Workers need redundancy income insurance – report

Workers need redundancy income insurance – report | Insurance Business New Zealand

Insurance News

Workers need redundancy income insurance – report

Only 50% of displaced workers find new jobs immediately after being laid off

Insurance News

By
Abigail Adriatico

A report by the Productivity Commission has found that because of the impact of redundancy on New Zealand workers, they are in need of the protection that is provided by income insurance.

“New Zealand workers are among those with the lowest levels of redundancy protection in the world, with protection levels just below those of Paraguay and Colombia,” Council of Trade Unions (CTU) president Richard Wagstaff told Mirage News.

According to the report, about 50% of displaced workers find new jobs immediately after being laid off, while only two-thirds were able to do so within six months of their job displacement.

It also found that it takes employees who take on a new job almost three years to get their earnings back to the same level as they previously had before being laid off. This supported findings by the Organisation for Economic Co-operation and Development (OECD) that showed how New Zealand employees had a higher wage scarring compared to other workers in the world.

Wagstaff noted that the efforts to address the problem through an income insurance scheme was halted by the new government, even as the issues of unemployment rate increased and the possibility of disruption in the supply chain came about.

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

Wagstaff added that the new government’s moves have caused problems for New Zealand workers.

“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,” he said.

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