Unemployment or under-employment?

The government’s Job Summit has come and gone and the real work is now starting.   

Economic discourse often seems to focus too much on effects rather than causes. A rising level of unemployment is a visible symptom of the first downward cycle of recession. So is a loss of business and consumer confidence. Both reinforce the vicious spiral which leads to more unemployed. But the root causes lie elsewhere, and so do the real solutions.

  In the case of the current financial and economic crisis, the causes are largely systematic. Despite references by commentators to previous recessions and depressions (Gordon Brown has just used the dreaded D word), the current crisis has completely new dimensions, not least in the way global financial institutions, intertwined Medusa-like, can rapidly accelerate movement both up and down the financial game of snakes and ladders.

 New Zealand seems to be sheltered to a degree, at least temporarily, from Northern Hemisphere excesses. Our depreciating dollar has ameliorated the effects on our exports, though sales are softening, and our (mainly Australian owned) banks seem to be in a reasonable shape because of their comparatively  conservative stance, though it is to be hoped this very conservatism is not a barrier to banks being involved in creative solutions such as the proposed equity capital fund.

  It is very laudable to try to keep more people in work by such measures suggested at the Summit as the proposed nine day fortnight for some industries plus a training day. The government looks as it will put up the cost of the training though not of the wage costs. This could create some much needed momentum for the Skills Strategy of the previous government.

 Used properly, the 10th day for each worker is a great opportunity for timely and relevant education and training, particularly if this results in a genuine upskilling of the trade, technical, people and sales skills which will both help an organisation survived the downturn or worse, and position it for the eventual upswing.

 However the real challenge for New Zealand is not just unemployment, it is under-employment. As the annual Gallup surveys of employee engagement show, even in good times a large percentage of the workforce in many organisation is either switched off or not fully engaged   http://www.gallup.com/consulting/52/Employee-Engagement.aspx  . 

Everybody needs a fresh challenge and new opportunities from time to time. Here is a great opportunity to match intelligent business strategy with people development.

In its pre-election manifesto National talked about the “ladder of opportunity” in terms of student achievement, especially for those whom the education system  had not served well. Managed properly, a workplace-based skills programme involving everybody from the board table to the shopfloor, would create an escalator of opportunities.  As people stepped up into new jobs-governance, management, mentoring and coaching, marketing and sales, team leading, trade and technical and so on- room would be created on the step of the escalator  formerly occupied by someone now on the step above.

 This is a contrast to the Tokyo railway station-like approach to unemployment by government agencies in years gone by, with the focus on creating a scrum to push as many passengers on to the stationery train as they can manage at any one time. The first metaphor is dynamic, the second static.

What is requires is a shift of thinking from focusing on the unemployed to focusing on the under-employed. It is all about tapping the talents of our nation in new ways. It is about helping people find out what they are good at and encouraging them do more of that in new, challenging and rewarding ways.

 Of course, this is what good education is all about- drawing out and developing the talents and skills of individual learners of all ages and stages. 

The backdrop to the economic crisis consists of the breath-taking new developments in science and technology which have already transformed the world and which contain the seeds of solutions for new ways of working together. 

 There is no prefabricated template to move us forward. We had to find our own answers for our own organisations. Experts won’t help us; by definition, their expertise is grounded in the past. In increasingly complex times, we need leaders who can be open to recognizing emerging trends and not trapped in the patterns of the past like the generals of World War I.

 First we need the right questions. Handling uncertainty with flair and creativity and admitting you don’t know many of  the answers is a good start for leaders who genuinely want to find a way through the present crisis and have  their organisations in good shape when  the business cycle picks up.  People are much more likely to be engaged in finding answers and solutions if they are not cut and dried.

The key thing is to build awareness that we are all in this together. We are all engaged in steering or paddling the organisation’s waka. Direction, purpose and harmony, and the right balance of paddlers is the key to keeping the waka afloat. If your end sinks so does mine!

6 Responses to Unemployment or under-employment?

  1. Graeme says:

    Good thinking. I think that the concept of under-employment is challenging but could bear fruit. Your comments also remind me of the importance of creativity and the tendency for our education system to lower people’s creativity. That could be from the talk by Ken Robinson.

  2. Maurice says:

    Interesting thoughts Lyall. The issue of ‘underemployment’ is not a new one for the New Zealand economy, and neither is it restricted to labour. The deregulation of the labour market in the early 90’s led quickly to the casualisation of work in many areas, crucially the low skilled. Often this has meant jobs that do not provide incomes adequate enough to sustain employees lives. Invariably it has reduced consumers’ ability to support the domestic economy. Ancillary cultures of low wages and exporting jobs in the same period have led to an outflow of skilled labour and our inability to sustain a downturn in offshore markets.

    Much of this flexible work matrix might have been worth the cost if we had invested in new technologies across the board and combined low cost labour with long term capital investment. Underemployment of capital resources may have had just as much a part to play in our current vulnerability as underemployment of labour? The relative strength of the IT industry in Canterbury, for example, demonstrates the potential of concerted investment in areas where skill and technology can bootstrap each other. Significantly there has been no parallel investment in the tourism industry – our biggest earner. Perhaps it lacked the right PR agent and failed to get registered as part of the ‘knowledge economy’? I note in contrast the tourism industry in Japan focuses at least as much on developing domestic markets as it does overseas ones. But then perhaps the kiwi bach doesn’t fit the images of Mt Cook or Queenstown anymore? Certainly more glamorous investing the the main street bubble.

    The last decade has seen an overemployment of capital in speculative markets and underemployment of capital in areas that might have given us an economy with some resilience. We often hear catch cries about the miniscule size of our economy by world standards but rarely voices that seek the disciplined investment needed to build industries to play in the big markets. But then concerted efforts hardly fit with the free market model do they? Every underemployed dog for itself.

  3. […] A rising level of unemployment is a visible symptom of the first downward cycle of recession. So is a loss of business and consumer confidence. Both reinforce the vicious spiral which leads to more unemployed. …Continue Reading… […]

  4. Mike says:

    First blog I read after wakeup from sleep today!

  5. seo athens says:

    seo athens…

    […]Unemployment or under-employment? « Lukey's Learnings[…]…

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