Last week we were rocked by the news that unemployment in our region had hit 8.1%, well above the nationwide rate of 7.3%. It was a lot to take in. Just as the Government and treasury officials were telling us that everything was coming right and that unemployment wouldn’t get any worse, reality struck and what those of us working in our community had suspected was proven correct.

What I found particularly shocking was the fact that our local unemployment rate had shot passed the national rate. Traditionally we have kept our heads above water during recessionary times due to our strong public sector particularly in the health, education, research and defence sectors.

It’s clichéd but nevertheless true that although we don’t experience the dizzying highs during high growth periods, the trade off is that we usually don’t dive into the full depths of economic depression when business slows down. Our mix of public and private sectors seems to have just the right balance to create a sustainable economy.

A leap in local unemployment probably wasn’t that much of a surprise, though, when looking back over some of our recent headlines. Changes in Government policy have seen jobs slashed at Palmerston North hospital since the middle of last year and more recently at Massey University. Research and Development came under attack right from the election. Palmerston North has borne the brunt of the Government’s decision to take the razor to the public sector.

This also hurts the private sector. Not only is there less money coming into our local economy as laid-off workers reign in their spending, cuts to education erode the available skill base and cuts to health care effect worker productivity. The short term gain of spending less money now leads us down a path towards long term pain as the effects of losing the services that money paid for take effect.

On the same day as the unemployment figures were announced, Palmerston North was hit again by Telecom making 32 call-centre staff redundant. As of yet these workers have no redundancy to soften the blow. Hopefully their union can negotiate with Telecom’s contractor Sitel for an appropriate package. Sitel is a very healthy multi-national business that operates in countries where redundancy pay is a legislated right so there is every reason to be optimistic.

Redundancy pay should be a legislated right here in New Zealand too. Labour MP Darien Fenton has a private member’s bill to that effect due to have its first reading very soon. How the Government votes on that bill will be a material test of their commitment to ordinary working New Zealanders.  

First pubished in the Tribune, February 2010