Redundancy: End of the Road or a Fresh Start

Have you lost your job or are you worried about doing so? You no doubt had a rush of hope after the Job Summit – everything was going to be okay. At one stage I was expecting to see our unemployed diligently hacking out a cycle track worthy of Wellington’s mountain biking elite. I pictured John Key at the front of the line, pick and shovel over either shoulder, singing "Hi Ho, Hi Ho, It’s Off to Work We Go…", with Paula Bennett, our very own Snow White, bringing up the rear.

Our unemployment release valve blows

The prospects for keeping down the growth of our unemployment queues have taken a turn for the worse. Late last year we were hoping that unemployment would only reach 6% at the depth of the current recession. A key factor in keeping the unemployment rate from blowing out was the assumption that Australia’s economy would keep chugging along and absorb much of our surplus labour. But with Australia’s prospects suddenly looking a lot less rosy we can no longer look to our biggest neighbour to alleviate our problem.

A silver lining to jobs lost to Asia

The rampant Kiwi dollar is likely to encourage more manufacturers to relocate production to low cost Asian countries. In fact, several manufacturers had already announced plans to move production before the latest Kiwi dollar rally. This will mean more job losses in an industry that has been shedding jobs over the past few years. In April our iconic whiteware producer Fisher and Paykel signalled their intention to relocate 350 jobs to Thailand. Next was Sleepyhead with a possible 250 jobs, followed by Dynamic Controls with another 200 jobs, both to China.