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Massey's Alison Brook looks at how we are responding to a world-scale natural disaster that is killing jobs super-fast and what the resulting long-term unemployment will will do to economic prospects

Massey's Alison Brook looks at how we are responding to a world-scale natural disaster that is killing jobs super-fast and what the resulting long-term unemployment will will do to economic prospects
Source: Photo by The New York Public Library on Unsplash

The economic effect of the coronavirus is an unprecedented event, described by ex-Fed chairman Ben Bernake as more like a natural disaster than a recession, and because of this, it has required unprecedented fiscal responses. As the world moved into lockdown, one of the ways many economies around the world have tried to protect their economies is through wage protection schemes.

The frantic attempts to keep workers connected with their place of employment in many parts of the world is mind-boggling in its scale:

  • Under New Zealand’s wage subsidy the Government had paid out $10.6 billion of the wage subsidy to 1.72 million people by 1 May (more than half of the total employed workforce).
  • Australia’s JobKeeper subsidy is expected to provide AU$70 billion in support and at the end of April covering 3.3 million employees.
  • In the UK they have an employee furlough scheme where the government pays workers 80 percent of their salary to stay at home and not work. It is currently paying out to around 7.5 million employees, a quarter of Britain’s private sector workforce. The scheme is being extended to October 2020 although from August workers can return to their jobs on a part-time basis.
  • Similar schemes are in place in Germany, France and Ireland providing support for many millions more workers (10 million in Germany, 12 million in France and 450,000 in Ireland).

By contrast, in the US where workers are primarily directed onto unemployment benefits rather than retaining their connection with their employment, the immediate effects on jobless claims have been stark:

Recent research from Pew Research shows one-third of Americans live in households where someone has lost a job or taken a pay cut (or both) due to the coronavirus outbreak.

Wage subsidies are not a new thing and have been studied since the 1930s although their effectiveness has been shown to be limited. Time will tell if the current efforts are effective in retaining jobs once the wage subsidy schemes come to an end or whether it just delays the inevitable job losses to follow. In New Zealand’s case, this effect will become evident after the first tranche of the subsidy ends on 9th June to be replaced by a modified subsidy until September. Many are predicting, despite the government’s optimism, that redundancies will soar.

The relationship between recessions and unemployment

According to StatsNZ, the employment impacts of the last major recession in New Zealand (the Global Financial Crisis) were:

  • people worked fewer hours
  • the number of available jobs fell
  • unemployment rose
  • more people moved into study
  • there were fewer, and smaller, wage rises
  • labour market turnover slowed

The link between recessions and unemployment is well documented. Unemployment continues to rise after the recession is technically over. And unemployment rates take a long time, often many years, to recover to pre-recessionary levels:

Sources: Stats NZ and RBNZ based on NZ’s Classical Real GDP Business Cycles

Treasury forecasts estimate unemployment reaching a peak 9.8 percent by September this year, but dropping to just 5.7 percent by 2022 but this looks increasingly optimistic with many businesses in the retail and tourism sector unable to trade at anywhere near previous levels. Those on the jobseeker benefit alone jumped from 145,000 before the lockdown to over 184,000 at the start of May, higher than the peak of the GFC at 174,630.

It is hard to see how the economy will absorb all of the jobs lost due to whole industries essentially disappearing or reshaping overnight. According to MBIE’s latest Jobs Online Report (Jobs Online measures changes in online job advertisements from four internet job boards: SEEK, Trade Me Jobs, the Education Gazette and Kiwi Health Jobs. Online job advertisements are a proxy for all job advertisements.) “Online advertisements fell by 6.4 percent during the March 2020 quarter, and by 12.5 percent between March 2019 and March 2020.”

Long-term unemployment

The benefits of minimising immediate job losses are clear; workers without jobs consume less as their incomes fall, further exacerbating the economic fallout. There is a more worrying consequence than immediate job losses, however. Past recessions have shown us that a percentage of those who lose their jobs may struggle to find another job even years down the track. And the effect appears to be much worse when there is a long, slow economic recovery rather than a strong rebound.

Long-term unemployment is particularly a risk when cyclical unemployment (for instance, from a recession) meets structural unemployment (when the worker’s skills don’t meet the needs of the current market). Long-term unemployment grew sharply in New Zealand from the mid-1980s, but since then has been falling, finally recovering to previous levels by 2000. That is, until the GFC hit in 2008.

Data source: OECD

The social costs of losing this connection to work is very high. A review of research in Quartz magazine points to evidence that long term unemployed are five times more likely to be living in poverty than their employed counterparts. Even when they find a new job they tend to earn less than they were previously and often take a step down the career ladder.

There is no doubt the wage subsidy scheme was necessary and hopefully will have flattened the potential unemployment curve just as New Zealand’s actions on the public health front have effectively squashed the pandemic curve. The final tally though, in terms of the implications for businesses and workers, is so far unclearbut will be felt for years to come.


*Alison Brook is from the Knowledge Exchange Hub at the Massey University campus at Albany, Auckland. She is on the GDPLive team. This article is a post from the GDPLive blog, and is here with permission. The New Zealand GDPLive resource can also be accessed here.

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95 Comments

14
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Till now focus of every government has been to save life and contain panedemic and going forward will look at economy revival. No one knows the damage this virus has done and is doing to health at the same time no one also knows the affect of Lockdown/Panedemic or virus on economy - At the moment all predections/data are based on assumption but with world being totally shut down for few months and economy virtually comming to a halt, worse case scenario cannot be ruled out.

As many are saying that it will get worse before getting better sometime in future.

Will be recession for some and depression for many.

This is a very good and very sad article.

12
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UBI becomes more necessary as each week goes by. Jordan Peterson recently said the anecdote to anarchy is the individual's freedom to innovate. Just 'surviving' as an individual or a household has worn too thin. We need to rid ourselves of the stigma of poverty and unemployment. Just as Wuhan's shutdown regarding the coronavirus gave witness to lessons we needed to heed, the US social disruption also does.

This could be a double edge sword though. For many it would be phew, no longer need to innovate as I've got guaranteed income. For others yet it will be great, I have guaranteed income, what I relief, I can now think about how to innovate.

The Kennedy line of what can I do for my country vs what will my country do for me comes to mind with this.

10
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Innovation is massively over-rated. One good idea per lifetime per 10,000 workers is sufficient.

“The older I get the more I admire and crave competence, just simple competence, in any field from adultery to zoology.” H.L. Mencken.

I was a computer programmer for 45 years; heaven protect me from innovations and that includes my own.

When innovation is defined as 'do more with less' I can only agree with you. But real innovation is hard, because it essentially involves risk. For too long we have focussed on 'business as usual' which as other comments below point out, is an extremely narrow business model that has engendered cyclical dependencies. So we do need to diversify our portfolios! And that innovation, means trying new things...

Did you not read the Quartz article?

"long term unemployed are five times more likely to be living in poverty than their employed counterparts."

Changing the name of 'unemployment benefit' to 'UBI' doesn't fix anything, people need good paying jobs, not welfare that locks them into long term poverty.

I think the average American would now be happy to split back into North and South. Dems to the South with Biden as president and Reps to the North with Trump as president. A big wall in between. I wonder what it would look like after 20 years?

10
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FB
You sure you got your north and south right way round?
Don't think those rednecks in Trump's heartland south would be too happy about ceding to Democrats.

It was the other way around in the days of Abraham Lincoln, but they seemed to have switched places somewhere along the line. Perhaps it is why the Repubs are blue and the Dems are red.

I actually reckon you could have most of the West Coast (perhaps not the folk in Oregon), NY and a few others team up with the friendly folk north of the border and create a new United States of Canada.

Destructive Affect on Economy....... Headline says it all.

Destruction.

George Megalogenis is worth a read

The danger in this pandemic is that Australia has no tangible economic reward for flattening the infection curve while the virus continues to threaten the US, Europe and China.

https://www.smh.com.au/national/lead-and-we-follow-country-of-over-achie...

Not much you can do about it, other than see to it that your own people are not threatened by the virus, as well as the economic fall out. Australia and New Zealand will benefit for the actions we have taken.

15
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Nz won't be spared economically regardless of what govt says or does. Going to be a rough ride..

Of course not, but we will be in a fitter state to do it, while around the world the damned thing will likely rage on for quite a while

We may not have the virus but we aren't avoiding any of the economic fallout given we are an exporting nation at a time when consumption is drastically falling.

Did I say we would avoid economic fallout? No, never have, through all of this. But it is far better to be dealing with that without the virus.
But there will be some things we will be able to take advantage of because we have a virus free population

Sure. What are these things we are better able to take advantage of?

Movie making, some manufacturing, IT, food producing and processing, even a bit of tourism, but nowhere near to the heights it was and just about anything else you can think of where a health stamp of approval will come in handy and the processes needed can be relatively mobile. There will be some gains to be made.
The alternative is to just roll over and play dead, off you go, you first.

Tourism and food production are export dependent industries that are extremely vulnerable to current economic conditions. Manufacturing is an absolute laugh, how many car manufacturers do we have here?
IT and movies maybe viable I don't know much about those industries.
No one said to just give up but your assertion that Australia and NZ has some "advantages" is ridiculous considering how much we rely on exporting to China.

NZ only needs 1% of the world's up market tourism to make a fortune. Even if all the Kiwis like myself who have had European holidays in the last few years spend similar in NZ then we will do very well.

The catch 22.
Better to “protect all those gains”

I'm very pleased at the recent stimulus package for the creative industries - the so-called 'weightless economies' (there's nothing weightless about them, they're just not a linear factory model). It was refreshing to hear the recent W.H.O. report mentioned by PM that refers to 3000 independent studies on the wider economic/ wellbeing benefits of the creative industries. They've had a hard time in this country being recognised as having benefit, I suspect because they so often don't fit into 'if this, then that' logic.

.. and what are the traditional growth industries in recessions? It used to be called 'lipstick and entertainment' ... and education of course.

I'm old enough to have suffered a few recessions now, so I'd rather be a pragmatic optimist than a doom and gloomer..

Spoken like a true Socialist

Not that I subscribe to those outdated definitions of 'left' and 'right', but what precisely is wrong with socialism? And please don't give me those tired old references to Stalin or Mao.. I'm asking, what is wrong with considering the interrelationships between business and wider well-being as a society?

I'm not for one moment advocating the forcible re-nationalisation of assets (didn't do Zimbabwe much good), but neither do I think that business is the be-all and end-all of a functioning society. Business has a place, just not at the expense of everything else. Does that make me a socialist?

It takes away individual freedom to chose their own destiny. stagnates advancement in science, ingenuity, and general well-being of humanity

I'm envious of your certainty.
At the furthest extremes all political systems oppress people. Labels are pretty meaningless, but I appreciate that simplicity is a great comfort to some.

Culture has the same issues as well...and religion.

Newton, Galileo and Kepler, the founders of modern science, were all religious people who believed the existence of God was self evident:

Johannes Kepler, "Science is the process of thinking God's thoughts after Him."

They were all products of their time too.

You have the same problems when swinging too far the other way too.

There are many problems with socialism that any honest read of the last 100 years of history shows, but in the context of an economics forum the main problem of socialism is that it has a proven record of bankrupting nations.

Freedom is a much better choice.

I don't think we can look to the US for leadership. I believe there is hope for island nations who can now leverage our substantial advantage. Some are making substantial progress (e.g. Iceland, Ireland etc.) and we should offer every assistance to eliminate the virus and join our bubbles once our criteria have been met.

The old ways of doing things and unions that had been formed have been rendered irrelevant. What matters now is building new partnerships.

"is so far unclearbut will be felt for years to come."

Only unclear to economists, Alison.

This was a trigger event, the pre-loading was already overtopping the dam. This site could perhaps investigate the bigger picture, and meld the marco-inevitable trend with this little hiatus. Then we might have a discussion with perspective.

New Zealand finds itself with a very specific and narrow Business Model.
The question we need an answer to is: :
"Is what he had before suitable for what will come afterwards, or not?"
I can find any number of people who will tell me "Mate! This will all blow over; the virus will just become a way of life and things will get back to normal in no time at all"
They are from the "Yes, What we had is suitable for the future" opinion.
But are they right?
Maybe.
It's worked for the 40 odd years since Lange last changed our Model. So why not!
But what if they are wrong?
I don't envy Ardern, or whoever we put in in September, the task of deciding which way to go because it's going to be crucial that they set us going in the right direction, whichever one that is.
Now. Which of us wants to be PM....?!

15
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I agree. Next election would be a great one to lose. The depression won't play out well for any government.

On a personal level, the decisions are easy. On a country-wide level, they are far from easy. At a time when the majority seems to prefer the status quo and National is veering to the Left, I’d leave it to Cindy and Co to manage the outcomes of the responses to date.

We don’t need Government to intervene and plan our lives. Their job is structural. Promote the structure of a competitive free economy.

With a strong safety net, including well functioning universal heallthcare.

15
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Can't help but feel this is a moment in time we will all remember, if perhaps for different reasons. The tough will probably get tougher, the weak will probably get weaker, the workers will find more work & the bottom half of the boomers will probably be forced into retirement. We know of many our age (in their 60's) who have got nothing.
Our business has taken a 50% blow to its revenue (this year to date) so we have our work cut out for us keeping our heads above water til Christmas.
On a brighter note, it was great seeing everyone out & about over the past 2-3 weeks, it gives us some hope. But having been through four of these things previously we know how long & hard they are to recover from. That being said, we wish everyone all the very best out there.

I agree that tail end Boomers like me will soon go to early retirement or working in Mitre 10. I’m very comfortable with that, especially if its a viable lifestyle choice based on support to keep us out of the workforce so younger ones can find work more easily. BTW How can people be in their 60s with nothing?

Your last sentence has always boggled my mind. Why are there so many struggling financially when they're past their income earning years??

Yes and the average wage now is about double the price of a house when they (boomers) were 25. So any debt that had, would have easily been inflated away over the years. But that can't be possible for current generations (but of course I could be completely wrong!)

For example, the current generation of people who are 25 would expect to be earning on average $1.2 million dollars a year when they are 65 to have the same experience that the baby boomers have had (who say purchased the average house price of $30k when they were 25 and with now an average wage of $60K compared to average house in NZ now which is $600K...double that you get $1.2million).

You know how boomers go on about smashed avo, gadgets and holidays taken by millennials?.. Hypocrisy.

Oh how the tables have turned lol

I worked in debt restructuring and insolvency and can offer my experience. Almost all my clients, without exception were divorced and found it very difficult to recover. Although men disproportionately lost more wealth in the divorce, the vast majority of women maintained sole care for children in exchange for keeping the former family home. I am just stating facts here guys, not offering a moral opinion.

Anyway, typically the women although they got the home also had big debts to buy out the house, had a low income, part time hours due to childcare, no retirement savings and inability to keep up with home maintenance. Generally I saw them when a major expense like fixing a roof was needed which they couldn't afford. You would be amazed at how many people simply sell a house when the roof needs replacing.

Anyway, plain and simple, they just didn't have the cashflow or equity to be able to sell an old house needing work and afford something newer, smaller and low maintenance. The new, smaller low maintenance houses cost just as much plus there's just not enough of them.

So the old model of downsizing the family home is going to trip lots of people up now, especially if the value if the big family home falls.

The divorced men on the other hand I often saw having saved a good deposit in their 50s and on ok incomes but with less time to pay off a house. It was no easier for them than the women with the old family home. The single guys were after the same small, low maintenance affordable homes of which there are very few in NZ. There were also quite a few men who gave up on home ownership and decided to rent instead and keep working to save money. They had a better quality of life due to more cashflow. Some moved in with kids, like living in a sleepout in the garden. Many of them had modest needs and were happy settling for less if it meant less debt. It wasn't easy for either partner though.

Reverse mortgages were extremely unpopular and most were unwilling to do this, instead trying to offload the family home at a discount to their kids. I think more will have to consider reverse mortgages now if equity allows though.

Poverty has real costs.

I'm old enough to say that by the time you hit sixty the quality of your life choices really hits home .

YDB - I am a boomer and can asure you that there are plenty of Boomers that are poor/broke. I am not one myself and own multiple properties. The broke boomers I know fall into three camps and sometimes in all camps.
1. Divorved and never recovered financially/given up hope after the trauma of loosing their family/children. ( we hold the record of divorces in our generation )
2. Business failures from the reccessions we have been through particularly the 1988-1991 one.
3. Being made redundant by technology/Government changes ( Rogernomics ) and the inability/social stigma of being a failure to move on and retrain.
It would be correct to say the Boomer generation has had benefits of it's time but also many difficult economic/social adjustment times as well

10
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I know of a number that 'stayed together for the kids' etc or just plain decided to call their partnership quits in their late 40's; early 50's and it's a hard road back from 'half of enough'. One house into two doesn't give enough for 2 without crippling debt for one, or perhaps both, parties. That's why many have a home, but 'nothing' on a net basis.
Others, plain got some decisions in life wrong. Again, I know those who realised 10 years back 'I don't have enough" and tried one of many 'get rich' alternatives and some have worked, some haven't. I'll suggest those that reckon they lucked onto "the one that was guaranteed to work", are about to find out they should have cashed in a year+ ago.
But having 'nothing' in your 60's isn't as rare as it used to be. ie; their parents' generation.

But surely the examples you've provided are the minority? If not, what the hell were people thinking compared to how people think now?

14
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Reality is that the economic fallout, shouldn’t have been as bad as it is going to be!
The lockdown was extended far too long and the so-called pandemic has been nothing of the sort inNZ.
Next to no one in Hospital at any time and not a single death to anyone under 62 and to no one with reasonable health!
For the actions of our Socialist government we are going to have far more people dead due to mental health than this Covid19 was ever going to kill.
It is BS that if we hadn’t locked everyone down there would be thousands dead!
1200 odd positive tests and hundreds of thousands of tests and death toll so low and only to the vulnerable.
To put it into perspective during the first stage of lockdown there was 4200 people die in NZ that wasn’t Covid19 so FFS it has been an exercise that has not been executed well at all, despite many people being so easily led by the Prime Minister and the media who have been in her pocket.
Fortunately it hasn’t affected us financially whatsoever, however I do feel very sorry for other business people who have worked hard and now find that they will need to start again and lay staff off!

I must check back through his writing of the last decade and see if he's been bemoaning the other evident roads to serfdom spanning them.

13
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Just to clarify... you basically disagree with the science and believe that despite the fact that this pandemic has sent the rest of the world to hell in a handbasket, NZ could've somehow escaped the same harm after closing out borders because we're protected by magical fairies?

So you believe that science is always right... and that all countries responded the same with same factors of outcome... and that we should follow the next Dodo and insist we can fly!

Science is not always right. That's kinda the point of the scientific model - validation of hypothesis through recreating exactly the same conditions. Obviously recreating the same conditions everywhere is impossible. Which leaves us probability - is it probable that given 200 asymptomatic covid carriers who were recently discovered in Wuhan that there is a proportional chance of the same in NZ? What is the liklihood of havoc of a second wave upon an otherwise unprotected population? You tell me.. Science isn't everything, but at least it can explain why Dodo's didn't fly. Or more to the point, how vulnerable they were when they encountered conditions they couldn't adapt quickly enough to.

That's exactly what has happened in Japan with no lockdown. An island with sea borders just like NZ.

Japan has appallingly low rates of testing - a ratio of of 1:7600 See:https://www.businessinsider.com.au/why-japan-cases-of-coronavirus-are-so...

Talking of probabilities, I'm not sure if Japan is a sure bet just yet.

11
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You really need to extract yourself from your own little echo chamber TM2. You should have a real hard look at what happened in other countries that have been slower to respond to COVID19... Such as Spain, Italy and even your vaunted Sweden.
The reason why the death toll was/is so low in NZ, is BECAUSE, we actioned a swift and decisive response.
But if you are somehow advocating that as a society we don’t look after our weak and vulnerable and just leave them to die, then all I can do is shake my head at your lack of humanity and your cold-hearted greed and be pleased we don’t live in the country you advocate.

HubHub, you need to look at what has happened in NZ!!!!
We closed the borders too slow and the government knows that but won’t admit it!
For all of the testing there has been next to no one in hospital and so many that should have had operations didn’t have them and therefore more people will die than were ever to die from Covid19.
It has not been a killer virus in NZ and is certainLy not as bad as the normal winter flu in NZ!!
During the first stage of Lockdown 4200 people died of other things in NZ but Ardern is t making mention of this!
The decision to extend the lockdown longer than it should’ve has made businesses go broke and unemployment is going to be growing over the next few months.
We have been at level 2 for a wee while now and not a single case and yet people need to sign in to wherever they go, and are being controlled!
This lockdown needs to finish now and people should realise that we have been lucky and you can not compare the countries overseas as we are an island and don’t have the same conditions as over there.

"people should realise that we have been lucky and you can not compare the countries overseas as we are an island and don’t have the same conditions as over there."

TM2,
So if I understand you correctly, you're saying New Zealand is different ...

"This lockdown needs to finish now"

Are you an experienced certified epidemiologist on novel viruses and contagious diseases & hence suitably qualified to make this judgement?

Who needs to be an epidemiologist ... haven't you heard what others are saying.

And can you please name one epidemiologist who is experienced in a pandemic like this who is still alive. There has never been a pandemic like this for the last 100 years, you could of.course call one up in a seance

"Who needs to be an epidemiologist ... haven't you heard what others are saying."

I am not a medical professional and it is not my area of expertise. So I choose to heed the advice of medical experts.

"And can you please name one epidemiologist who is experienced in a pandemic like this who is still alive. There has never been a pandemic like this for the last 100 years,"

Yes you are correct, that there has not been a global pandemic for the last 100 years.

However, there have been medical experts who experienced other novel viruses such as SARS, MERS, avian flu, swine flu, ebola etc. These medical experts have dealt with the pandemics that hit their countries. There are many infectious disease experts monitoring outbreaks. Many of these medical experts are still alive.

I experienced SARS, & avian flu firsthand whilst living in Asia in 2003. We also had health warnings about MERS & swine flu whilst I was living there. There is ongoing vigilance since SARS for monitoring outbreaks of infectious diseases. COVID19 is another experience with a highly contagious disease, yet this one is more concerning as carriers are asymptomatic for long periods of time. Asian countries, which experienced these pandemics previously have generally had lower infection rates than many nations which were inexperienced and slow to respond such as the US, UK, Spain & Italy. I choose to trust the medical experts and their judgement. I choose to let the medical experts do their job and l choose to ignore those who are not suitably experienced / qualified to make such medical judgements.

I choose to heed the advice of medical experts only on medical matters.

CN, firstly a virologist in Auckland stated that this was not a killer virus but only a middle of the road one.
He said there were far worse ones.
Secondly the so-called experts said that there could be 28,000 deaths in Nz and in Oz up to 150,000!!!,
We really haven’t had a single death to anyone that wasn’t a geriatric and had underlying health issues that were already vulnerable to even the winter flu!!!!
Oz who was said by an expert to be likely to have 150,000 deaths they have had about 100 and they were all to vulnerable people with health issues.
This is a very divisive subject, but what I will say is that I hope you aren’t close to anyone that goes broke or isn’t around due to the consequences of this unnecessary lockdown!
It is BS that the government states is a 1 in 100 hundred year virus, utter BS, there will be far worse in the years ahead!

You are aware that the expected number of deaths with no isolation and the number of deaths with isolation measures taken are two different measures? As you speak of them as if they were the same and act shocked that they are not.

Where did I say we should not have been locked down?
We didn’t know what we had so of course it helped.
Reality is that we have had small no.s infected and of the ones infected symptoms were minor at worst.
Most that tested positive weren’t even hospitalised.

Agree with you TM our lockdown was too severe, however can see it's a contentious issue.

I came back from overseas and was appalled at the non existent border control. I think that is the one big failure. If the govt had shut the borders earlier I think we could've avoided such a severe lockdown. I wish they'd done this in Feb. By late March it was already too late.

I got the virus in February. Never been so sick in my life. Three main debilitating symptoms were outrageous fever, persistent cough and inability to breathe. I'm young and fit but I can see how it could knock older people out. I was bedridden for weeks, something that's never happened to me in my life, putting me in self isolation. I don't think I spread it to anyone.

It's like the worst flu you can ever imagine but yes probably only risky if you're already unwell.

Someone else I know has had it twice and ended up in hospital as they had a heart issue.

The economic impact of govt decisions is a major concern for me so I've been making proactive decisions to hopefully pre empt things.

80 to 90 percent experience mild symptoms. Sorry to hear about your experience TO

Thanks and thanks to TM. Wouldn't wish cv19 on worst enemy, wasn't a normal flu IMHO but hey I lived to tell the tale. If I hadn't got it I might not have had such sympathy for the lockdown which was imposed on us.

Having said that though, despite getting it, I still think the lockdown was way too severe than it needed to be. Should've just shut the borders fast. NZ missed an opportunity others didn't have simply being an isolated island nation. Should've played that to our advantage early.

However, on the other hand I got over the covid whereas plenty of others overseas not so lucky. Good luck to all interest readers, hope we all get through and survive with shirts on our backs from the economic disaster bearing down.

Sorry that you were unwell.
You clearly caught it while you were overseas rather than NZ
When our no.s were right down we should’ve been opening up

I agree with the man. It wasn't swift enough.

We should've shut borders in Feb which is what a lot of people were calling for the govt to do.

Poor delivery again by this govt but no surprise cos they think the money tree will just keep on giving.

Unfortunately socialists have no idea how wealth is created. In socialist economic thought the means of production is assumed. They have no idea where it came from or why it is the size it is (or isn't).

When socialists talk about wealth, picture in your head an enormous cake that falls from the sky, their discussion is invariably about rights to the cake, how much cake one should get over another and how to distribute the cake. What you never hear is any intelligent discussion about where the cake came from or how to make the cake bigger for everyone.

Unfortunately we in NZ seem to have a capitalism for thee, socialism for me paradigm infecting things. Pension, landlord subsidies etc gladly imbibed while nominally advocating capitalism for others.

Remember it only takes ONE infected person to start potentially infecting a large population again. That's the nature of a highly CONTAGIOUS disease.

1) Remember these super spreaders of COVID-19?
i) UK - https://www.theguardian.com/world/2020/feb/10/super-spreader-brought-cor...
ii) South Korea - https://www.livescience.com/coronavirus-superspreader-south-korea-church...
iii) South Korea - at last count there were 119 infections from this single person causing a potential second wave (and second potential lockdown) - https://www.news.com.au/world/asia/ominous-warning-for-world-governments...

2) After 16 days of no new cases of community transmission of COVID19, Hong Kong just had its first case. The woman had no recent travel history - https://www.scmp.com/news/hong-kong/health-environment/article/3086810/c...

3) Oh by the way, here is someone who was asymptomatic for TEN WEEKS - https://www.tvnz.co.nz/one-news/world/woman-ruby-princess-cruise-ship-li...

Remember, we are flattening the curve to reduce the risk of overwhelming the healthcare system, and healthcare workers. Yes, let's all get on with our lives as best we can under the circumstances, and let's all remember to remain vigilant.

Great comment CN.

"we are flattening the curve to reduce the risk"

That was an original stated goal but there is no curve now.

A potential for a curve is not an actual curve though is it.

It more common than you think. One bad decision can wipe out 10 good and that is before you take into account ill heath ( both physical or mental). Each downturn destroys wealth and plans that may not recover. Then there is the fallout of divorce.

"One bad decision can wipe out 10 good"

Yes. Seen people who lost their financial security, who were previously billionaires ...

https://www.rankred.com/billionaires-who-are-now-broke/

Think of all those small and medium sized business owners in NZ, who were financially secure prior to COVID19, and now who are fighting for the financial survival of their business - for instance, businesses in tourism related businesses in Queenstown, Wanaka, etc

That take a gamble in your 60's makes sense if you expect your Super to be means tested in the future.

The means test as applied in Australia would not affect many in NZ as the test is mainly income based and doesn’t include the value of the residential home. If introduced in NZ it would encourage old people to stay in large expensive homes and tap cash from reverse mortgages.

Would be better to means test it on the value of one's primary residence(s).

Thereby enhancing the mansion effect which I'm planning for by looking to buy a bigger house.

Ha ha.

I dunno, a lot of vacuuming.

Easily fixed with a leaf blower.

10
up

The jobs super killer is not the virus, it's collection of policies we have collectively agreed to in order to reduce the loss of life.

But clearly the issue was and remains the dependency on construction and tourism. We have to diversify out economy away from these industries if we dont want super charged economic cycles in the future.

Can only agree. There's that 'innovation' word again.. trying some approaches that are different. Crikey.

Looking at Sweden it seems that you where damned if you did and damned if you didn't in regards to the lockdown. Either way you would have an economic impact.

Ideas??

The main effect of the pandemic lockdown I can see is that it will hasten a process that had already started.

What I'm talking about is AI and the robotisation of many jobs, resulting in mass unemployment. It was coming anyway. Now that day will arrive much, much sooner thanks to Covid-19 and the massive economic impacts felt worldwide. I think there's potential for another generational wealth gap to occur for people simply of a certain age or in certain roles. Unless they're supported into higher education and skills training. Education has always been the pathway from poverty and I still believe this.

I also agree we need a UBI and get rid of a top heavy administration system which exists only to dish out the welfare. I can't see how a UBI would cost more than the welfare system we already have. Surely dishing out the same amount to everyone and getting rid of the administrative burden which currently exists would not be more expensive than what we've got?

One unspoken benefit of a UBI is that former prisoners upon release would have an instant safety net, which would hopefully limit a return to crime. Having worked in social services I witnessed some devastating stories of prisoners who set up living under bridges upon release as they were homeless, totally unemployable and had no economic means. I'm not a socialist leftie or proponent of restorative justice, I like to see crime punished as much as the next ACT voter.

However, I do think if offenders are going to be released anyway we're better off protecting the community by giving them a UBI just like anyone else would receive it.

Rant over.

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