Key's cop out on employment numbers

Fri, 04 Feb 2011 12:28p.m.

Can John Key live up to his employment claims?

By Duncan Garner

John Key's comments that the unemployment numbers released yesterday are always volatile and not credible - is a weak excuse for a stumbling economy that continues to lack confidence.

The problem for Key is that the Household Labour Force Survey is the official measure. The numbers are pretty clear.

7000 more people out of work in the December quarter. 6.8 percent officially unemployed. 15.5% of Maori are out of a job. 44,000 long term unemployed. That's up four thousand in the December quarter.

The HLFS is the only survey that counts. If unemployment had dropped, Key would never have said the measuring system was crap.

But it's what politicians do. They find excuses for statistics that don't suit them. What happens next time if it shows unemployment dropping? I bet he'll then embrace the figures as showing the economy is bouncing back.

Key is right though that the figures are backward looking. But they always have been. That's not new. They measured the December quarter and are not relevant to what is happening in February. Or perhaps they are.

Key yesterday called for New Zealanders to maintain confidence his Government's plan would create jobs this year. In many ways Key is trying to talk confidence into the job market and the economy. That's his role.

But Key has effectively told Kiwis, jobs are coming. That's what his message was yesterday. Key is upbeat about the economy as usual, saying there's an increase in the number of jobs being advertised. But a good number of economists believe unemployment is still yet to peak, and may go to 7.0% before the year is out.

Some economists can't rule out another recession. But surely that's now unlikely given some of the money coming into the New Zealand economy.

The unions’ response yesterday to the HLFS was that the minimum wage should be immediately increased to $15 an hour. That's shortsighted and won't increase employment. It will likely have the opposite effect. It's part of their campaign to get workers better wages - that's fine, but productivity will mean more jobs, more wealth and better pay rates.

But the figures out yesterday are John Key's problem. He's promised Kiwis that National would bring better jobs, higher wages and voters flocked to him. He has now said jobs are coming and we just need a little more patience.

But time is ticking.

Key can dance badly and he can smile, he can laugh at himself and pick which of the ladies are hot - and in many ways his opponents have totally underestimated his ability as a politician and his ability to reach into ordinary New Zealand households.

But ordinary households need the recovery to kick in too, and Key needs more jobs to be created - his political credibility and the credibility of his economic plan relies on it.

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07 May 2012 07:57p.m.

Michael Schmidt wrote:

It was admitted on TV by Keys 2IC that "they are not creating jobs, they are creating the conditions for jobs to become available". This is quite a different thing from job creation and the "election promises" of jobs. Every goverenment "tries to create employment"... they lied by specifically saying they would shoulder the burden and create jobs.

05 Mar 2011 10:52p.m.

Shame wrote:

We will be a Banana Republic soon. what a waste, Wake up NZ

07 Feb 2011 01:32p.m.

timothy wrote:

david face it key an national have failed bitime , to debates no theorys they blew it they should be gone .its been one lie after another and now they have run the economy to ground , no way i wont give key or this incompatant national party of his another go .out out out thats the cry against national .

07 Feb 2011 01:26p.m.

Stefan wrote:

Maybe we could build a cycle track the length of New Zealand and solve our unemployment problem? LOL

07 Feb 2011 08:29a.m.

David wrote:

Clarke I think you have hit it right on the nail, “there are many differing economic theories”, but in reality there is only a few that work in real world scenarios. And unfortunately if you look at real world scenarios raising the minimum wage without getting an increase in productivity only increases unemployment.

See personally I like the saying those in glass houses should not throw stones, whilst I may not agree with all of nationals polices, the reality is that a year before the world global financial crisis and 8 years in which Labour held government New Zealand was declared in a financial crisis. See what I don’t understand is Labours policies are tried and tested, didnt work- proofs in the pudding-yet there are people such as yourself who still back them up for what I am guessing is just an ideological point. I would also like to add that this is a forum about unemployment figures and nothing to do with the sale of SOEs, socialist parties or Bernie Madoff- a fraud with no relevance to New Zealands economy, there are other forums if you do wish to talk about them.

See personally I believe that it is more the issue that you do not like Key because he is ‘greedy’. Key made over 5mil a year working as a banker. If John Key was a wanted to get richer to satisfy his ‘greed’ then he would have stayed in America earning 5mil a year instead of coming back to New Zealand to earn only 400k. 400k that he donates fully to charity unlike the members of the opposition I would like to add.

But I resent your attitude towards businesses and the wealthy. The majority of all well off business owners and wealthy people worked extremely hard to get to where they are, unfortunately there is a small minority of the really rich who give the wealthy a bad name. What you are saying is the equivalent of me saying that every beneficiary is a fraud who should get off their lazy arse and get a job, where in realty small majority of beneficiaries give the rest a bad name.

06 Feb 2011 11:21p.m.

ALEXANDA wrote:

they do not need to creat jobs anymore , they wealthy i mean the elite , no longer do they need to own factorys nor creat jobs . well think about it the govenment just steals the money of you and i as tax cuts , then they will sell our assets that we own to these assets for a song to their mates .why would the wealthy want to or need to creat jobs ?.once you sell an asset you loose the wealth that asset creats and the revinue for ever .dont say we get the tax of them , please give up 100% of its moneys generated for 10 or 20% we would take in tax , sorry you would have to be some kind of a screw ball head to agree to that . but thats what the govenment and some in the media want you to agree to .

06 Feb 2011 06:31p.m.

Clarke wrote:

I agree David that there are differing ideologies particularly when it comes to economics.

There are about a dozen different types of economists, many of them share differing views on how to stimulate an economy, what is best for job creation etc.

However we cant just gloss over Nationals failures.

They gave the wealthy tax cuts, which they have been borrowing to pay for, as they never had the money to give out in the first place.

John key happens to be extremely wealthy, so is it a coincidence that the wealthy got tax cuts, or was it simply a policy designed to suite his own greed?.

Also David, National and Labour are both socialist parties, ones Liberal and the other is conservative... but still both are socialist.

Sorry but I am so sick of people calling lefties socialists when the right in New Zealand is just as socialist.

Key would get rid of many socialist policies if he could I guess, like working for families, or the inwork tax credit... however National are smart enough to realise they have to keep socialist policies or they will be comitting political suicide.

Nationals first term: Make John Key and his buddies richer with more disposable income.

John keys second term: sell all our state assets (which are already owned by the tax payer) and then run and hide once New Zealanders find out he has made things worse for them overall.

The rich would never have left New Zeland in droves if the tax rate had remained the same... our tax system was already well suited to them with one of the lowest top personal tax rates in the world.

And we must remember David, that people like Bernard Madoff (a multi billionaire) stole 69 Billion US dollars from the stock market.. ripping off mum and dad investors.

Business and the wealthy are solely responsible for the devestation caused in the finance markets with shady dealings and over valuation of their stock prices.

06 Feb 2011 12:25p.m.

David wrote:

Clarke I've read a few of your posts now, you seem like an intelligent folk but your logic is clouded by your ideologies, and you sound it’s all the same chardonnay socialist rational.

Artificially high wage rates lead to a misallocation of resources and market failure. More people will be encouraged to work, but fewer will be demanded by companies seeking to minimise costs. The failure of the market to clear (‘classical unemployment’) will actually disadvantage the poor, as capital is substituted for labour. Companies will either sack workers or suspend recruitment - worsening the chances of getting a job.

Under your logic why don’t employers pay their workers $100 an hour... because those people on lower incomes will have more disposable income in which they will spend their money on goods thus stimulating the economy and increasing our employment.

I would also like to point out that countries with the most employment also have the lowest minimum wage. Ideally if the goal was just full employment then it would be fair to say then a perfect fair minimum wage would be $1 an hour, because this would increase the opportunities for employment (ie firms could afford to employ more staff). Unfortunately this would be a massive decrease in our human rights, so ultimately there needs to be some sort of equilibrium between where we can get the largest amount of employment without impairing our social rights. The reality is workers cannot receive a higher wage (regardless of inflation) unless there is growth, otherwise as stated before it enables employers to become more selective of who they hire, generally employing only those who have higher skills, discriminating against the poor and not actually enabling them to enter the market to develop the skills required to earn a higher wage.

Kevin if you wonder why people are skipping to Australia for higher wages, it’s because Australia has had consistently higher growth then New Zealand for the last 10 years, meaning employers can actually afford to pay their workers more without denying them the opportunity to enter the job market.

05 Feb 2011 05:09p.m.

Irascible wrote:

Key has, again, demonstrated that he is and always has been living in a cloud cuckoo land (his official residence in Hawaii would appear to support this view) that has a total disconnect with the damage his policies and government have been doing to the country while he and his asset stripping mates wait for the grand garage sale of the country first signalled when Key sold the NZ legislature to Warner Bros and Wingnut productions and threw in a few million of the NZ taxpayers' money to sweeten the sellout. The increasing unemployment is yet another reason for NZers to dispose of this incompetent.

05 Feb 2011 02:51p.m.

mis..c wrote:

john keyz hazent made any difrence im stil getin paid th same from 2yearz ago plus everyfingz increased now im more broke then i waz 2 yearz ago whatz up wif dat i fort thingz were meant 2 get betta 4us keyz u lozer hez not gettin ma vote