The Reserve Bank (RBNZ) will get a look at one of the last remaining key pieces of economic data in the coming week ahead of the first Official Cash Rate (OCR) review of the year on February 28.
On Wednesday, February 7, Statistics NZ will release the suite of labour market figures for the December quarter, including the unemployment numbers and latest wage information.
Following changes made by the new Government, the RBNZ now no longer needs to consider 'maximum sustainable employment' as part of its Policy Targets Agreement, but that makes no real difference at the moment, since the recent problem with the labour market has been that we've had the closest thing you will ever see to maximum employment - and it's been very inflationary.
Cooler conditions in what has been a raging hot labour market have been seen as vital as part of the RBNZ's attempts to get inflation back into its targeted 1% to 3% range and - explicitly, to the 2% midpoint.
The December quarter inflation figures themselves have already been released and were on the face of it very encouraging, with the Consumers Price Index (CPI) showing an annual rate of growth of 4.7%, down from 5.6% as at the September quarter. Remember, the CPI peaked at 7.3% in June 2022 but has previously been falling only slowly.
The 'headline' inflation figure for the December quarter came in well below what the RBNZ had forecast, which was 5.0%. But the RBNZ's been doing a reasonably good job of masking its delight at this (I say this tongue-in-cheek), principally because the so-called non-tradable (domestic) part of the inflation came in at 5.9%, which was actually more than the RBNZ forecast.
RBNZ's chief economist Paul Conway, breaking the RBNZ's three-month summer 'radio silence' this week with some comments on recent economic data developments pointedly said that "monetary policy is working, with the economy slowing and inflation falling. But we still have a way to go to get inflation back to the target midpoint."
That the RBNZ felt it needed to come out with some public comments now ahead of the first OCR review of the ear on February 28 was probably mostly due to the September quarter GDP figures released in mid-December, which showed a surprising 0.3% economic contraction against the RBNZ's forecast for 0.5% growth. But more than that, Stats NZ had made significant downward revisions to earlier GDP figures - and this had included the revelation that NZ in fact had a 'technical recession', with two consecutive quarters of negative GDP growth earlier in 2023.
Conway played all this down, pointing out: "...Private demand in the economy, which is more interest-rate sensitive, has mostly been revised up, with stronger consumption and business investment than first reported. In fact, levels of consumption and investment in the third quarter 2023 GDP numbers are almost exactly as estimated in the [RBNZ's] November Statement".
The upshot is that the RBNZ still has its 'hawkish' hat on and isn't yet in the mood to concede to those looking for quick interest rate relief. And that's notwithstanding the fact that the wholesale interest rate markets are still projecting for this year three (25-point) cuts to the OCR, which is currently at 5.5%.
Can and will the coming week's labour market figures do anything to change the RBNZ's mind on anything?
In reality, it would appear the RBNZ would only be significantly affected by an adverse surprise. For the record, at time of writing the markets were pricing in a very small chance that the central bank might actually raise the OCR again on February 28. So, a 'bad' result with the labour market figures might give pause for some thinking - though really, it would be a huge surprise if another OCR rise did materialise now.
What would be a 'bad' result for the RBNZ? Well, in order to keep the economy cooling and for pressure to come off inflation, the RBNZ needs a tighter jobs market - IE for the unemployment rate to go up. It is starting to do this. The unemployment rate went from 3.4% as of the March 2023 quarter to 3.6% for June 2023 and 3.9% as of September 2023.
In its most recent forecast contained in the November Monetary Policy Statement (MPS), the RBNZ forecast unemployment of 4.2% for the December quarter, then rising to 4.6% by the March 2024 quarter, 4.9% by June 2024 and 5.0% by September 2024. The RBNZ forecasts a peak level of unemployment of 5.2% in June 2025.
A key reason for the tightening of the jobs market to date has been the massive influx of labour from offshore, with Stats NZ reporting that there was a nearly 130,000 net gain of migrants in the 12 months to November.
RBNZ's Conway noted this week that "strong inward migration has clearly helped alleviate labour shortages".
The influential NZIER quarterly survey of business opinion (QSBO) for the December quarter survey continued to show a sharp easing in labour shortages, "with firms reporting that it is easier to find both skilled and unskilled labour".
"This result presents a significant shift from a year ago when shortages for both types of labour were very acute," the NZIER said.
And yet, there's still signs of resilience out there in the labour market. Stat's NZ's monthly employment indicators for December showed a 0.2% seasonally adjusted monthly climb in filled job numbers.
Against this, job ads are continuing to tumble, according to the most recent BNZ/SEEK Employment Report. It showed that on a seasonally adjusted basis ads have now fallen in 13 of the last 16 months to be 37% down on the peak reported back in August 2022.
Anyway, does all this mean the RBNZ is in for an unpleasant surprise with the unemployment numbers?
Economists don't think so. I didn't have all the economists' previews available at time of writing this, but the major bank economists, at least, seem to be in reasonable concurrence with the RBNZ, picking between 4.2% and 4.4%.
Westpac senior economist Michael Gordon, who is picking a 4.2% unemployment rate, says if the results pan out as expected, "the RBNZ will most likely stick with its recent messaging: we’re making progress on taming inflation, but there’s still a long way to go, and the greater risk is in taking their foot off the brakes prematurely".
He says although the requirement to “support maximum sustainable employment” has now been removed from the RBNZ’s mandate, the labour market figures will still hold significance.
"The unemployment rate is one of the best real-time gauges of the economy (that is, it’s generally robust to any future data revisions). The RBNZ will look to the unemployment rate as a gauge of how hot the economy is running, and hence how quickly those stubborn inflationary pressures will recede."
ANZ economist Henry Russell and chief economist Sharon Zollner, who are picking a 4.3% unemployment rate, say they expect the labour market remained on a loosening trajectory in the fourth quarter, "with capacity indicators continuing to suggest slack has emerged and the labour market is no longer in an inflationary state".
"While moderating labour demand as the economy slows has played a role, the ongoing surge in labour supply continues to be the key driver. Record net migration inflows have resolved reported labour constraints."
They say they don’t expect the labour market data to be a game changer for the RBNZ’s February 28 OCR meeting.
"Despite the relative resilience of labour demand, the ongoing supply expansion due to record-high migration continues to see spare capacity emerge across the labour market. As a result, wage pressures are now gradually easing, which will contribute to a moderation in domestic inflation over 2024. Forward-looking labour market indicators continue to point to a rapid loosening across 2024," they say.
"...Monetary policy is working, though the RBNZ needs to see a sustained period of slack emerge to be confident that domestic inflation pressures will dissipate. Our current estimate is that by August, conditions will be in place for the RBNZ to begin easing policy settings."
*This article was first published in our email for paying subscribers early on Friday morning. See here for more details and how to subscribe.
74 Comments
the recent problem with the labour market has been that we've had the closest thing you will ever see to maximum employment - and it's been very inflationary
I thought it had been clear that the majority of our inflation initially was driven on the supply side. And continued inflation is non-tradable driven by high local business costs, mostly the OCR.
If we were struggling from demand driven inflation, then surely the $10b per month we were writing down for mostly existing houses would be much higher on the list than the incomes derived from that money created. So what we're really saying is, we don't care for business and choke it of access to credit. Business owners should look to profit from wage suppression rather than having a greater share in the economy because that would mean *gasp* house prices would need to fall.
Perhaps the fact that our demand for off shore goods is about 18% higher than the income we receive from off shore buyers is a better place to start, and where the demand lies for that additional 18% of money, because it has to come from somewhere, we've already spent it - in many cases before it even exists. Tick it up on the credit card because my house is worth so much when I eventually sell it. Employed aren't creating new money when they work, they are trading their time and productivity for an amount of money which already exists.
I fail to see how higher employment has much at all to do with solving this bout of inflation, it's competition for existing money. This may result in higher costs, sure, but the money already exists in the economy. IF this high inflation was demand driven, then the inflationary pressure was the creation of the money in the first place, and higher wages and higher employment are simply a consequence of that. How dare the worker, the business owner, expect a share of that money, it was for houses, and houses only.
"We created all of this money for houses and we cannot bare the fact that it may end up in the hands of those pesky workers! Take away their jobs and blame them."
Your argument, while containing truisms, neglects the inflationary impact of COVID on the labour component of supply. A large percentage of absent workers led to both labour scarcity and reduced/slowed production. Unemployment fell, and wages increased in such an environment, and it took more labour to produce the same (or less) items.
This phenomenon was part of the "transitory" component of COVID era inflation, which we are obviously now coming out of.
Yes but again if you follow the money… many business were not allowed to fail. There was no natural attrition of work during this time, money was injected into the economy supporting thousands of jobs which would have otherwise disappeared. We’re now saying that it’s the workers fault, for expecting the nominal profits of their labour to be shared while they start to go backwards in real terms.
If however housing is not to be the source of collateral for the ever expanding money supply what will take its place? We can suggest productive industry but the reality is we havnt managed to achieve that in 40 plus years of trying and there is the also the time factor....such a transfer of collateral would need to occur gradually.
Far better (and more practical) imo is the use of taxation to reduce the demand from the economy by targeting those fuelling the inflationary discretionary spending patterns....though even that comes with considerable risk.
The inflation, with many drivers, was more primarily caused by the increase in supply of money which, yes, in part, can be attributed to borrowers, is more so relative to the removal of LVR restrictions by the RBNZ as well as the FLP encouraging money creation, and the LSAP flooding the country with additional money. Irrespective of those that borrowed I can only stem the primary source to the RBNZ and now we are where we are while Orr gets 800k per annum and sits atop his ivory tower promising to be the saviour of a crisis of his own making.
Assuming the strange economic growth model of ‘growth for growth’s sake’ continues for the next few years, there exist a couple of interesting spanners that could be thrown into the unemployment works:
- One of the largest generations in human history is retiring en masse and given declining fertility rates, are there enough children to replace them? How will this affect unemployment over the next few years? In addition, how will it affect immigration levels as vacancies from retiring boomers continue to open up?
- How is AI going to affect the job market? Is it making people more productive? Are people already losing jobs as a result?
- How many people here trust the projected GDP growth figures coming from China? Another impression one gets are the preliminaries to a colossal meltdown. Reduced demand from China could hammer employment in NZ, not only in primary production but also residential development.
It’s a fascinating time to be alive. Change in the 21st century seems to be occurring at an increased pace.
Societies where the ruler has everything and the population has nothing except what the ruler permits are very stable societies. The Egyptian pharoahs ruled for millenia, the Chinese boast of 2000 (or more) years of civilisation - all of it with an absolute ruler.
Social issues occur when your neighbour has just a little more than you and doesn't appear to deserve it.
Does anyone have stats on how many people are on the unemployment benefit, not just those that are currently seeking work?
It would be very interesting to see the total number of people on each type of benefit / superannuation etc vs the total number of people working.
Thats the June 2023 fact sheet, so totally out of date. This is the December one
https://msd.govt.nz/documents/about-msd-and-our-work/publications-resou…
299,243 people on benefits when Labour took over, now there are 378,311 on benefits - a 26% increase.
Aside from the increase in those on JobSeeker Work Ready, there is a big increase in the number on the JobSeeker Health & Disability, I wonder how so many people suddenly became incapacitated in the last few years??? And a huge increase in the number of those on the Single Parents benefit, although we should not be surprised that when we pay poor single women a lot of money to have children, more poor single women pump out children. This is apparently "solving child poverty" go figure.
Dear lord.
Hate to be the bearer of bad news but the NZ birth rate is currently the lowest it’s been for your entire life. The fact that there are more “poor single women pumping out children” says more about the average demographic of young NZ society than your imaginary bludger. NZ is broke, there is no rich boom of children coming to buy your house.
If you actually cared to research for 2 minutes, which I can tell you cbf, you’d find that the NZ government directly funds landlords more than it funds parents raising children. Then there’s a guise that this is somehow subsidising peoples lives by paying rent for a house built in the 1920s that someone decided to bet $1.5m on then complains when poor young single mothers can’t afford $1000pw to cover the rent.
I imagine the job seeker benefit will continue to skyrocket as we flood the country with immigrant workers all the while trash construction and remove thousands of public jobs. Very clever from both red and blue.
Could be a very negative fiscal drag, anyone 57-60 unemployed tends to find it very difficult to re-enter the workforce on much more then minimum wages, thus likely to stay on jobseeker until Super starts.
To me the most inflationary thing in NZ over the last 10 years has been house prices and rent, these drive the demand for wage increases. We could have avoided a lot of this by limiting credit along DTI lines.
There's no evidence implementing a DTI resolves those issues.
It may hinder asset bubble growth, but at the same time it reduces new housing supply, increases competition for rentals, and reduces the number of people able to purchase a house.
It's a tool to give the system more stability, not improve things for most individuals within it.
All depends on your expectations in life doesn't it. I will have no problem on just super and will still be able to take a cruise or two during the year. Peoples idea of a comfortable retirement varies considerably. Currently I'm living on way less than the super and I have years to go before it kicks in.
It’s interesting that the Westpac note observes a recent discrepancy between the monthly filled jobs data and the HLFS results. This is something I’ve been thinking about. The filled jobs data come from the employers but HLFS is from surveying households. If a substantial chunk of job growth is coming from recent migrants, it might be harder to capture that in the household survey and we could see that divergence continue. To put it crudely: the survey results may depend a lot on whether or not you happen to knock on the door of a house with 20 recent migrants (and whether they feel comfortable answering a government survey accurately).
Interesting, I was put through the HLFS 2 years or so ago. they are very persistant as my security cameras had the guy on them 2 times before he got us home. the houses are chosen by random computer selection that is to cancel social economic bias.
With so many people now on contract style agreements, I wonder how much impact reduced hours is also having, not unemployed but 30 hours rather than normal 40. No overtime etc etc
I can see a huge number of migrants returning home in the next 2 years... There is not enough work and their skills are often too low to justify $28 per hour.
Sure. My point is that they’re sampling households to infer information about the population. Even if you sample those households perfectly the noise will increase if the population is less evenly distributed within those houses. As an extreme example, imagine if the country had two households - one with 100 people and the other with 1. Sampling the houses at random will produce extremely noisy results! These effects will be much smaller in reality but it does get trickier for things like unemployment where it’s a small percentage of the population to begin with.
Sure but the people running the surveys have degrees in stats, they understand margin of error better than most.
I guess is vissable vs non-vissable unemployment, I know a lot of IT contractors looking for work at the moment. They will have income but way less then the past.
From the article: The unemployment rate went from 3.4% as of the March 2023 quarter to 3.6% for June 2023 and 3.9% as of September 2023.
That's 6 months of steady contraction.
From the article: The RBNZ is forecasting
4.2% Q4,
4.6% Q1
4.9% Q2
5.0% Q3
(peak 5.2% in June 2025)
Like IT GUY is saying, I too am seeing pretty strict cost control in the ICT sector. Few layoffs but contactor rates have been slashed hard, work is harder to get, fixed price work is seeing people slit their throats to get the business, and ICT firms are not replacing and/or growing their staff like they were. Construction contraction is underway big time but may not show up until the next quarter.
Given the RBNZ's tends to be at least one quarter behind the eight ball, you could be correct.
Just read it. But he's wrong on a few points. Take this one:
Unfortunately, economists aren’t allowed to look at the most recent data and extrapolate — even if that would more accurately reflect our lived experience.
Economist's raison d'etre is to look closely at past events, thoroughly understand them, and use that knowledge to predict what is likely to happen in the near, short, medium and distance future. This what they get paid for! And it applies to the RBNZ's economists too.
He goes on to say:
The orthodox view on inflation is that it is like a forest fire that will destroy an economy if left unchecked, so it is prudent to keep hosing it down until the last embers are extinguished.
Again, he is wrong. It is not the 'orthodox' view (meaning following or conforming to the traditional or generally accepted rules or beliefs of a religion, philosophy, or practice). It is folksy wisdom created by columns like his. Modern economists would never describe inflation like that. Not ever!
But overall not a bad article. (But shouldn't he be giving credit to many interest.co.nz posters for much of what he says? ;-) )
Economist's raison d'etre is to look closely at past events, thoroughly understand them, and use that knowledge to predict what is likely to happen in the near, short, medium and distance future. This what they get paid for! And it applies to the RBNZ's economists too.
I think you're giving economists more credit than they deserve.
They fail completely to understand past events, the conditions, causal factors and beliefs of each era. They fail to join the dots anywhere and are totally besotted with their economic dogma. They fail to observe reality, question and adjust their science, instead reality must fit their models. The majority are all paid spruikers held up to be prophets.
It's difficult to get a man to understand something when his salary depends on not understanding it
What have we become? A society where we think the answer to prices going up faster than wages is to make more people unemployed in the hope that workers will learn their place and settle for less? The answer to a cost of living crisis is to decrease wages? What society would leave workers idle to cope with a lack of supply?!?
It's not like we don't have the data to demonstrate that prices rises are not driven by wages. Our biggest sector (wholesale at $120bn) has wage costs of less than 10% for eg. The total wage rise across the whole bloody private sector in NZ over the last year is *the same* as the increase in business debt costs!!! But, sure it's wages that are driving up prices - quick put up the cost of debt.
I truly despair.
Our biggest sector (wholesale at $120bn) has wage costs of less than 10% for eg.
The issue with using this as a metric is that wholesale is only an intermediary for items produced by someone else. It's high volume, low margin, and only makes up a small portion of the costs involved in consumables. It's really the labour costs for the items handled by the wholesalers (and to a lesser extent the retailers) you'd want to determine.
Your point about the inflationary costs of higher interests though is valid, it's yet another cost to be passed on.
Yes, that's true re: wholesale. Doesn't stop the wholesale sector making a 8% profit margin consistently though.
Staff costs as % of total costs by sector below...
- Agriculture, Forestry and Fishing 17%
- Arts, Recreation and Other Services 28%
- Construction 19%
- Education and Training 55%
- Electricity, Gas, Water and Waste Services 12%
- Health Care and Social Assistance 44%
- Information Media and Telecommunications 21%
- Manufacturing 16%
- Mining 19%
- Professional, Scientific, Technical, Administrative and Support Services 40%
- Rental, Hiring and Real Estate Services 10%
- Retail Trade and Accommodation 14%
- Transport, Postal and Warehousing 23%
- Wholesale Trade 7%
Wholesalers margins usually get to remain fairly consistent, as they're usually putting a uniform margin on what's passing through them.
One thing to consider is the cumulative effect of the increased labour costs. You buy a good retail, and the retailers labour cost is only 14%. But the items cost includes the labour costs of every hand it passes through, and every service/utility along the way, miner, manufacturer, financier, transporter, wholesaler, etc.
We still have economy comprised of people, who at every level were impeded by COVID. If robots did everything, much less of a problem.
I think that's flawed thinking? Yes, wages are a cumulative effect but that happens on the initial pricing event. Any subsequent increases to wages impact the price at a ratio of which wages make up cost of goods. Assume 3 businesses are involved along the supply chain for a $250 retail item.
- A) $20 wages, $20 materials, 20% GP = $50
- B) $30 wages, $50 cost from A, $20 other materials, 20% GP = $125
- C) $25 wages, $125 cost from B, $50 other materials, 20% GP = $250
$95 of wages with $23.75 margin.
Assume wages double.
- A) $40 wages, $20 materials, 20% GP = $75
- B) $60 wages, $75 cost from A, $20 other materials, 20% GP = $193.75
- C) $50 wages, $193.75 cost from B, $50 other materials, 20% GP = $367.19
That's a 47% increase in price just from the labour component across the full supply chain.
Very interesting numbers
I don’t agree with the 19% for construction
Some thing is missing like almost everything
what about the labour cost of the council inspection
what about the labour cost if the architect snd the engineer
what about the concrete truck drivers and the aggregate plant labour
what about the sawmiller and the truck driver
scaffolding is almost all labour
what about over ordering so the precious labour doesn’t run out of nails or gib same with over ordering concrete to save time
what about the dumping of recyclable’s because labour is too expensive to sort it
its not just the cost of labour it’s the efficiency of the construction process
too many short weeks with labour related costs adding to a job
from my experience labour and labour related costs are over 50 % of construction
Around 70% of an economy is Services, not Goods. The major cost in delivering Services is Labour, or wages. So while Goods inflation may be decreasing, Services inflation is not. This is the issue globally.
https://wolfstreet.com/2024/01/26/on-the-surface-pce-inflation-is-encou…
Which would suggest that no one should be receiving inflation adjusted wages unless they can prove their productivity has increased.
Also suggests that more money doesn't make anyone richer. Maybe they just double the wages of the bottom or halve the wages of the top, or both. Is Orr going to be poorer at $400k? Are you going to be poorer if your home is half the price?
Maybe management and CEO's should prove their own productivity has increased rather than financial metrics.
What's Orr's personal productivity metric? What are politicians personal productivity metric? What's your personal productivity metric? Can you pump out more if you're already maxed out?
I won't be holding my breath. (I need it to rage at such foolishness.)
Man alive! I am sick to death of folksy, conventional wisdom which gets repeated ad nauseum but in fact has little or no justification in recent times.
Where id this nonsense come from? It was often used - without any basis in fact - to bash labor unions for the benefit of greedy businesses. How dare they seek to share in the profits their labor helped create. But people, giving in to envy, just lapped it up. Too bad that, like trickle-down, it was almost total b.s. Alas, years after the western world has bashed labor into a subservient roll, this nonsense lives on.
It should be self evident that if a business wants to retain it's margin, any input cost increase needs to be factored into their pricing.
Business profits over the COVID era have been mixed (some lower, some higher), but the average is roughly constant. If you wanted to make an argument against wages fuelling inflation, you'd expect overall for profits to be much lower - so it'd be fair to say they've been passed on in the form of higher prices.
I spose we can split hairs over what "very" entails.
re ... "Business profits over the COVID era have been mixed (some lower, some higher), but the average is roughly constant."
Sure it has. The big NZ banks didn't make record profits. No? Wait! Unilever? I could go on and on. While some businesses got hammered, other businesses were making out like bandits. This made the 'average', as averages often are, a meaningless figure.
But I'm still fascinated at your assertion. Could you produce the source from whence it came?
Interest.co.nz. There's been a few articles about COVID era business profits over the past 12-24 months.
Oh, and my own observations, interacting with dozens of various businesses and business owners.
If you actually care to read the forum guidelines Chris, it open welcomes posters to share their own experiences, for the benefit of the community. Helps add context to the discussion. You seem to want to treat everything like a uni essay, and getting super personal in absence of actual reasoned discussion. You're obviously bright, but your behaviour is not the hallmark of a decent thinker.
re ... "It should be self evident that if a business wants to retain it's margin, any input cost increase needs to be factored into their pricing."
I guess if one immediately thinks only of an extremely simple, one-person, labor only, business facing an increase in food prices it makes perfect sense. But it's mainly folksy wisdom that appeals to those to whom critical thinking is just too hard.
At no point am I saying labor is the only component. It's percentage of a businesses cost varies greatly by business and sector.
I've employed up to 100 people at times, across several businesses. IT, hospo, agriculture and construction.
It's not folksy, it's experiential, my survival resultant of my ability to understand with reasonable clarity the mechanisms of how things work. My opinions and preferences largely irrelevant.
There's also a couple of shiny degrees if academia is your mark of deployed intelligence.
Since wages are never a 1:1 ratio to goods or service, while wage increases drive higher prices, it shouldn't result in prices outstripping the wages unless businesses are gouging.
Assume an item has $30 wage component across the full supply chain, $20 materials. That's $50 COG. Business adds 20% GP to cover all other overheads and profit, sells for $62.50. Wages across supply chain increase 10%. $33 + $20 = $53. Add 20% GP that's $66.25, a 6% increase.
What needs to be considered is not just the cost of labour, but also the output of the labour. If you're producing something, and COVID shortages mean production needs to be halted, you're incurring the same labour costs but producing less.
Personally, watching how companies have operated, I am staggered many more businesses haven't fallen over in the past few years. What should take 6 months, has taken 18. But then this cost looks to have just been passed on, financed by cheap money.
Good point. Labor costs are generally fixed costs, and by law don't go away when production dies down unless people are made redundant.
In our industry though, when things are quiet (like they are at the moment) our price focus is to at the very least make our recoveries at the plant. We don't suddenly go "well our throughput is lower so let's jack up our prices to compensate". Our business has a diverse enough product offering that other product categories carry enough margin to keep us afloat so there is that.
only those actively seeking work are counted ...in the survey.
"Unemployment relates to everyone in the working-age population who, during the reference week, were not employed, were available for work, and:
had actively sought work in the past four weeks ending with the reference week (only looking at job adverts is not counted as actively seeking) or
had a new job to start within four weeks.
https://www.stats.govt.nz/methods/household-labour-force-survey-sources…
Feasibly many can work, (e.g. high skill wfh roles), but do not have access to work and are denied access to jobs.
Not many people have housing assets for a business loan either. When our business investment is tied up with houses and our economy is mostly a housing bubble then productivity and new business growth takes a sharp dive and so do opportunities for expansion & job accessibility dwindles.
Social mobility is way down also; where finding a house at all even to rent is extremely difficult in many regions. So again reduce social mobility equals reduced access to jobs that may be out there. Easy to see in places like Otago & Lakes, Bay of Plenty, Wellington, Auckland etc.
On the bright side you still feel superior to those denied access to work because you tell yourself the discrimination must be justified.
So many people don't apply to jobs because they literally cannot physically access any available. This mismatch is well known and in countries with higher social mobility opportunities it is quite small. In places with housing crisis though in the affordable bracket, well in other words, NZ is quite fkd enough already you can stop dking around.
Also Protip: In case you didnt realize an increase in the number of old people requiring medical care will also increase number of underpaid carers on jobseeker benefits for them in the role of nurses but being paid literally below minimum wage. Good monetary sense to pay less for more nurses. They will have the responsibility of doing all tasks nurses should with no workers rights, no holidays, no sick leave and below minimum wage pay.
People like you actually encourage and want more of this because of how much the govt can abuse people financially and physically. It saves the govt money and fills the massive medical workforce shortages.
I don't think we're going back to the sustained low rates environment we saw between the financial crisis and Covid-19 because demography won't support that. There should be an echo boom of the millennial generation being born now across the OECD, instead fertility rates are collapsing seemingly ever lower.
Even the places that immigrants moved from like China, India, Philippines etc. now have fertility rates well under the population replacement rate.
But real unemployment is and has been 11.2% for some time. So will we see it hit 12% real unemployment?
You have to take into account the 90-Day Hire & Fire Act. Which means the NZ Workforce has now been casualised. People will be on 90-day contracts on low wages. A disposable workforce in direct competition with 200,000+ low skilled immigrants on temporary work visas. Oh boy! What fun!!
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