KEITH RANKIN ON THE COMMUNITY WAGE * Economist Keith Rankin in recent months has been challenging 'the Left' in NZ to look again at the current debate on the Community wage and consider other options to treating the proposal with cynicism and threats of non-compliance. He believes the Community wage equates to the concept of "participation income", and is worthy of greater support. The Community Wage requires certain beneficiaries to give up as much as 20 hours of their time per week to non-market work. Rankin points out that the present requirement is that such beneficiaries seek full-time market employment, a commitment of 40 hours of a person's or a family's time to the market economy. The Community Wage idea requires no commitment at all to the market economy. It requires only a half-time commitment to what is now understood as the "voluntary sector". Rankin: "The fact that the Community Wage was not formally conceived as a "participation income" does not mean that it cannot be received by our communities as one. The Community Wage has the potential to legitimate a lifestyle which involves transforming the 40 hours we sell to the market into a combination of leisure and non- market work. That would be a major advance from the twentieth century obsession with the labour market." "The Community Wage can do more than legitimate non- market work. By making the unemployed into community employees, it also makes it possible for them to become community employers. Community employment can be the cornerstone upon which we rebuild our local economies." * Rankin advocates a form of "subversive compliance" with the Community Wage programme: "Let's make the Community Wage into a form of participation income that has some of the characteristics of a Universal Basic Income. And let's do what we can to use the community wage fund to create local employment cooperatives -- organisations, set apart from the global market economy, that enable otherwise unemployed people to become community-sector employers." COMMUNITY WAGE NUMBERS * NZES reports that there were 8,169 people on Community Taskforce projects in June, which is well within their target of 7- 10,000. Since the beginning of the year, the number of people on the work-for-the-dole scheme has doubled, and it is expected that next year between 25,000 and 30,000 unemployed people will participate. KEY POINTS OF CTU WORK-FOR-THE-DOLE SUBMISSION * Amidst the outrage on the lack of time given to the public for submissions on the compulsory work test legislation, (see Voices, this issue) the details of many of these objections has been somewhat lost. CTU Secretary Angela Foulkes told the Social Services Select Committee that there are very high risks of both economic and personal abuse that arise "out of the poorly defined status of those directed to undertake organised activities." Foulkes says that the Bill creates an open-ended and non-appealable right for a departmental official to define what people will be required to do, and when they will have to do it. In addition, Foulkes believes that community work will create a competitive pressure on lower paid workers, and erode their existing employment rights. Foulkes: "Community work will displace paid work. The concept of forced labour is repugnant, and is in breach of basic United Nations and International Labour Organisation conventions." The CTU submission outlined several major amendments it wanted to see in the legislation. These included -- 1. Any community work placement should be voluntary. 2. Any penalties for breaches of the work test should only be applied after the completion of a due process, and should not involve summary justice. 3. There should be explicit provisions about the sorts of projects that qualify and do not qualify for community work. 4. The Act should define a screening process to establish the capacity of the organisation providing the work to ensure proper workplace standards and protections. 5. The chief executive should be required to define and publicise those standards. 6. Provisions should ensure that each worker allocated to a position has her or his rights explained. 7. The statute should establish procedures for a regular monitoring of providers, both as to the sort of work that is being done and the way placements are being treated. 8. Parliament should make it abundantly clear that community work is not to be used as a weapon against the employed by shoring up rights of the employed to holidays on pay, to reasonable notice of termination, and to fair compensation in the event of redundancy; and make an unambiguous statement that it will reject initiatives to further downgrade the security of employment provisions. US WORKFARE DISPLACEMENT STUDY * Do work-for-the-dole schemes displace other employment? Yes, according to American research done by the Russell Sage Foundation. Professor Chris Tilly of the University of Massachusetts studied the impact of workfare schemes on the macro labour market of New York City. His report "Workfare's Impact on the New York City Labor Market" concludes that the effect of the 30,000 current workfare placements of welfare recipients is to displace 20,000 other workers, and to to reduce wages for the bottom third of the workforce by 9%, or some combination of these. Tilly says the 9% wage drop would reduce average hourly wages for the lowest 30% of New York's workforce from $6.33 to $5.76. It is worth emphasizing that this estimate is not for New York City employees alone. It implies that wages will be 9% lower than they would otherwise have been for the bottom third of the entire City workforce, both public and private. A summary of the Tilly study can be found on the internet at http://tap.epn.org/sage/9701till.html. REICH ON EMPLOYABILITY * For former US Labour Secretary Robert Reich, recently lecturing in NZ as a guest of the Labour Party, the question of the dole is not one of guaranteeing 'insurance' but more one of guaranteeing 'employability'. Reich: "Rather than unemployment insurance, which assumes people will get their old type of job back again after they're laid off in the roughs of an economic cycle, its important to consider what might be called re-employment insurance. That is, systems of job re- training, job search assistance, job counseling and also, perhaps, wage subsidies for a limited time if the subsequent job pays less than the former job. "Rather than job security, which is unrealistic in this new economy, you give people a degree of employability security. They know they can move from job to job without too much danger ." * Reich believes that we have to develop a new social contract that is not premised on preserving the old jobs and the old industries and ways of doing things: "And this entails ensuring the adjustment of large sections of the population to a different economy. You finance it in part out of the huge gains made by those at the top. This is not a matter of redistribution of wealth, because you are effectively investing in the future productivity of all of your people. Even those at the top will benefit as the rising tide lifts all boats ." ***** It looks like the rest of 1998 will be an international garage sale of government assets from all around the world. According to an OECD report entitled Financial Market Trends, corporate bargain hunters will be snapping up many state-owned assets as governments everywhere raise money by selling their infrastructure. Hot items: telecommunications, transport and public utilities services. Korean export industries lay dormant today as 50,000 workers strike. The strike is in protest of mass sackings. C R E D I T S ------------------- Editor -- Vivian Hutchinson Associates -- Ian Ritchie, Dave Owens and Jo Howard ISSN No. 1172-6695 S U B S C R I P T I O N S ---------------------------------- The regular (4-6 page, posted) Jobs Letter costs $NZ112.50 incl GST for 30 letters. This subscription also includes a free email version on request. 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