in 2008 to 94,000 people in late-2012 and 109,600 people in March this year.

Asked what role record high numbers of migrants might be playing in increasing unemployment, underemployment and underutilisation in New Zealand, Mr Goldsmith says simply that migrants play an important role in filling skills shortages.

What he does not mention is that in a briefing by Treasury and the Ministry of Business, Innovation and Employment, in 2015, officials warned that migrants were being brought into New Zealand not just to fill genuine skills shortages. The report says migrants are also being used to fill jobs that New Zealanders would do if the wages were not so low and the conditions so poor.

''Filling labour shortages through migrant labour can reduce incentives on firms to employ domestic workers, increase wages to attract domestic workers, and invest in training and/or capital,'' the report states.

When it comes to the impact automation is having, Mr Goldsmith acknowledges that 9% of New Zealand jobs are at ''high risk'' of being taken over by machines.

However, he is confident that new technologies will create new jobs for at least some of the people made redundant. The Government is considering changing the tertiary education system to help people retrain throughout their working lives, he says.

Wellington-based economist for the New Zealand Council of Trade Unions Bill Rosenberg has no doubts the Government could improve the lot of the precariat if it wanted to.

''Unemployment and underemployment in its various forms has recovered much more slowly than it could have if there had been policies that focused on getting decent jobs for people out of work,'' Mr Rosenberg says.

Not only is underemployment increasing, but the length of time people are unemployed is also growing. Compared with 2008, the percentage of those unemployed who remain without work for more than a year has tripled. Now, more than 30% of those looking for work remain ''between jobs'' for more than 52 weeks.

On the underemployment front, Mr Rosenberg says people are being forced off benefits when there are no suitable jobs for them. He points to recent research for the Ministry of Social Development that shows only a third of those who came off welfare benefits during the year to June, 2011, were in employment two years later.

''They find themselves having to take up insecure, part-time or short-term jobs and many end up unemployed again or underemployed.''

Even after the Government has backed away from zero-hour contracts, its employment laws still make it too easy for employers to hire people on low pay and bad conditions, he says, citing a recent OECD report, Back to Work: New Zealand.The report looks at ways to improve unemployed New Zealanders' chances of getting work.

The summary states that ''in New Zealand most displaced workers find a new job again, largely due to a strong economy and a highly flexible labour market''.

''But,'' says the report, ''many of them face large losses in terms of job quality and especially wages.''

New Zealand has the weakest job protection legislation of any OECD country, Mr Rosenberg says.

What is needed is a government focused on reducing unemployment and underemployment, and creating good jobs.

''Major improvement'' is needed to better support people who lose their jobs. It needs to include ''better opportunities and funding of real training, relocation assistance, help with job search and career alternatives, and much better levels of income support when unemployed''.

He is calling for government to proactively identify where jobs will be lost to automation and support the development of new high-value industries that provide good jobs.

Mr Rosenberg says high immigration is playing a role in the predicament of the precariat.

''We should have a goal of full employment in a high-wage, high-skill economy. Temporary migration as a short-term fix for labour shortages in industries that are failing to offer decent work with sufficient rates of pay and conditions to attract workers has no part in this.''

But, he cautions against letting migration deflect attention from the real issue.

''If we had better employment laws, pay, employment conditions, training and industry development policies, and immigration itself were better managed to focus on genuine skill shortages, it would be less of an issue.''

Mr Jefferies seems only partly aware of these deficits.

He views his precarious life as an adventure and celebrates the small victories.

There was the time, for example, when he was given a four-hour temp job but was sent to the wrong location.

''They said the work was actually in Ashburton, not Timaru. But we're still going to pay you for four hours. I was, like, sweet as.''

He has comparatively little experience of full-time work, but does see that it has significant benefits.

''Full-time work was a lot more relaxing. Knowing you have to get up every morning to go to work. You know what your income is. It was a lot more stable.''

Work and Income New Zealand is an organisation he tries to avoid. Dealing with the government agency is too much hassle, he says. So, as often as possible, Mr Jefferies finds other ways to get by, even when things are tough.

The idea that he pays taxes and obeys the law, so the State has an obligation to protect and promote his wellbeing, is alien to his experience and his worldview.

Mr Jefferies is a success because he is a survivor. He is a member of the precariat;  one of hundreds of thousands of New Zealanders  living on an economic knife-edge,  who have been doing so for so long  they think it is normal.

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