The Press WEDNESDAY, FEBRUARY 25, 1976. Special work, inflation, and productive jobs

Press, Volume CXVI, Issue 34086, 25 February 1976, Page 20

The Press WEDNESDAY, FEBRUARY 25, 1976. Special work, inflation, and productive jobs

Unemployment this winter will be widespread by New Zealand standards. The Government has promised to take steps to give the unemployed something constructive to do, and that seems sensible. But for the Government to announce on the one hand that it is freezing local body loans and on the other that it will pay out what could be considerable sums to local authorities for special work schemes appears contradictory. Special work schemes would, it is true, generally provide work appropriate for the unskilled and semi-skilled who are already having difficulty finding jobs. Skilled workers can still get jobs and are likely to continue to do so. But by the time unemployment reaches the peak expected later in the year, some skilled tradesmen may be out of work, largely because of a decline in the building and construction industries which the Government’s action on local body loans is expected to accentuate. The Government would be much better advised to make sure that the limited supply of money is directed to urgent public projects that will produce lasting benefits and which will keep skilled tradesmen usefully employed. This might not dispose of the need for “ make-work ” schemes; but it would limit the need for them. Although the special work that can be offered to unemployed people may benefit the community, it is obviously not the kind of work to which local bodies have given precedence.

The building industry will take heart at the news that the Housing Corporation may soon reopen its doors to applicants for loans. But the industry will remain in doubt until the Government announces the amount of support it will give to building in the coming year Some of the Government’s support is indirectly given through the expenditure of local authorities, because this is assisted partly by Government subsidy and partly by way of approvals for local loans While the Government’s reasonable purpose is to manipulate economic activity to reduce inflation and to restore the balance of overseas payments, a coherent range of adjustments is called for.

No-one should expect a perfect balance to be kept in applying a scheme to minimise unemployment All that can be asked is that the Government err in favour of keeping alive the schemes that the local bodies ordinarily prefer. In many instances these schemes will maintain the employment of both skilled and unskilled workers. Furthermore, in the battle against inflation, productive employment that increases the supply of goods and services needed by the commumty is better than unproductive relief payments that maintain demand but do nothing to increase the means of supplying it. The choice of productive work must take another factor into account: the work itself must not generate too much demand for resources. That is partly why special relief work tends to be limited to fairly simple tasks that employ many hands but few machines and materials. Inescapable as they may be in many instances, special work schemes do not solve some of the major social problems associated with unemployment — the demoralisation of young people who would like to have apprenticeships or other employment that promises a satisfying future, and the disgruntlernent among those who have gone to pains to acquire skills only to be told that their skills are, for the moment, not required. A sensitive attempt must be made to keep a balance between the health of the general economy and the satisfaction of individuals. Although the Government sees the need for drastic remedies to the country's economic ills, a plan that appears to reduce employment on the one hand and to create it on the other does not make good sense.