Youth needs hand-up not hand-out

19:00, Nov 01 2012

A few weeks ago I wrote about our high youth unemployment and backed the Human Rights Commission's call for a national youth-to-work strategy which targeted every young New Zealander, had cross-party political support and sufficient long-term funding.

A Waikato reader responded to that column, setting out his ideas on unemployment including what he believes to be the answer – reinventing the work scheme concept.

Rangiriri small business owner and retired farmer Trevor Simpson is in tune with the thinking of Mana Party leader Hone Harawira who last year said people should have to work for the dole, though only if the unemployment benefit was increased to the level of the weekly minimum wage. Some years ago Harawira's former colleagues in the Maori Party also called for it to be compulsory for all unemployed beneficiaries to be placed on work-for-the-dole or training schemes. That's not so surprising when you consider the considerably higher figures for Maori on benefits compared with the overall population.

It's not an idea that has found favour with the current government. Critics describe these sort of schemes as make-work, digging holes no-one needs and planting trees in obscure places. National's watered down welfare reforms only went so far as to require more beneficiaries to look for work or undergo training.

The work obligations, which came into force a few weeks ago, affected those that make up the bulk of long-term beneficiaries including solo parents with school age children and widows. Prior to those reforms, of the 356,000 working-age adults on a benefit in New Zealand, only 20 per cent were expected to seek work in return for receiving the benefit.

This is an issue employers should care about. An options paper by the Welfare Working Group said between 2004 and 2007 - when one in 10 New Zealanders were on a benefit - a survey of businesses found 15 per cent of firms were finding it hard to find labourers and production and transport workers while 13 per cent couldn't fill clerical, sales and service worker roles. We're not talking highly skilled jobs here.

The working group suggested many employers see significant risks in employing beneficiaries, but there was scope for them to be more involved in programmes to bridge the skills gap.

Trevor Simpson thinks compulsory work schemes would help transform " New Zealand into the clean and green country it's meant to be". The emphasis would be on using manual labour for community-based activities.

"A whole industry could be built up using our most valuable resource, people, who are being left to rot at present," he said. Under work schemes "everyone develops work and life skills and gets some of their mana back", he said.

Struggling small regional businesses would benefit but there would have to be measures to prevent people being "ripped off" and those on the scheme would need to be paid the minimum wage, he said. The idea is to grow the overall labour market rather than replace those earning a living wage.

Recent research into the UK government's mandatory work schemes found they had done nothing for the employment chances of thousands of job-seekers who had participated. The Guardian newspaper said the report by the Department for Work & Pensions on its own scheme was released just hours after the Employment Minister announced an extra ₤5 million funding to expand it. He also toughened sanctions for temporarily signing off a benefit in order to avoid being forced into unpaid work.

Critics claim the UK government is forcing people off benefits and into unpaid labour. But benefits are still paid over the four weeks of the scheme and any beneficiary completing the work placement scheme is guaranteed at least a job interview with the organisation.

Compulsory work schemes have been tried and failed before but as Simpson says, "idle people are trouble and the associated costs are huge and non-productive".

A year ago Harawira estimated the cost of working for the dole would be around $1.5 billion a year to introduce it nationally. Stack that up against the cost of keeping people dependent on our social welfare system for hand-outs rather than a hand up.