Decent Work and COVID-19: A Comparative Labour Market Analysis

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This report provides a comprehensive analysis of the labour market, focusing particularly on young workers aged 15-24 in New Zealand. It examines the concept of 'decent work' through parameters such as safe work environments, social dialogue, and job stability, highlighting the challenges faced by young workers, including high injury rates, non-standard working hours, and unemployment. The study further investigates the responses of Sweden, the USA, and New Zealand to the COVID-19 pandemic, comparing their approaches based on political and economic ideologies (social democracy vs. neoliberalism). It explores the impact of these responses on employment relations, unemployment rates, and specific sectors, such as accommodation and food services, which disproportionately affect female workers. The report references various sources, including statistical data from New Zealand, and research papers, to support its findings and provides a comparative analysis of the labor market dynamics in the three countries.
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Question one
The labour market group that will be focus of this study is the one comprising young workers
in New Zealand, in the 15-24 age group. The oversimplification of the labour market that is
espoused by the neoliberalists suggests, among other things, that wages earned by
individuals depend upon how much formal education and on-the-job training they have
received, and completely ignores the non-competitive structures of society which tilt the
scales in favour of those born into privilege (Cassim, 1982). The young workers labour
market starkly reflects the failure of the neoclassical economic theories to adequately explain
the marginalization of a large proportion of today’s young people. It is critical, therefore, to
examine the young workers’ experience of decent work, on three key parameters as laid
down by Ferraro et al. (2015) – Safe Work Environment, Social Dialogue, and Stablity and
Security of Work.
A safe work environment aims to reduce both physical and psycho-social hazards that
threaten workers’ well-being. There is a critical need in many organisations to allocate
adequate resources to protect workers (Ferraro et al., 2015). Unfortunately, as statistics
reveal, the 15-24 age group has the highest incidence of work-related injury claims in the
working population, second only to the 75+ age group (Stats NZ, 2019). This puts them in a
high-risk category. There are a number of contributing factors to this. Research shows that a
prime reason is insufficient training provided to young workers before they are asked to
perform their duties. More than 50% of injuries are known to occur within the first five months
on the job (Breslin et al., 2003). The other factor is the high number of non-standard hours
worked by young people, often on weekends, early mornings, and at night. As much as 72%
of workers in this age group reported having worked unsocial hours (Stats NZ, 2019). This
leads to fatigues and feelings of isolation which can lead to injuries. Another possible
reason, which needs further research, is the high turnover rate in these workers, as high as
25.7% in September 2018 quarter (MBIE, 2020). It is likely that young workers tend to take
more risks to show they are keen and willing to take on the role on a permanent basis.
Workers must be able to express freely their views on matters which affect them in the
workplace, whether directly or indirectly, through trade unions (Ferraro et al., 2015). Unions
have been a key part of the tripartite agreement of industrial relations since 1894, and
membership of unions provides employees a way of collective bargaining which is fair and
mandated by law. In New Zealand, workers in the 15-24 age group were the second highest
group in terms of not belonging to a union, closely following the 25-34s (Figure.nz, n.d.). In
the post-Covid landscape, belonging to a union is more important than ever, as there are
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numerous complaints of unfair dismissals, safety breaches, etc. Unions have now become
an “enforcement agency” (Oram, 2020). Young workers not in unions are missing out on this
vital source of support. The reasons why we don’t see greater proportion of young workers in
unions are complex. Research seems to suggest that there is a greater belief in
individualistic progress and distrust of institutions shared by young people which might lead
them away from trade unions (Mrozowicki et al., 2016). It would be interesting to see more
research on this issue. Whatever might be the reasons, not belonging to unions might also
deprive young people from getting the living wage and protection against unfair dismissals.
Stability is a key component of decent work, as stable income provides us with self-respect,
a feeling of security, apart from taking care of basic needs like food and shelter. Loss of
employment, equally, can lead to anxiety, stress and devaluation of one's accumulated
knowledge and experience (Ferraro et al., 2015). Young workers, particularly 15 - 24 year
olds, have the highest unemployment rate of 10% among all age groups (Stats NZ, 2020).
This is likely to reach levels closer to 15% in the 20 - 24 age group as the economy shrinks
due to Covid (MBIE, 2020). The segmented labour market model tells us that due to
structural inequalities in society, many young people have the cards stacked heavily against
them trying to enter a decent career path. The 90 day trial period is also used as a
convenient tool to hire and fire young people, although now this is only permitted for firms
with less than 20 people. This is reflected in the turnover statistics, where young people are
over-represented. There is a 5 percentage point reduction in labour force participation
among young workers in the June 2020 Quarter. This is, sadly, reflected in the
disproportionately high job losses in the Accommodation and Food Services, traditionally
favoured by young people (CTU, 2020).
Question Two
The responses of countries to the Covid-19 pandemic and the associated fall out on
employment relations have been underpinned by the political and economic ideologies held
by their respective governments. This study will focus on Sweden, USA and New Zealand,
as three countries with varied approaches towards this pandemic and examine this in some
detail.
Sweden has a centre-left government led by a Prime Minister who has held power since
2014. The last government, however, was formed with a very weak mandate, and only after
the PM promised to cut taxes, relax Sweden’s strict employment laws, and reform the rental
housing market – all in a bid to attract voters from the centre right (Henley, 2019). Sweden
has for long been regarded as a social democracy, which has implemented left-leaning
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policies to strengthen their social infrastructure (“Politics of Sweden”, n.d.). Social
democracy asserts that all citizens should be able to share equally in the standards of living
that the society is capable of delivering (Dow, 1993). In reality, though, we find Sweden has
largely moved away from this principle in its response to Covid -19. The measures imposed
to fight the pandemic relies primarily on voluntary compliance to public health
recommendations regarding social distancing (Hensvik & Skans, 2020). Unfortunately, the
public health announcements were not communicated in different languages. This had an
adverse impact on immigrant communities, many of whom don’t speak Swedish (Rambaree
& Nässén, 2020). Immigrant workers make up the majority of the 6.8% unemployed in
Sweden, and have been disproportionately affected by the pandemic. The government
introduced measures such as two weeks paid sick leave, wage subsidy, and unemployment
insurance to alleviate the impact on workers. But the wage subsidy only covered people who
have been in the job for at least 3 months (Hensvik & Skans, 2020). This may have had the
effect of excluding students and new entrants to the labour market from the safety net. So, in
effect, Sweden did put the economy ahead of public health, despite some mitigating
measures.
Successive US governments in recent history have been entrenched in neoliberalism as the
main ideology. Neoliberalism has been described as a system which allows governments to
protect the free market, instead of trying to achieve full employment and protecting citizens
against the exigencies of the free market (Wrenn, 2019). It lets segmented labour markets
flourish and ensures that underpaid workers have to depend upon government assistance to
get the equivalent of a living wage (Brosnan et al., 1989). In USA, the current government is
republican, and research shows that republicans as a group tend not to believe in
mainstream science to the same extent as democrats (van Holm et al., 2020). The
combination of a neoliberalist ideology and a libertarian attitude towards restrictions imposed
by public health authorities has meant that USA has ended up with the worst of both worlds.
While trying to put the economy ahead of public health, it has succeeded in destroying both
equally. Unemployment reached 14.7% in mid-April, and youth, minorities, and people with
low educational achievement were the hardest hit. Unemployment among teenagers was as
high as 30%. There is very little trade union protection to vulnerable workers. Due to
restrictive laws, only 7.1% of private sector workers in US are members of unions
(McNicholas et al., 2020). The additional unemployment benefit of $600.00 per week paid
during the current crisis has resulted in many workers earning substantially more than they
did when employed (Houseman, 2020). This shows how the free market economy is
propped up by the welfare payments.
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New Zealand is a social democracy, with a government that leans towards the left with
progressive policies like raising minimum wage and is now talking about introducing fair pay
agreements, pay transparency, etc. In its covid-19 response, the government was clear
about the absolute priority of saving lives. The best economic response was considered to
be a strong health response (Douglas, 2020). Considering NZ has the second lowest death
rate of countries in OECD, while faring better than Europe in terms of drop in GDP in the
June quarter (Pullar-Strecker, 2020), shows that this approach has worked according to
plan. However, some sectors of the economy were affected much more severely, and these
were ones which traditionally employ women as a majority of their staff. In the six months to
June 2020, the number of women in paid employment dropped by as much as 30%, while
around 27,000 women lost their jobs between the March and the June quarters of this year.
Accommodation and Food Services, Health Care and Social Assistance, are two sectors that
saw the largest decline in number of employees, most of whom are female temporary
workers (CTU, 2020). Stability and security of work, one of the cornerstones of decent work
(Ferraro et al., 2015), have been lost for many female workers in NZ. Although the
government has provided a lot of assistance with the wage subsidy scheme and the
extended sick leave provision, but, as the Finance Minister said not every single job would
be saved (RNZ, 2020).
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References
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