Redundant worker asks: What am I if I don't have my job?

Friday, 22 May 2020

Kelly Bertrand says her job was her life - and then she was made redundant.

Until last month, Kelly Bertrand had worked at the New Zealand Woman’s Weekly for almost all her adult life.

She joined the magazine as a staff writer, working her way up to become deputy editor in 2019.

“My whole identity was wrapped up in my job. I loved my job, and the New Zealand Woman’s Weekly. I started at 20, had my 21st there.”

She said she watched friends go overseas, marry, buy houses while she devoted herself to her career.

“I’m single, I don’t have a house… my job was my cool thing. It didn’t matter if I didn’t have that stuff because I had a cool job.”

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Then, she and her Bauer Media colleagues were sent a text summoning them to a Zoom meeting, with half an hour's notice.

At that meeting, since referred to as the 'Zoom of doom', they were told that Bauer was closing its New Zealand operations and all their jobs were being made redundant with immediate effect.

The magazine Bertrand and her colleagues had spent the past week working on would never reach readers.

We had no idea it was coming… you kind of go through a grieving process, without being insensitive.

Air New Zealand carried just 15,000 passengers in April.

'You go through every emotion under the sun. I was left wondering who am I if I don’t have that job?”’

While it was Bertrand’s first experience of being made redundant, she is not alone.

In the past week, Fletcher Building has revealed plans to lay off 1500 of its workers, 1000 of whom are in roles based in New Zealand. Air New Zealand confirmed it was cutting 1300 roles.

Earlier in the month, Event Cinemas revealed its plans to restructure - it is believed it wants to reduce labour costs by half. Bunnings proposed to close seven stores.

In the first full week of level 4 lockdown, an extra 9470 people signed up to the Jobseeker Support benefit, of whom 8569 were 'work-ready'. In the week ended May 15, the most recent for which data is available, another 1600 began receiving it.

People can only qualify for Jobseeker support if they do not have a working partner, so the number of people who have lost work is likely to be much higher.

“The big headline number is the tip of the iceberg,” Infometrics chief forecaster Gareth Kiernan said.

'What we don’t read about is the small businesses where the number is nowhere near as exciting as Air New Zealand or Fletchers.”

A tally of the reported redundancies so far had already topped 10,000, he said.

There was likely to be more pain ahead when the businesses who had been getting the wage subsidy had that money run out. At the moment, the wage subsidy is supporting nearly 60 per cent of the New Zealand labour force.

Kelly Bertrand says she grieved the loss of her job but now has never been happier.

Many businesses would find they no longer had the customer base they had before the lockdown and would need to downsize to meet the new market.

The extension of the wage subsidy to the hardest hit firms would buy a few more months but then there would be another wave, he said.

The Employers and Manufacturers Association (EMA) has reported a surge in inquiries about restructuring and redundancy processes.

Chief Executive Brett O’Riley said businesses were facing tough decisions.

'Calls to our AdviceLine on restructuring and redundancy since March are now double the usual rate of inquiries. Since the lockdown began on March 25 until yesterday we’ve fielded 650 calls about restructure and redundancy. That represents nearly 10 percent of our membership base,' he said.

'We’ve already had almost 200 inquiries this month with nearly two full working weeks left in May. With the deadline for the first tranche of the wage subsidy approaching in June, I expect the figure for May to exceed the 250 inquiries we had in March.'

O’Riley said while redundancies in big firms were the most visible, the majority of EMA members were small to medium-sized businesses and that was where the most damage would occur when the current wage subsidy ran out and the tighter restrictions for phase two of the subsidy kicked in.

'While many businesses are able to operate at something near normal at alert level 2, there are also many businesses that can’t open or remain uneconomic under Level 2 restrictions. That strengthens the case for moving to level 1 as soon as possible if the health conditions allow,' he said.

The association's head of advocacy Alan McDonald said even businesses that did not meet the 50 per cent revenue drop requirement to continue to receive the wage subsidy were suffering to the point where they needed to cut staff numbers.

McDonald said there had been a lack of assistance with cashflow.

The Government-backed loan scheme had not delivered what was intended, he said, and the Inland Revenue-administered scheme that offers loans of $10,000 plus $1800 per employee did not go far enough.

A business with between five and 10 employees would typically have outgoings of $14,000 a month and only half of that would be wage related, he said.

While level 2 might feel 'normal' for many people, businesses were still suffering and getting to level 1 should be a priority, unless there were compelling health reasons not to.

Independent economist Tony Alexander said he had expected there would be a period of 'weeding out' beginning this year where businesses adjusted to a new future.

'I thought that would last two or three years - now all of that weeding out is going to happen this year. It's sort of like Bauer, they used Covid-19 as the trigger and so too will the entirety of the business sector in New Zealand.'

80s CRUNCH REVISITED?

The last peak in unemployment was at the end of the 1980s and beginning of the 1990s.

But Alexander said this was not a repeat of the 1980s. 'In the 1980s we were trying to fix the errors of the 1970s.'

The 1980s were also marked by high inflation and high interest rates, the removal of protections given to manufacturers and farmers. There had also been significant growth in debt, which was not the case this time. 'It's not like the 1980s all over again.'

Another economist, Shamubeel Eaqub, said what was seen with Fletcher, Air New Zealand and other employers cutting staff so far was not surprising.

“I expect that trickle to turn into a torrent come June… it’s only been a couple of months and we are already at the level of unemployment experienced in the global financial crisis.'

He said it was right that the wage subsidy was wound down, even if it meant more job losses. It was not sustainable to support businesses that no longer had a customer base. “You can’t create businesses that are on state life support.'

Kiernan said the biggest risk for New Zealand was that people had to battle for years to get back into the workforce, as they did in the early 1990s.

There was a risk of having large numbers of long-term unemployed, he said, because the longer people were out of the workforce the harder it was to get in.

Each year that went by, more people joined the pool of available workers and the less likely employers were to consider hiring the unemployed. “If you’re out of work for three months versus someone who’s out of work for 12 months they might think there must be something wrong with the person who’s been out of work for 12 months and be less likely to take them on.”

Women are more likely to lose jobs through the crisis because they are represented in higher proportions in hospitality, tourism and retail. There are lower numbers of women in workforces that will benefit from the Government’s plans to promote “shovel-ready” projects,

Kiernan said older workers made redundant, or who had to close their businesses, might opt out of the workforce entirely. More older people had remained in the workforce in recent years, he said, and it would be harder for them to regain employment if there was a huge pool of people looking for work.

Eaqub agreed higher unemployment would affect young and old workers the most. “Given the scale of unemployment it will have quite a big impact.”

Alexander said there was a risk of people becoming long-term unemployed, in any recession. But he said in the 1980s people were 'thrown on the scrapheap' whereas the Government has already committed money for retraining those affected this time. That had been the highlight of this year's Budget, he said.

Kiernan said for some, it could be an opportunity to move into higher paid and more skilled work. Tourism and hospitality jobs had been particular affected and they were traditionally not well paid, he said.

“There might be an opportunity to change the focus and upskill people in that area.. they might get back into the workforce in future at a higher skill level.”

Bertrand says she’s now worked through her distress at the loss of her job and is eyeing a new future.

She has launched a new website, Capsule, aimed at New Zealand women.

She said it was almost a blessing to have been made redundant and what might prove to be a transformational time for New Zealand.

'It’s very much a new world at the moment. Everyone is trying to figure out what the new normal is. It’s almost the best time to be made redundant because we have carte blanche, we’ve been given the right to try anything and if it doesn’t work, that’s okay.'

So far, the response has been very positive. “To have it go so well has been a major confidence boost,” she said.

“It shows we’re good at our job we now how to tell stories. The magazines were reaching a million women combined. Those skills don’t vanish just because Bauer is gone. I haven’t been this happy in a long time.”