More jobseekers + no more jobs = lower wages

by frog

New Zealand’s labour force grew by around 43,000 yesterday.

That is the approximate number of single parents receiving domestic purposes benefit whose youngest child is aged six or over.  As of yesterday, they all became part of the labour force; not necessarily because they all want to obtain paid employment but because Work and Income will now cut their benefits if they don’t look for it.

And thousands more will join the labour force over the coming months as sickness beneficiaries are certified as fit for part-time work and expected to look for it.

Where will all the jobs come from to meet the increase in demand for paid employment caused by forcing domestic purposes and sickness beneficiaries to look for work?  There are already over a quarter of a million jobless New Zealanders who want a job but cannot find one.  Paula Bennett is meant to be the Minister of Social Development and Employment, but her Government policies are bereft of any employment creation initiatives.

So there will be more people looking for paid work, but no more paid work available.  That creates downward pressure on wages.

Maybe John Key was reported accurately after all, when in 2008 he was quoted as saying “we would love to see wages drop”.

frog says

Published in Economy, Work, & Welfare by frog on Tue, September 28th, 2010   

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