Government told to revive talks for income insurance scheme
Only half of displaced employees in New Zealand are able to find new jobs immediately after getting laid off, according to the latest report from the Productivity Commission.
The commission's report looked into the impact of involuntary layoffs to employees, including their reemployment experience.
It revealed that 50% of involuntary laid off staff "immediately" find jobs, before rising to 70% within six months.
Another 20% of displaced employees exit the labour market entirely through retirement or long-term unemployment, while 10% emigrate.
Among those who got reemployed, it would take them up to three years to get back to their pre-layoff levels of earnings, according to the report.
The findings come amid widespread reports of layoffs across the world. In New Zealand, employers such as the NZ Post have announced that they are laying off hundreds of employees, while some universities have unveiled plans to cut some staff.
Need for income insurance
The Productivity Commission's report underscores the need for income insurance in New Zealand, according to the Council of Trade Unions (CTU).
"As New Zealand deals with a challenging global economy, now should be the time to give workers more income and economic security – rather than less," said CTU president Richard Wagstaff in a statement.
"Social Insurance would have given workers the security that is commonplace in successful economies overseas."
There was a proposal for an income insurance scheme by the previous government, CTU, and Business New Zealand, but this was halted by the new coalition government, according to the CTU president.
"With the government cancelling social insurance, bringing back 90-day trials, ending Fair Pay Agreements, and cutting the minimum wage and welfare in real terms, they seemed to be determined to reduce security rather than increase it," Wagstaff said.
