WelCom News
A newspaper for the Wellington and Palmerston North Catholic Dioceses

Skills mismatch creates income gap

Feature: Inequality a New Zealand crisis

Cecily McNeill

August 2013

A skills mismatch is contributing significantly to New Zealand’s inequality crisis, says Lincoln University professor of economics Paul Dalziel.

To reduce inequality the country needs to invest in developing skills that respond to the needs of a substantially changed work environment.

Workers trapped in low-wage jobs because they do not have ‘the right skills’ while local firms cannot grow because they can’t find the ‘right skilled workers’ is ‘exactly the situation we face in New Zealand’ (p.185).

It is no longer possible for unskilled workers to find reasonably well-paid jobs. With the dismantling of tariffs and other barriers to international trade, New Zealand has allowed such jobs to go to lower-waged countries.

This means the focus of the education system needs to be on helping young people to ‘develop their abilities and acquire skills that will help reduce inequality in New Zealand’ (p 184).

He says the New Zealand education system invests heavily in the core accomplishments of reading, writing, oral communication, numeracy and learning but Australia puts a high price on ‘employability skills’ – the non-technical skills and knowledge needed for effective participation in the workforce. These include being able to navigate the world of work, interact with others and get the work done enabled by ‘workplace support, culture and values, and external factors’ (p.185).

Statistics show ‘major problems’ in the country’s skill formation system with a large number of occupations having immediate and long-term skill shortages while more than a third of 35- to 39-year-olds have income levels ‘no higher than those of a full-time, minimum-wage job’.

Keeping students engaged in learning for skills development is a major challenge which a new concept of blending secondary and tertiary education is addressing. Through academies based in schools and tertiary institutes, students have individually designed learning programmes using theory and practice which enable them to move from NCEA level 2 to a trades-based qualification.

‘These courses are not second-rate options designed as a cheap solution for failing learners; rather, they encourage the pursuit of excellence as occurs in academic study’ (p 192).

But, Dalziel says, such skills need to be matched with jobs achieved with ‘good information on evolving skill demands in industry’ an issue that has ‘bedevilled industry training policy for a long time’.

He criticises a government proposal to take leadership on skills training away from the industry training organisations. ‘Leadership in industry training requires the full participation of government, the education sector, business and unions’ (p 193).

He looks to Australia where a more ambitious approach is being taken to the skills development for the technologies that reduce energy consumption and carbon emissions.

Three recent, top-level reports in this country have ‘failed to mention’ skills training, yet across the Tasman the federal government has ‘invested millions of dollars … to offer training in industry-defined green skills’ (p 194).

He says greater effort in education policy is needed to support current initiatives in skills formation.