New Zealand trade union urges income insurance amidst rising redundancies

The CTU President said New Zealand ranks among the countries with the lowest levels of redundancy protection globally.

New Zealand’s Council of Trade Unions (CTU) President Richard Wagstaff underscored the crucial need for income insurance after the release of the Productivity Commission's report on the impact of redundancy on New Zealand workers.

Wagstaff emphasised that only half of displaced workers in New Zealand secure new jobs immediately after layoff, with two-thirds finding new employment within six months. This indicates a significant gap in support for workers facing redundancy.

He pointed out that New Zealand ranks among the countries with the lowest levels of redundancy protection globally, a situation comparable to that of Paraguay and Colombia. 

“The tripartite work to address this problem through an income insurance scheme was stopped by the new Government, despite rising unemployment and the likelihood of greater supply chain disruption in the future,” Wagstaff said in a press release.

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“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. Social Insurance would have given workers the security that is commonplace in successful economies overseas,” he added.

The report also revealed that workers who find new employment take nearly three years to regain pre-layoff earnings levels, indicating a significant wage scarring effect. 

This aligns with previous OECD findings showing higher wage scarring for New Zealand workers compared to their counterparts worldwide.

“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 determined to reduce security rather than increase it.” Wagstaff added.