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War Economy

Underworked Facilities for Employment Promotion

Underworked Facilities for Employment Promotion

The Employment Act 1945 established a National Employment Service for the principal purpose of promoting and maintaining full employment. The Act provided also for a complete employment service for the placement of workers and for assisting employers to secure labour, authorised occupational readjustment, training or other assistance to workers, and provided for surveys of employment. The National Employment Service was built upon the foundations of the Industrial Manpower Division of the National Service page 543 Department, which had carried out the functions of manpower direction and control in wartime. After twelve months' activity as a separate department, the National Employment Service was amalgamated in April 1947 with the Department of Labour. The combined organisation continued to provide the same employment services, where required.

In the event, official measures to maintain full employment proved to be unnecessary, and the new employment service found that its energies had to be directed to assisting employers to find scarce labour rather than to the maintenance of full employment.

Before the war substantial numbers of men who would otherwise have been unemployed had been employed by local authorities in subsidised work, much of it connected with roading.1 Since the war there has been almost no call on local authorities to provide work specially for unemployed men. Williams wrote in 1948,2 ‘A number of short run Public Works schemes were designed by the Government and by local bodies to give employment to ex-servicemen. Under the conditions which prevailed these proved to be unnecessary and have either been scrapped or put into cold storage.’

Subsidies were continued after the war, but were paid in recognition of national responsibility for some of the work done by local authorities, rather than as part of an employment promotion scheme.

The system of subsidy payments for roading was formalised in April 1954, with the creation of the National Roads Board, which took a large portion of petrol taxation for roading purposes and paid subsidies to local authorities for their share in carrying out approved programmes of work.

These subsidies no doubt helped to keep up employment in local authorities, but, with labour now in short supply, no encouragement was given to uneconomic work. Because of the rapidly increasing use of motor vehicles, improvements in roading, in spite of high rates of expenditure, could barely keep pace with needs. Subsidies for roading, as a percentage of national income, were in any case well below what they had been before the war.

Even with the considerable increase in roading and local authority functions generally after the war, the numbers employed by all local authorities had not by 1962 reached as high as they had been in 1939. Mechanisation was being applied increasingly to roading work, and sealing of roads had reduced maintenance staffs.

1 See also pp. 4379.

2 J. W. Williams, op. cit., p. 62.

page 544

It was thirteen years after the war before the number of registered unemployed rose above 1000,1 and in the nineteen years up to 1964 there have been only six months when it has risen slightly above 1500.2 The number has never reached 1700.

There has been a very small occasional resort to job creation to absorb small pockets of local unemployment, but this has involved only a few hundred people for a month or two.

In point of fact, had employment promotion been necessary on a broader front, it must soon have become apparent that the Labour Department had been given the responsibility but not the facilities to ensure that full employment was maintained.

Employment policy would then have required special fiscal and monetary policy measures, which could only have been administered through the Treasury and the Reserve Bank; and which would no doubt have been thrashed out in the Economic Policy Committee of Cabinet and its officials committees.

It took New Zealanders a comparatively short time to become used to and to expect low levels of unemployment. In the last decade rises in the numbers of registered unemployed to only as high as 1500 have caused considerable concern to the Government, be it Labour or National. The threat by firms to terminate the employment of even 10 or 20 people was to prove effective on occasions in obtaining import licences or other favours from the Government; this in spite of the fact that very seldom would any useful workers so disengaged have had to wait more than a few weeks for a new job.

1 Even in 1952, 1953 and 1954, when net inflow of immigrants was averaging nearly 18,000 a year, predominantly in the working ages, full employment was maintained and the number of registered unemployed averaged less than 100.

2 1500 is one-sixth of 1 per cent of the labour force. Census counts have shown roughly 6000 unemployed (still well under 1 per cent of the labour force), but this includes short-term unemployed and others who do not seek the assistance of the placement service.