Background papers for the 1999 Manawatu Employment Summit

The Local Employment Co-ordination initiative was created as a part of the government response to the recommendations of the Employment Task Force. The Department of Labour established a network of Local Employment Co-ordination groups nation-wide, with the aim of providing a comprehensive national approach to meeting the needs of the unemployed, through the recognition of local diversity and the value of local solutions to local problems. An important underlying aim is to help focus resources on those who are most disadvantaged in the labour market.

The Palmerston North group brings together relevant employment focused government agencies, business communities and community representatives. In Palmerston North these groups include: Palmerston North City Council; Queen Elizabeth College; Workbridge; New Zealand Employment Service; local Iwi; Education Training and Support Agency; Business Development Board; Manawatu Employment Action Group; Phoenix Supported Employment Services; Mature Employment Support Agency; Department of Internal Affairs; Community Services Council; Income Support Service; Careers Service Rapuora; Te Puni Kokiri; Community Employment Group; Manawatu Polytechnic; Employers and Manufacturers Association; Inland Revenue Department; New Zealand Builders Trade Union; Palmerston North Enterprise Board; Mobile Employment and Business Facilitator.

The purpose of this profile is to provide background information to assist in the development of strategies to enhance employment opportunities in Palmerston North City and the surrounding Manawatu rural area. The immediate purpose is to inform the planning activities of the Palmerston North Local Employment Co-ordination (LEC) group on 24 August 1998. The plans and recommendations reached on 24 August will be added to the report before it is submitted to the Regional Commissioner. There will therefore be opportunity to incorporate comments you may have on both the accuracy and completeness of the information in this report.
 

This report has been prepared with the assistance of members of the Palmerston North Local Employment Co-ordination Group, with particular assistance from Dan Forsman (ETSA), Andrew Boyle (PNCC), and Fong Mee Chin (PNCC).

The key sources of information in the report are:

• 1997 Manawatu-Palmerston North Employment Profile;
• the quarterly economic reports prepared by Fong Mee Chin of the Palmerston North City Council;
• regional economic reviews prepared by Dan Forsman of the Education Training and Support Agency;
• the BERL regional economic profiles and forecasts; and
• the Local Employment Co-ordination employment profile of Auckland City.

As it is a discussion document, there is scope to amend the content of this report.
 

Recent economic performance has varied within the Palmerston North and Manawatu area from district to district. In general the City has fared better than the rural districts.

Despite a difficult business environment, year-on-year economic growth has been on the rise, reaching 1.1%pa in March 1998.

Palmerston North did not experience dramatic job losses in the late 1980s, but had static employment from 1987 to 1993 (when employment fell nationally) and slower growth thereafter.

Manawatu (including Horowhenua and Tararua Districts) employment fell more rapidly than national trends after 1989, and from 1993 continued to fall in contrast to growing employment in New Zealand as a whole.

Unemployment is rising in our region and job vacancies are declining. Unemployment for the last quarter in this region has jumped sharply to 7.6%, the highest since December 1995. For the first time since September 1996 we are above the national average. Many employers are laying off staff.

Employment in Palmerston North City is forecast to grow by 1.0%pa between 1997 and 2002 (5.1% in total).

Lower employment growth of 0.7%pa between 1997 and 2002 (3.6% in total) is forecast for the Manawatu (including Horowhenua and Tararua). There are limited employment opportunities, particularly in the smaller rural centres of the Manawatu.

The style of employment is moving away from permanent full-time to one of casual, on call, part-time and flexible employment relationships. In Palmerston North the tertiary student population is a major component of the workforce for this part of the job market.

Job opportunities for those with limited qualifications, particularly if they are long term registered job seekers, are more difficult.

Training can be worthwhile. But there are questions over whether training actually creates many additional jobs.

Stepping stone jobs are required for many unemployed workers.

Our challenge as individuals and as representatives of agencies involved in the issue of local employment is to continue to refine the strategies that are currently being implemented to enhance the opportunity for local employment growth.
 

The employment profile will cover both Palmerston North City and the Manawatu District as the economic performance and employment prospects of each area are closely inter-linked. It incorporates recent information and comment on employment outcomes and future prospects for Palmerston North City and the surrounding Manawatu rural district.

The profile draws on several data sets. One of these is BERL's regional economic profiles which have been prepared covering 1) Palmerston North City and 2) the Manawatu (excluding Palmerston North City). BERL's definition of the Manawatu region includes the Manawatu, Horowhenua and Tararua Territorial Local Authority areas. Care, therefore, needs to be exercised when interpreting the BERL Manawatu regional statistics as this report is primarily concerned with the Manawatu Territorial Local Authority area.
 

Palmerston North City is a national education and research centre situated in the Manawatu District. It is also a national distribution centre and regional service centre for the central and lower North Island. The Manawatu covers 2,780 square kilometres and is the area bounded by two rivers (the Rangitikei in the North and the Manawatu in the south), the Ruahine Ranges to the east and the Tasman Sea to the west.

The education, research, and knowledge sector is a key strategic industry base for Palmerston North City. Tertiary educational institutions in the city include Massey University, Manawatu Polytechnic and the International Pacific College. Key research organisations include Horticultural Research, NZ Dairy Research Institute, Agricultural Research Institute, Agricultural Research Grassland and Landcare Research. The research and tertiary education institutions attract external income, which is spent locally and supports the large service sector. Massey rolls were holding up for 1998 but student numbers had not increased for three years. Polytechnic enrolments continue to grow as the inner-city campus development proceeds. Private Training Enterprises, such as the College of Modern Hairdressing and the School of Design, are also beginning to play an important role in the educational infrastructure within the city.

The defence sector, with the Linton Army Camp and the Ohakea Airbase, has become an increasingly prominent part of the local industry infrastructure. They are a direct source of external income into the region. There are also secondary economic and employment outcomes through the involvement of local business as local firms have the opportunity to perform a supply and support function for the defence industry.

Food industries, with large companies such as Watties and Sanitarium, have had a historical presence in the city and region. While the presence of Watties (now Heinz-Wattie Australasia) and Sanitarium is now somewhat more tenuous, the confluence of research institutes and the presence of new players, such as Ernest Adams represents the ongoing place of a food industry in the local economy.

The City enjoys a strategically advantageous location that allows it to perform an important distribution function for the central and lower half of the North Island.

In the smaller towns of the Manawatu District, primary production (farming) supports a number of large secondary industries, including beef and venison abattoirs, wool spinning, food manufacturing, grain storage, engineering works, timber and building supplies and other manufacturing. Smaller scale cottage industries and crafts also make an important contribution to the Manawatu District economy.
 

Recent economic performance has varied within the Palmerston North and Manawatu area. In general the City has fared better than the rural districts. The towns of the Manawatu District, the largest of which is Feilding, have experienced declining employment opportunities. Agricultural employment opportunities in smaller rural villages have been reduced by the amalgamation of farms and by agricultural mechanisation. Despite fewer employment opportunities, the population of these smaller rural towns has been increasing as people without jobs move to areas with cheaper housing.

Important recent business retractions that have occurred in the Palmerston North City and the Manawatu District include:

• the Enerco Gas restructuring
• the Tui - Kiwi amalgamation
• the Electropower/Centralpower merger
• the Glaxo closure
• the Santiarium closure (although it has re-opened with a smaller production line)
• the Carter Holt Carton closure in Palmerston North
• the Hester Guy Foods closure
• the Allflex downsizing
• the Manawatu Standard staff cutbacks

Uncertainty exists about the future employment security of:

• Palmerston North based Telecom operators as Telecom sells off this service
• Inland Revenue Department staff with cutbacks projected

The National Bank "Regional Trends" June 1998 survey suggests that the Manawatu-Wanganui regional economy (that area covered by the Manawatu-Wanganui Regional Council boundary - see map) is recovering only slowly, if at all, from years of high job losses and a difficult farming sector. The area includes the depressed Ruapehu District as well as the poorly performing Wanganui District. Industry closures, though, have occurred across the region and in urban areas. However, it would be fair to say that Palmerston North (because of the education and public sector activity) has had a degree of insulation from significant economic decline, although the threats of corporate closures continue.
 

The National Bank regional trends survey reports that economic activity in the Manawatu-Wanganui region was down in March. House and farm sales were down, retail trade declined, and the region's unemployment rate rose to a three year high. Despite these declines, year-on-year economic growth has been on the rise, reaching 1.1% in March (National Bank 1998). On an annual basis, commercial construction and new motor vehicle registrations were the only regional economic indicators to surpass the national average.
 

Palmerston North had the same level of employment growth as New Zealand over the decade to 1997 (BERL 1998:91).

Palmerston North did not experience dramatic job losses in the late 1980s, but had static employment from 1987 to 1993 (when employment fell nationally) and slower growth thereafter. The expansion of the Linton Army Camp and growth in tertiary student numbers through these years can in large part explain the sustained employment levels in Palmerston North.

Employment growth from 1992 to 1997 for Palmerston North was 2.6%pa, while national employment grew at a rate of 4.0% for the same period.

BERL reports that Manawatu's (including Horowhenua and Tararua Districts) employment fell more rapidly than national trends after 1989, and from 1993 continued to fall in contrast to growing employment in New Zealand as a whole.

From 1993 to 1997 Manawatu employment has decreased at a rate of 1.6%pa, while national employment grew at a rate of 4.0%pa for the same period (BERL 1998:98).

Manawatu employment in 1997 was more than 20% below what it was a decade earlier.

How can the steady decline in employment in the Manawatu, as reported by BERL, be explained?

First, as already noted, the BERL figures include the Horowhenua and Tararua districts, and these regional economies have experienced serious decline. For example, the textile industry in the Horowhenua has been adversely affected by tariff reductions and the merger of the Tui Dairy Co-operative with the Kiwi in Taranaki resulted in the downscaling of operations at Tui's Pahiatua dairy factory.

The closure of a number of large manufacturing firms through the Manawatu District, though, has contributed to declining employment. These include Sanitarium, the Feilding Freezing Works, Longburn Freezing Works, and Tui's Longburn Dairy Factory.

The City and the District continue to face the threat of business closure or retraction as large companies make decisions to pursue greater efficiency and competitiveness by closing provincial branches and relocating to larger markets. The attraction of the large consumer population and labour market in the Auckland area is very compelling for many businesses. A local spokesperson for Carter Holt Harvey, when announcing the closure of the Carter Holt Harvey carton printing plant in Palmerston North commented, "I feel sorry for provincial New Zealand, but industry is now consolidating around Auckland (and Christchurch). We run in a very competitive open economy today. It is our intention to survive" (Dominion 18/2/98).

Within the context of an increasingly difficult business environment there has been declining funding and support for the promotion of regional economies from central government. Palmerston North City and the Manawatu District, for example, have lost the services of the Business Grow programme. The Business Development Board has been hindered by weak political support and limited funding.

The rural downturn continues to be an important contributor to declining employment in the Manawatu. It is also likely that a greater proportion of Manawatu District residents now commute into Palmerston North City for employment as jobs have disappeared in the rural towns.
 

TRENDS IN ECONOMIC OUTPUT AND EMPLOYMENT GROWTH

According to the BERL (1998:95) study, while manufacturing output in Palmerston North City has increased by 0.5% from 1992 to 1997, employment in manufacturing decreased by 0.3%pa.

The only manufacturing industries with employment growth were fabricated metals and other manufacturing.

BERL (1998:95) forecast an ongoing decrease in employment in manufacturing by 0.2%pa between 1997 and 2002, a slightly larger fall than the national average of 0.1%pa.
 

Service sector output in Palmerston North grew at 3.1%pa between 1992 and 1997, and service sector employment also grew at 3.1%pa (BERL 1998:96).

Communications output grew at 7.0%pa, but employment in communications decreased by 0.3%pa (BERL 1998:96).

Employment growth in services is forecast to be 1.1%pa between 1997 and 2002, with the greater growth in the largest service industries, public services and trade (BERL 1998:96).
 

Primary sector output in the Manawatu (including Horowhenua and Tararua) did increase by 0.3%pa between 1992 and 1997, but primary sector employment decreased by 4.9%pa. Large falls in agricultural employment contributed to much of the region's job loss (BERL 1998:101).
 

Manufacturing output in the Manawatu (including Horowhenua and Tararua) increased by 3.0%pa from 1992 to 1997, while employment increased only by 1.4%. Industries showing rapid growth in output and employment were chemicals and non metallic minerals, but negative growth is predicted for the 1997-2002 period (BERL 1998:102).
 

Service sector output in the Manawatu (including Horowhenua and Tararua) grew at 0.4%pa between 1992 and 1997, and service sector employment grew by 0.3%pa. Communications output grew by 6.5%pa, but its employment fell by 0.7%pa (BERL 1998:103).
 

Total population for Palmerston North City and the Manawatu District (excluding Horowhenua and Tararua) in the 1996 census was 101,178 (Palmerston North City Council 1998).

The Palmerston North resident population in 1996 was 73,095 (Palmerston North City Council February Economic Report 1998:7).

The Palmerston North City population is expected to increase by 14.6% from 1996 to 2021 compared to a national average increase of 17.2 % over that period.

Compared with New Zealand, Palmerston North City has a greater proportion of people in the 15-24 age group, a result of the number of tertiary students in the city.

The proportions of people in all other age groups is, correspondingly lower than for the country as a whole.

The population of Palmerston North City is more highly qualified than the New Zealand average with more people over 15 having attained sixth and seventh form qualifications and fewer with no qualifications. A higher proportion is university qualified and fewer hold trade certificates and diplomas.

The Manawatu District has a slightly higher proportion of people in 0-19 age group, a lower proportion of people in the 20-29 age group, and a slightly lower proportion of people in the over 60 age group, than the national average.

Compared with the national average, Palmerston North City has a higher proportion of Pakeha and a lower proportion of Maori and Pacific Island people.

The city is becoming more ethnically diverse, with the proportion of Pakeha falling since 1986 and with all other ethnic groups increasing.

The Manawatu District has a higher proportion of Pakeha than the national average; a lower proportion of Maori; and a significantly lower proportion of Pacific Islander people. The Manawatu District is therefore less culturally diverse than the national average.

There are, however, significant variations in ethnic composition within the Manawatu District. The proportion of Maori is greatest in Sanson, Feilding and Himatangi Beach (1991 Census Figures).
 

The number of people employed both full-time and part-time in the Palmerston North City and the Manawatu District (excluding Tararua and Horowhenua Districts) workforce was 46,431. There were 27,375 full-time wage and salary earners and a total of 5,988 self employed, 2,709 of these with employees working for them. The total number of part-time employees for Palmerston North and the Manawatu, including self-employed, was 11,721, just over 25% of the workforce (1996 Census).

The ten largest industries in Palmerston North, accounting for 90.9% of Palmerston North employment, have been ranked by BERL (1998:92). Their analysis is based on calculations that use full-time equivalent (FTE) jobs. According to these calculations, 33,003 people were employed in the Palmerston North workforce in 1997. The greatest proportion, 28,720, were employed in the service sector. Only 223 were in the primary sector and 4,060 in the manufacturing sector.

The following points can be noted from the above figure:

• No primary industry is in the top ten industries for Palmerston North employment.
• Fabricated Metal Products is the only manufacturing industry included in the table, accounting for 4.8% of employment.
• The services sector accounts for the majority of industries in this table, with Public Services accounting for 29.4% of Palmerston North employment, followed by Retail Trade at 11.6%, and Private Services at 11.5%. These three industries account for 52.5% of Palmerston North's workforce.

The PNCC report the following trends in FTE employment in the various sectors of Palmerston North City, drawing on Statistics New Zealand data (Chin, 1998:17).

The following industries are not included in these statistics:

• Agriculture and Agricultural Contracting
• Domestic Services in Households
• Hunting and Trapping
• Armed Forces
• Fishing and Seagoing work
• Owning and leasing Real Estate

The above figure graphically displays the continuing downward trend in employment in manufacturing.

Wholesale and Retail Trade had the largest rise in employment by FTE employees.

The ten largest industries in the Manawatu District (including the Tararua and Horowhenua Districts) have also been ranked, accounting for 88.0% of employment in the Manawatu (BERL 1998:99).

• The only primary industry included in the top ten industries for Manawatu (including Horowhenua and Tararua) employment is agriculture, employing 22.5% of the region's workforce.
• Two manufacturing industries are included. These are textiles, apparel & leather, which accounts for 4.9% of employment, and food, beverages & tobacco which accounts for 8.7% employment. The textiles, apparel & leather figure would be influenced by the inclusion of Horowhenua in the calculation, and the food and beverages figure is suggestive of the role that food industries play in the Manawatu.
• The services sector, interestingly, accounts for the majority of industries in the Manawatu (including Horowhenua and Tararua), with public services accounting for 17.1% of Manawatu employment, followed by retail trade at 9.9%. Combined, these sectors account for 27.0% of the Manawatu workforce (BERL 1998:99).

The national Household Labour Force Survey (HLFS) unemployment rate was 6.7% for the last quarter of 1997. This was down slightly on the September quarter (6.8%) but up against the previous two Decembers (1996= 6.0%, 1995= 6.2%). However in the March quarter (1998) it rose to 7.1%, the highest in four years.

In January 1998, 4,025 people were registered as unemployed in Palmerston North; 15% more than were registered as at January 1997. The HLFS unemployment rate for the Manawatu-Wanganui region was also up. For the past five quarters, since December 1996, the region had been exhibiting a lower unemployment rate for the Manawatu-Wanganui region when compared with the national rate.

In the quarter to March 1998 the rate has risen sharply to 7.6% (the highest since December 1995) and is now above the national rate.

The number of local vacancies notified through the NZES in PN declined from 141 in January 1997 to 106 in January 1998 (still significantly higher than the 55 vacancies notified in December 1997) (PNCC Economic Report May 1998:10). Other job advertising trends reflect a subdued economy and a weak labour market. Job advertisements in Manawatu were down from 8,731 in the Feb 1997 year to 6,236 in the Feb 1998 year. There were 476 jobs advertised in June 1998, down 15% on the 560 advertisements during June 1997 (PNCC Economic Report August 1998:18).

Most local responses to unemployment are local variations of central government funded programmes. The New Zealand Employment Service (NZES) and the Education, Training and Support Agency (ETSA) are the primary providers of these, and programmes are mostly aimed at training and/or motivating the unemployed. Key programmes include: Enterprise Allowance; Job Plus; Work-Based Training; Training Opportunities Programme; and Community Taskforce and Taskforce Green (the planned Community Wage programme will mean some modification to the latter). The Careers Service also performs the role of assisting career planning. Workbridge provides support for people with disabilities in employment.

The tertiary education institutions, primarily the Manawatu Polytechnic, and the emerging private training enterprises, which provide courses for targeted groups, also absorb many of those who would otherwise be unemployed. Queen Elizabeth College plays an important role in providing employment-focused secondary and adult education.

Local employment focused community initiatives such as Phoenix Supported Employment, Mature Employment Support Agency, and the Manawatu Employment Action Group, provide support, networking opportunities, and advocacy for the communities of interest they represent.

Business development agencies such as the Palmerston North Enterprise Board run a Be Your Own Boss Programme and offer support to new migrants. The privately run Mobile Employment Business Facilitation agency offers support to self-employed workers and to small businesses.

The Palmerston North City Council has adopted an employment policy and an economic development policy and strategy, and employs an economic policy analyst and two economic development officers whose roles include attracting, retaining, and supporting businesses in the City. Priority areas are: business development, diversity and promoting links between education, research and sectors. The Council's Community Development section also has the potential to promote community employment development in a way that will advance the opportunity for disadvantaged communities to gain the benefits of secure work and income.

Initiatives to promote the development of the local economy and labour market include:

• the establishment of a regional tourism organisation "Destination River Region" - a co-ordinated structure to market the Manawatu-Wanganui region
• the establishment of a research brokerage between Massey University and City Council to help local businesses to access research expertise and funding
• the establishment of "Step One" - an alignment of various economic growth agencies - and active support for economic development from local government
• the establishment of "Vision Manawatu" - a partnership between business, education, research and local government to market the region to large business and industry and assist retaining existing businesses

Developments that will have an effect on the local economy include:

• the establishment of the Income Support Service National Student Allowance Call Centre and the pursuit of other call centre contracts
• Ernest Adams expansion of food processing activities and development of a food industry cluster
• defence expansion with Linton to become the focus of the Army's deployment and fighting capability. Possible further expansion and consolidation of army and air force in our region following the defence real estate review. A local defence industry/supplier cluster established
• ongoing commercial building activity in Palmerston North - "Regent On Broadway" restoration, Polytechnic central city development, Crop and Food building, ongoing building at Massey, Linton Army Camp barracks, Palmerston North Hospital five year building project, new accommodation wing at Manawatu Prison, Carncot School
• runway extension at Palmerston North Airport allowing direct flights between Australia
• the building of the Centralpower wind farm with extra tourism opportunity
• the expansion at Toyota's presence in the City
• the extension of Centrepoint Theatre funding from Creative New Zealand for three years

BERL (1998:96) forecast employment in Palmerston North City to grow by 1.0%pa between 1997 and 2002 (5.1% in total). They anticipate that any variation from this will be towards higher growth, as the city's economy appears robust, especially in specialised areas such as education and research.

Lower employment growth of 0.7%pa between 1997 and 2002 (3.6% in total) is forecast for the Manawatu (including Horowhenua and Tararua) (BERL 1998:103). This projection, though, is considered by BERL as optimistic.
 

Employment in the service sector is expected to increase by 1.15%pa between 1997 and 2002 (0.15% greater than the national average which is projected to grow at a rate of 1.0%pa). BERL (1998:96) forecast the main areas of growth to be in the largest industries, public services and trade.

Employment growth in public services depends on central government policy, and reducing budgetary provisions will affect prospects in this sector.

The Palmerston North economy does tend to be sheltered from broader fluctuations in the national economy by the high presence of public sector activity in the City.

Strong growth periods in the City's economy tend to be associated with strong growth in student numbers in the City. Spending by staff, students and institutions has a major impact on retail, property, productive and services sectors (PNCC February Economic Report 1998:31). Palmerston North needs to ensure that Massey's establishment of campus outposts does not contribute to a declining student population in the city.

The Manawatu Polytechnic inner city redevelopment and the expansion plans for Massey University are likely to continue to secure student numbers. There is a significant number of international full fee paying students at local campuses but the Asian financial crisis may have an impact on future student enrolments.

Tertiary students provide a large labour force for the casual and part-time job market in the city and often will be in direct competition with other job seekers.

The employment growth forecast in trade includes wholesale and retail trade, and restaurants and hotels.

Transport and storage employment growth of 1.1%pa between 1997 and 2002 is linked to the strategic geographical advantage of Palmerston North, being at the centre of New Zealand's transport and distribution networks.

Home construction will continue to be steady given projected population growth and the maintenance of student numbers, and there is potential for employment growth in commercial construction if local firms gain much of the work in the major infrastructural building that is planned.

Employment growth in services in Palmerston North City, then, is likely to be in areas of:

• retail sales and customer service
• restaurants, hotel services
• rural and domestic tourism
• sport and entertainment
• transport, storage and warehousing (especially cool storage)
• building and construction
• computer software sales and servicing
• private services (lawn mowers, gardeners, child-care, cleaners, hairdressers)
• landscaping - planting and maintenance services
• provision and preparation of firewood
• services for the elderly (as the larger cities become less attractive to live in because of rising costs and declining services)
• security
• telecommunications, with call centre operators, engineers and technicians
   

While manufacturing sector output in Palmerston North City is expected to grow at 2.7%pa, employment in manufacturing is expected to decrease by 0.2%pa between 1997 and 2002 (BERL 1998:95).

The only industries forecast to achieve positive employment growth rates are "fabricated metal products" and "other manufacturing" (BERL 1998:95).

BERL projections for the Manawatu (including Horowhenua and Tararua) follow a similar trend, with manufacturing output forecast to grow at a rate of 2.4%, and with employment expected to decrease by 0.6%pa between 1997 and 2002.

Fabricated metals has benefited from defence spending in the region and there are likely to be continued opportunities in this area over the next five years.

Employment growth in manufacturing in Palmerston North City and the Manawatu, then, is likely to be in areas of:

• precision engineering (sub-contracting component production for major manufacturers) (defence equipment and refurbishment)
• specialist industrial machinery
• electronic and electrical equipment
• hardware and plumbing fixtures
• adding value to traditional primary products; meat processing including lamb, beef, venison and pork; forestry products; grain and other agricultural products
   

Primary sector employment growth in Palmerston North is expected to be minimal.

Primary sector employment growth in the Manawatu District (including Horowhenua and Tararua) is forecast at 0.8%pa, mainly due to growth in agriculture (BERL 1998:101).

Employment growth in the primary sector in the Manawatu, then, is likely to be in areas of:

• agriculture - sheep, beef, dairy, deer, forestry and fishing
• specialist tree production
• horticulture
   

Employment opportunities in the Palmerston North and Manawatu region are bound up with the policy direction and economic fortunes of the nation. Events and policies at the broader national and international level often serve to undermine local attempts to promote the enhancement of local employment opportunities. For example, Reserve Bank control of interest rates as a mechanism to dampen inflationary pressures also tends to undermine economic and employment growth. The drive to reduce tariff protection exposes local manufacturing industry to competition from cheaper producers in other nations. Other influences include globalization and the opportunities many employers have to implement technology based labour savers. It is therefore improbable that full employment will be achieved within the context of current political and ideological climate.

Given the likelihood of a persistent national unemployment rate of, say, around between 6% and 8%, questions can be asked about local strategies to deal with the problem of unemployment.
 

Training can be worthwhile. But there are questions over whether training actually creates permanent jobs. Some suggest that no amount of training will make an employer create a new job for an unemployed person. Even training which promotes the development of life skills and attitude. At best these training programmes keep people busy and ready for employment. While these may be worthwhile goals, we need to ask if such outcomes could be achieved in better ways. Others, though, maintain that training can create jobs. They maintain that when employers cannot find appropriate staff, they cope with growth by increasing their use of current workers. These employers maintain that they would hire more staff if they could find work-ready people.

Up to date research on the skill gaps of unemployed workers reports that from the perspective of employers, many unemployed or low skill workers need to develop basic customer contact skills (such as in retail, wholesale, business and private services) (Venture Research 1998).

Customer contact roles require self-confidence, reliability and good communication skills, ability to learn - skills that are necessary across many industry sectors in the 1990s economy, even in areas such as construction labouring and apprenticeship.

Employers want, primarily, people who are confident, responsible, reliable, and good customer communicators (Venture Research 1998:38). If job applicants have these skills, employers report that they are happy to take them on and train them in the more detailed skills relevant for their business.

Many employers do not think long-term unemployed have these attributes. They therefore consider it to be too risky to take on someone who has been out of the workforce for a long period. The risk of employing "non-performing" staff, and the difficulties many employers anticipate in dismissing staff, leave them reluctant to take on staff who have been unemployed.
 

Progress towards closing the gap between Maori and Non-Maori employment has been limited, and the latest Te Puni Kokiri report on the issue states that with Maori unemployment increasing to 18.3% in March 1998, "there has been a widening of the disparity in Maori and non-Maori unemployment once again" (Te Puni Kokiri 1998:16).

Maori unemployment in Palmerston North City is concentrated in the 15-34 years of age group, with 78% of local unemployed Maori being in this age bracket (Palmerston North City Council 1998a:15). The picture may be different in the Manawatu District with a higher proportion of older unemployed Maori living in rural communities or on marae.

Maori unemployment in Palmerston North, then, is concentrated in younger Maori. Other studies (Venture Research 1998:44) of Maori unemployment report that many younger Maori have not thrived in the school system and a sizeable proportion are therefore disadvantaged. They have often been encouraged to leave school early because of the need to earn an income and they often lacked education-focused role models in their families (their parents and grandparents left school early and encouraged their kids to do the same). Unemployed younger Maori are said to lack technical skills and "current-commercial" life/communication skills. This group is proud, able and motivated when in a whanau environment (with their friends or family), but are said to "wither" when thrust into the commercial business world on their own.
 

Venture Research (1998) also found that many employers find today's youth lacking in a positive attitude and work ethic, as well as in basic literacy and the ability to learn. Is this the cause of youth unemployment today? Probably not.

In fact, there is evidence that the youth in the full employment years of the 1950s and 1960s also had attitude problems, but then, there was scope for businesses to take on younger workers and carry a lower level of production until they acquired positive work habits. There is not the same scope for businesses to do so today.

There were also large employers then, often government departments, who took on young people and gave them their first job. Many of these organisations or departments no longer exist or have been sold to more commercial operators.

Those taken from the bottom end of the labour supply pool were mostly trained into skilled workers with a good ethic.

These entry points no longer exist for those with low skill levels, personal motivation and communication or service skills. These workers are therefore excluded from entering the workforce.

Without the opportunity for an upward spiral into skilled work, many of today's youth have tended to go on a downward spiral into a loss of self-confidence and skills.
 

The primary source of "real" and sustainable employment is in the private sector or in permanent public sector work.

The performance of the private and public sector is affected by international and national market conditions and by national and local policy responses to those conditions.

While subsidised work schemes are not a source of "real" and sustainable employment, they can deliver worthwhile and motivating experiences for unemployed workers, and can be an effective source of training.

It is questionable whether subsidised jobs actually lead to employment growth in the private or public sector and there is evidence that they cause significant displacement of real jobs. Furthermore, subsidised schemes are always at the mercy of the subsidiser.

Community-based employment initiatives also have a role to play in the pursuit of employment growth.

Our challenge as individuals and as representatives of agencies involved in the issue of local employment is to continue to refine the strategies that are currently being implemented to enhance the opportunity for local employment growth.

What follows is a list of existing initiatives and new ideas that may be of use as "starters" as you contemplate how we might continue to make local action on employment issues more informed, creative and effective, through the co-ordination, collaboration and co-operation of local organizations.
 

Ongoing support by agencies for the strategies identified in the Palmerston North City Council economic development strategic plan (available from Council).

Co-ordination between local manufacturers, training providers and Industry Training Organisations to ensure ongoing provision of skilled staff (there are national technical skill shortages).

The establishment of a regional economic development fund, with the aim of sponsoring local business development, and promoting investment in the local economy.

The promotion a secure and supportive environment for local businesses to enhance the likelihood of their staying.

Advocacy at a national level for policies that will enhance the development of regional economies.

The promotion of a new "socially responsible" business culture whereby businesses adopt a longer term perspective and take on more staff than minimum levels.
 

Improved information and advice services for small businesses to promote 1) greater employer coverage and 2) the improvements in the quality information provided.

The setting up of an ethical investment initiative, at a community level, to support new small business initiatives.
 

The creation of group training schemes whereby organisations already running training programmes train unemployed people and lease them out in growth industries.

Support for the Parents As Career Educators - programme.
 

Inviting marae into a process of consultation, through which government agencies indicate how they can help develop marae as an economic and employment base.
 

Providing access to skills re-development assistance, prior to redundancy to assist workers respond to business retrenchment. Advocacy at a national level for funds to assist with re-training while people are still in jobs, so they avoid the risk of unemployment and redundant skills. For example, we need to be approaching IRD and Telecom to ensure that those workers likely to lose their jobs are able to update their skills before being made redundant.

Ensuring access to information about entitlements to assistance for unemployed and disadvantaged communities.

The development of community work initiatives that provide real security for those employed in them.

Work with communities to assist with the applications for, and administration of, funding employment projects - offering financial and administrative support for employment focused community initiatives.
 

BERL, 1998. Education Training and Support Agency Regional Economic Profiles and Forecasts, BERL, Wellington.

Chin, F.M., 1998. Palmerston North City Council Economic Report (February, May and August), Strategic Planning Unit, Palmerston North City Council.

Manawatu-Wanganui Regional Council, 1998. Annual Plan 1998-1999, Manawatu-Wanganui Regional Council.

Olson, C., and Teira, T., 1998. Maori People and Households of Palmerston NorthCity 1996, Strategic Planning Unit, Palmerston North City Council.

Te Puni Kokiri, 1998. Progress Towards Closing Social and Economic Gaps between Maori and Non-Maori: A Report to the Minister of Maori Affairs, Te Puni Kokiri, Wellington.

Venture Research, 1998. Employment Profile for the Auckland City Area, Venture Research, Auckland.

www.wairaka.net/ubinz/IR/1999summit/employ01c.htm

[Table of Contents]   [Ian Ritchie]