Every job is valuable in this crisis

It was not called the jobs Budget for nothing. Just about every aspect of this Thursday’s Budget was designed to save existing jobs, create new ones and help people get new skills to make them employable.

The Government is working hard to keep unemployment under 10 per cent, an ambitious target that many developed countries couldn’t manage even before the pandemic.

The situation already looks dire enough. The dole queue since March has grown by about 45,000 and 6.2 per cent of the country’s working population is currently receiving the jobseeker benefit, up from 4.9 per cent in January.

Currently, about 1.5 million employees are also getting their wages or salaries subsidised by the wage subsidy. Although the Budget pumped another $3.2 billion into the scheme, the programme is not sustainable and many more will lose their jobs as firms contract and entrench when the subsidy runs out.

New Zealand began the year with about 145,000 on the jobseeker benefit despite a buoyant economy and apparently so many jobs that thousands of overseas workers are gainfully employed in this country.

However, the pandemic has marched a different cohort into the dole and benefit queues.

A new Ministry of Social Development report on those who signed up on for a benefit during lockdown showed the new sign-ups were more likely first-time beneficiaries, higher earners, recently returned from overseas, and Pa¯ keha¯ .

Of those applying for the jobseeker benefit, 46 per cent had little or no previous benefit history, compared with 26 per cent in the same period last year; 45 per cent were aged in their 20s, compared with 37 per cent last year; 39 per cent were Pa¯ keha¯ , compared with 30 per cent last year. The number who had recently returned from overseas increased tenfold. Job loss was the reason behind 45 per cent of the benefit applications, while returning to New Zealand accounted for 12 per cent of grants.

As Social Development Minister Carmel Sepuloni has pointed out, this is different to the global financial crisis of 2007-8, in which Ma¯ ori and Pasifika tended to be the victims in the early stages.

Although it’s early days, the swelled ranks of the unemployed could have important political and social ramifications. The Government’s economic stimulus package should mop up many of the suddenly jobless but will be scrutinised like few other Government programmes.

A larger and better educated unemployed section of the population could be a crucial electoral bloc who will not accept the income inequality of the past. The Economist magazine points out that ‘‘disruptive global events have often precipitated shifts towards a more equal distribution of income and wealth’’.

Some scarred by unemployment will agitate for changes to the economy and labour laws. The unemployed could also support more radical policies on the Right and Left of politics. Plenty of research has shown that spending some of your most productive years without a reasonable job has lifelong consequences in terms of incomeearning ability and acquisition of assets. Things could be different this time around. Many advanced economies have been here before and should know what works. Attitudes to work and employment may have to change.

There are many paths to selfworth that do not include paid employment. Governments will have to look harder at income inequality and who should pay more into the tax kitty.

New Zealand workers also have to be less fussy about what they do for a crust and accept every job is valuable.