Welfare system may be to blame for Kiwis not taking jobs

Patrick Malley says he works hard to employ locals - but that's not for commercial reasons.
SUPPLIED

Patrick Malley says he works hard to employ locals - but that's not for commercial reasons.

A Northland horticulture firm director says employing locals does not make economic sense.

A Mapua cafe made the news this month when its owner revealed she had struggled for six months to get anyone interested in a kitchen job.

Patrick Malley, of Onyx Horticulture, said it was a problem that affected his industry, too. It was hard to get people to turn up for work.

His firm had made a commitment to employing New Zealanders where it could – but that was a decision driven by social considerations, not commercial ones.

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Ali Slotemaker at her cafe Alberta's in Mapua, which has had trouble finding kitchen staff.
BRADEN FASTIER

Ali Slotemaker at her cafe Alberta's in Mapua, which has had trouble finding kitchen staff.

He said it could take a year to get someone to the standard where they could be considered "employable", including communicating about whether they were going to be at work, turning up, having organised child care and sorted out other issues such as fines.

He said a big problem for the horticulture industry was that it was hard to get committed staff for temporary work.

"If you ask someone to turn up seven days a week for three months, then another two further months, then say 'cool you can go on the dole now and we'll have you back next year', it doesn't get people out of bed in the morning."

Researcher Jess Berentson-Shaw says the current welfare system is too inflexible.
SUPPLIED

Researcher Jess Berentson-Shaw says the current welfare system is too inflexible.

Backpackers and migrant workers on on the regional seasonal employer scheme were better suited to that, he said, because they expected to come in for a short time and then leave again.

To deal with the problem, Onyx Horticulture has worked to mix its crops of kiwifruit, avocado and berries together to spread out the work required over the year. That allows it to have 60 full-time staff.

He said that was an option for him because of the range of crops his business produces. Someone who was only growing one crop would not have that flexibility, he said.

Kim Campbell, chief executive of the Employers and Manufacturers Association, said it was hard for employers everywhere to find workers for entry-level jobs.

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"The question is if that's the case, why is there still 5 per cent unemployment?" he said. "Any smart person has to think that."

He said even entry-level jobs usually required some degree of on-the-job training. "Even if you want to hold a stop-go sign, you have to have a traffic management certificate."

Campbell said in some cases, people were put off by transport issues. "There might be a job but they just can't get to it. It's expensive to get around Auckland and accommodation is expensive."

But Jess Berentson-Shaw, Morgan Foundation researcher and author of Pennies from Heaven, said the current welfare system could be partly to blame, too.

Many of the benefits and supports have the unintended consequence of making work unappealing.

She pointed to sole parents. When someone is getting sole-parent support, they can only earn up to $100 a week before losing 70c of net benefit for every $1 earned. 

But to get the $72.50 in-work tax credit (IWTC) under the Working for Families scheme, they need to work a minimum 20 hours a week and give up their benefit. 

Then there are other costs, too.

"A sole parent on a low income must keep their work hours to the minimum 20 hours to avoid the extra costs of unsubsidised childcare," she said. "But if they work just under 20 hours, to align with the childcare part-subsidy, they lose the IWTC. It is a rock and a hard place scenario."

Some are reluctant to give up their Jobseeker Support to take temporary work because of the stand-down periods that apply if they need to return to it.

The Working for Families system itself can be problematic because the amount of support a family gets drops as the household income increases, which means some second-earners do not have the same incentive to take work or longer hours, if it tips the household over into the next salary band.

When the system was introduced, it resulted in 9300 fewer second-earners in two-parent families being in paid employment.

"Those parents who work the minimum hours and come off a benefit but do not reach a specific income threshold [around $23,000] may qualify for an income top-up, called the minimum family tax credit," Berentson-Shaw said.

"But there is no incentive to work more, as for each additional hour worked over the minimum required hours [20 for single parents and 30 for couples], the top-up disappears dollar for dollar up to around $23,000. This effectively reduces the value of the work. If you fall below the minimum number of working hours, you lose the top-up and the IWTC."

She said it should be considered as a factor in why jobs were being left vacant.

"If you have to travel far, uproot your family, add costs to your living, in order to take impermanent insecure work that will affect your current support possibly negatively and stress you out, all for marginal - if any - gain, why would you?

"Migrant workers have none of these complexities to deal with. My view is that we import people outside of their family and societal obligations and complexities. This is not dealing with the lived realities of our population and making policy that works with that, it is finding ways to ignore one part of your population's lived reality and hence their wellbeing."

* Comments on this story are now closed. 

 - Stuff

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