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Employment hit a record high today. Here’s why National should worry – and what they can do about it.

The unemployment numbers came out today, showing a job market in its best state since the GFC hit eight years ago. While this is undeniably good for the National government, Duncan Greive argues they shouldn’t expect the good times to last – but suggests one weird trick which might help them do so.

In The Rise of the Robots, named Business Book of the year for 2015 by renowned leftist rag theFinancial Times, author Martin Ford sketches in painstaking detail a looming apocalypse. It’s also the world we’re now living in: one in which huge numbers of routine jobs are being taken by code or machines every year, with those  which haven’t yet been automated under consistent assault from businesses seeking to remove humans from the production of goods and provision of services.

The near future he sketches throughout is one in which any job with an element of routine to it is likely to be swallowed up, with catastrophic impacts on global employment.

It is truly the most horrific and electrifying read, an imminent vision in which vast chunks of humanity is jobless and essentially left with massively diminished economic value.

That’s the coming dystopia. Already it’s being felt everywhere from the factories of China and data centres of the US, the most recently-constructed of which barely require human input, to the apparently structural youth unemployment of Spain and Italy, stubbornly stuck close to 50%.

What about us? How’re we looking? Weirdly, it seems we’re doing fine. New figures out today show unemployment at 4.9%, the lowest level since December 2008 (despite recent methodological changes, this remains a post-GFC low), when the global economy was just about to commence its swan dive. And unlike, say, the US, where low unemployment rates mask increasing numbers of people simply disengaging with the labour market entirely, we’ve still got a high labour force participation rate – currently past 70% for the first time ever.

WELLINGTON, NEW ZEALAND - NOVEMBER 28: Prime Minister John Key (L) and Finance Minister Bill English enjoy a laugh during a cabinet meeting at the Beehive Theatrette on November 28, 2011 in Wellington, New Zealand. John Key won a second term as Prime Minister this weekend, with his National Party securing 60 of the 121 available seats in parliament. The Labour party lost 9 seats bringing it's total to 34, with the Green party at 13, NZ First 8, Maori Party 3 and the ACT, UnitedFuture and Mana parties all securing 1 seat. (Photo by Hagen Hopkins/Getty Images)

Halo effect: given the results, what CEO wouldn’t gaze adoringly at his numbers guy? Photo by Hagen Hopkins/Getty Images

This is very good news for National, after a year in which they’ve faced their first truly significant challenges in three terms of government from both the housing crisis and latterly increasing angst around immigration. These figures will be a formidable argument against the idea that excessive granting of work visas has had a negative impact on local workers, especially given that wage inflation has hit 1.6% – a low number in a normal era, but that’s not what we’re living through, so it’s well ahead of the overall inflation rate of 0.2%. And public sector workers fared slightly better again, with 1.7% wage growth.

House price and rent inflation, particularly anywhere near Auckland, make those inflation figures seem redundant for those impacted by such forces – but there’s a big section of the country out there not feeling the pinch, and home owners and property investors who won’t be complaining no matter how bleak things get. And again, compared to what’s happening almost anywhere else in the developed world, those raw employment figures will be received as pretty spectacular.

It suggests that for all the enmity and fury which John Key attracts personally within certain quarters, he and his government have earned their high poll numbers if – as is true for many, many people – the economy and employment is your yardstick for success. Heading into an election year Andrew Little, already in a pretty shitty situation, has struggled to find anything to grab hold of in these figures, focussing on the NEET numbers in a way that feels grasping and futile.

NEET is a big deal – Not in Employment, Education or Training goes the acronym, and it disproportionately affects youth, who are basically a cohort being generationally bullied by their parents. They didn’t mean to fuck them over, but they have.

Still, there are few votes in the young and disaffected, and many in the older and still striving. They will be cheered and likely to ask for more of the same from these numbers. With cranes studding the horizon suggesting a building boom in Auckland, tourism remaining strong and even dairy prices starting to inch into tolerable territory, the critical indicators suggest that Bill English will only have more money to steer come May – another troubling omen for Labour, the Greens and their designs on government.

So are things fine? Maybe we just have some economic geniuses at the helm and should just be grateful? That seems foolish. The Rise of the Robots is unequivocal that the future is a when, not if, scenario. It argues persuasively that when tipping points come whole industries will be swept away in a few short years, and that major reform of tax systems and conceptual reimaginings of what we deem a worthwhile existence must follow. This is critical to ensure that these disenfranchised workers retain the spending capacity to keep the global economy functioning and prevent it sliding into Trumpish anarchy.

John Key’s National party is not the fourth Labour government though. They’re avowed incrementalists, not radicals. And we don’t yet have the desperate times which demand such desperate measures. Until then – truly, that day is coming one way or another – Martin Ford suggests another approach which might be more likely to gain traction with this government.

He points out that across the world one of the legacies of the small government trend which has dominated the last 30 years is decaying and unfit-for-purpose national infrastructure. He suggests that, with the abundance of cheap money our central and commercial banks currently have access to, we should get to fixing or expanding it.

The great upside to this is that not only do we then get lots of shiny new and shiny fixed things to play with, but we also put the many idle hands which will be coming in the next few years to work, making big, unwieldy things – one of the few activities which remains largely impervious to automating away, at least not in the near term.

Ford is talking about bridges and dams and roads and airports, and looking predominantly at America, which built a lot of that stuff in the 50s and 60s and which is thus at or past the end of its natural life. It’s less applicable to that same infrastructure here, though – while some of it’s breaking down, we just don’t have the volume of traffic to really wear it out in the same way.

Besides, we spent the 50s and 60s and 70s building other stuff. Housing, mostly. Funnily enough, that is the single piece of our infrastructure which is most unfit for purpose right now. Much of our government-owned stock is in fact falling apart, and the rest is often the wrong size and in the wrong places.

It’s also the biggest and most intractable problem this country and therefore this government faces. So the smart play might just be to look these employment numbers square in the eye and say that while they’re very good, they’re unlikely to stay that way. That in fact the best way of ensuring they do might be to take those people currently unemployed and put them to work making up the enormous shortfall in housing this country faces.

Bill English has gone some to way to doing that, by signalling a boost in Housing NZ building. Labour called it an “ultra-lite” version of their Kiwibuild policy. But the public don’t care much who came up with a policy, and National, willing policy thieves in the past, could do worse than rip off  a much larger chunk of Kiwibuild, which pledges 100,000 new houses, wholesale.

This would be on a different scale to any prior policy theft. But it’s a problem of a different magnitude too. And the fact it would help significantly delay a major employment headache  – which is coming whether we like it or not – and is unlikely to endanger a fourth term suggests that just maybe it is an idea whose time has come.

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