The number of New Zealanders either out of work or wanting more work are up. Way up, writes Henry Oliver in today’s excerpt from The Bulletin. But who? Where? And what will it mean for the election?
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Unemployment rose to 5.6% in the June quarter, the highest rate in nearly 11 years, according to Stats NZ figures reported by 1News (and helpfully explained on yesterday’s episode of Now You Know). Seasonally adjusted, that’s 171,000 people out of work, up from 164,000 in the March quarter and worse than the 5.4–5.5% economists had forecast.
The broader underutilisation rate, which includes people wanting more hours or work but not actively searching, climbed to 13.8%, its highest since 2013, with 440,000 people wanting more work. Long-term unemployment is also growing: about 8000 more people have been out of work for over a year than in the same quarter last year. The unadjusted rate (so not seasonal) was far higher for Pasifika (11.6%) and Māori (10.8%) than for New Zealand Europeans (4.2%).
The closer you look, the worse it gets
The picture looks no better on closer inspection, Bernard Hickey told The Spinoff’s Toby Manhire yesterday. Annual wage inflation sits at 2%, losing ground to 4.1% price inflation, and retail wages haven’t grown at all in real terms over the year. Underutilisation was especially severe for younger people – 37% for 15- to 24-year-olds – and for Māori, at 22.8%.
Hickey pointed to a deeper structural problem underlying the numbers: New Zealand’s economy, he argued, “doesn’t know how to operate without house prices rising,” with around two-thirds of households owning homes that have now been falling in value for four years straight, compounding the effect of flat wages and job losses on how poor people feel. He also pointed out that, in New Zealand, “no government has been reelected with falling real house prices and falling real wages”.
Hickey was skeptical of the government’s framing that a recovery is already under way, noting the Reserve Bank’s post-June rate hike had already dented the more forward-looking measures of business confidence, and that Treasury and the Reserve Bank had wrongly forecast an employment rebound for four consecutive quarters.
If you look region-to-region, it gets patchy
The national figure also masks some sharp regional divergence. The North Island’s rate climbed to 6% while the South Island sat at 3.7%, with Auckland at 6.5% and Wellington at 4.9%. Canterbury reversed the national trend, with its unemployment rate falling to 3.6% – its lowest in more than two years – as reported this morning by The Press’s Sinead Gill and Blayne Slabbert.
Economist Brad Olsen said the South Island economy that was “more than holding its own,” with Canterbury job advertisements up 18% over the year, well above the 7% national rise. But that recovery is uneven even within the region: manufacturing, IT and construction advertisements grew strongly while hospitality and education ads fell, meaning the 14,800 Cantabrians still unemployed aren’t necessarily positioned to take the jobs on offer.
Two hats, one election
The political reaction split along predictable lines, but with an unusual wrinkle: Nicola Willis issued two separate statements, one as finance minister and another as National’s campaign finance spokesperson, as reported by RNZ’s Giles Dexter. As minister, she called the quarter “tough” and pointed to government measures – Investment Boost, fast-tracked construction, tourism and international education support – as the path back to growth. As party spokesperson, she accused Labour of being unable to credibly prioritise jobs while opposing the very policies she said were driving job creation, and warned that new taxes proposed by Labour, the Greens, Te Pāti Māori and Opportunity would threaten the recovery of consumer confidence.
Labour’s finance spokesperson Barbara Edmonds called the figures “a damning verdict” on Luxon’s economic management, pointing to public sector cuts and cancelled infrastructure projects, while Green co-leader Chlöe Swarbrick said the numbers showed a government that had broken the economy rather than grown it. With the next labour market release due just three days before the election – and with an economist telling RNZ not to expect any improvement until 2027 – unemployment is likely to remain one of the campaign’s hottest topics right until polling day.
