Work and get paid, or don’t work but still get paid?

Construction site photo credit noted.co.nz

Employers can apply to receive funding for employing some of the 50,000 18-24-year-olds who do not work, are not in apprenticeships or training, and have been sitting on their bums for at least six months. Quote:

It was a Labour Party election policy to “ensure all young people who are able, are in work, training or education”. A ‘dole for apprenticeships’ scheme was part of that plan, but original policy would have it apply to young people on a benefit for three or more months, rather than six.

Mana in Mahi will start with a 150 person pilot, expanding to 4,000 people next year.” End of quote.

It is a great and noble idea to get so many young people off their butts and into employment.  But wanting to achieve it and actually achieving it are two different beasts.  Someone needs to explain to Jacinda that “able” to work does not mean “want” to work when she waved her magic wand and promised quote

“We’ll help [young people] earn an apprenticeship or other qualification so they can get on the pathway to life-long work… They get off the benefit and enjoy the dignity of work while encouraging employers to take on apprentices they might otherwise not have trained.”[…]

“Employers who give apprenticeships or traineeships to young unemployed people will be paid the equivalent of the dole for a year.” End of quote.

Paul Hollings, head of trades at Manukau Institute of Technology (M.I.T) agreed with her when he said: quote

They need an opportunity, and this is an opportunity.”  End of quote.

Hollings also said M.I.T can’t produce enough graduates to meet the market.

There is a very big difference between someone who has taken the trouble of training for work, to someone who just sits around waiting for a job to fall in their lap.  M.I.T graduates are motivated to work.  As the old saying goes, you can take a horse to water but you can’t make him drink.

The big question is, will youth actually give up their benefit for apprentice work?  There isn’t enough financial incentive to make them roll out of bed and trundle off to work for five days a week.

Working for the minimum rate of $16.50 an hour over a 40 hour week a worker would receive $544.50 after tax.

Not working and receiving work and income support would net $344.40 a week, including the maximum accommodation allowance of $165 a week.

Is it really worth getting out of bed for an extra $200 per week, less in fact, when the cost of work clothes and travel is taken into account?

16 year olds on the “training” or “starting out” $13.20 minimum hourly rate have even less incentive because their net weekly income for a 40 hour week is a paltry $91 more than the dole, certainly not worth getting out of bed for.

And how many “unemployed” youth are supplementing their dole by working in the black market “under the table” economy simply because the dole is insufficient to live on in Auckland?

Two years ago, in 2016, a survey of Auckland’s construction industry indicated quote:

The scale of tax-dodging work is such that in Auckland, one in five tradies believe that more than 25 per cent of construction work is paid under the table.

The IRD said that despite its belief that attitudes to cash jobs were changing, undeclared cash jobs remained a significant problem.

“We know it is big, because when we focus on it we receive tens of millions of dollars of extra income,” said spokesman Andrew Stott. “We also know that individually the size of it is big. The research said that 11 per cent of tradies say they know of a cash job of more than $20,000.” End of quote.

And what about the other industries where cash regularly changes hands such as in hospitality and retail?

The black market economy will be blossoming as taxes increase.

97% of New Zealand businesses employ less than 20 employees.  How many business owners with a handful of employees can stretch their limited employees to cover the chunks of time off apprentices need for study?  And what about the reputational risk to a business of a badly behaved employee?

One small business owner who provides cleaning services told how he got stung when he took on a 19 year old apprentice.

After several complaints from clients about expensive items disappearing from their homes (not great for his business) in conjunction with the police he placed specially marked bank notes in the area where this young thief was working. The thief took the notes and the police duly arrested him.  But even when the marked bank notes retrieved from his pockets matched the pre-recorded serial numbers he still protested his innocence!  A liar as well as a thief.

This story did have a happy ending because when the police went to the young thief’s home they retrieved thousands of dollars of stolen goods from the entire family’s thievery.  That business owner said he would never employ an apprentice again because the risk to his business was too great.

He also said his best apprentices usually left to start their own business as soon as they were skilled.  He sees no advantage in hiring apprentices.

We would like to think all employers and employees behave fairly, but this is just not true.

Unscrupulous employers can take on subsidized apprentices as cheap labour and then dump them under the 90 day trial period when the subsidy is used up.

Like all good ideas that sound great in theory, but are less attractive when the finer details do not pass scrutiny, perhaps this government should have set up another working group to iron out the flaws before they rolled out this particular scheme?

 


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