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There’s a demand for workers, whether you’re a farmer or work at Farmers (Tina Tiller)
There’s a demand for workers, whether you’re a farmer or work at Farmers (Tina Tiller)

The BulletinJanuary 31, 2022

Labour shortages hitting New Zealand

Contributing writer
There’s a demand for workers, whether you’re a farmer or work at Farmers (Tina Tiller)
There’s a demand for workers, whether you’re a farmer or work at Farmers (Tina Tiller)

Farmers are turning to dairy drivers for help, while some employees are quitting to seek higher pay or free yoga from work, Justin Giovannetti writes.

A torrent of change is underway in the country’s labour market. Jobs are going unfilled and overseas sources of help can’t be tapped. That has farmers warning of rotting crops, while all types of businesses face a tough situation. Omicron will only make it worse. Meanwhile, workers are starting to demand more from bosses.

Questions abound as New Zealand’s unemployment rate could hit a record low this week. Tom Pullar-Strecker asks in Stuff if it’s really possible that 97% of eligible New Zealanders are employed at the moment. Part of the problem might rest with how StatsNZ collects data and defines employment, or the lack of it. Being counted as a worker gets complicated. But however you look at things, a lot of local employers need workers. Wellington buses ply the city’s streets with their front marquee calling for drivers, while “Help Wanted” ads are ubiquitous across the country.

Some workers are seizing the moment to quit and ask for more money and perks. The NZ Herald (paywalled) looks at the Bay of Plenty where there’s a tussle between employees looking for more and bosses resisting what they deem unrealistic salary demands. Friday’s edition of The Bulletin focused on how the highest inflation rate in a generation is pushing up wages. It’s also more than money, with some workers asking for more annual leave, trips, as well as paid yoga and pilates memberships. Local recruiters have reported that experienced applicants have been turned down over their salary demands, but things are shifting fast in the region. Even the horticultural industry is now paying a living wage or above.

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Facing a worker crunch, farmers are again warning that crops could be left to rot before harvest this year. A South Canterbury farm family told One News that they haven’t been able to bring over nine skilled harvest workers from overseas despite a government programme announced in December. Spots at the border for 200 workers have yet to materialise, with the government blaming omicron for the delay. The Canterbury farm’s vast fields are turned into more than 15 million loaves of bread annually and the farmers warn that without those workers, bread prices will go up this year. Similar warnings were made by other farmers last year, but since then, the small number of backpackers and excess workers who helped fill gaps have disappeared.

Some farms have turned to the dairy industry for help. There’s a small army of milk tanker drivers across New Zealand who could be asked to pilot combines and tractors over the coming weeks, Farmers Weekly reports. Organisations representing farmers and dairy are trying to see if the “unorthodox proposal” is feasible. It’s a sign of how desperate things are getting that it’s even being considered. The peaks of the milking and harvest seasons aren’t meant to coincide, so that could help. However, the biggest problem is that the trucking industry is currently short-staffed and fears of omicron infections could mean few drivers are free to trade in their trucks for tractors even for a few days.

Omicron could make labour shortages far worse. As the government tries to define who will be a critical worker in the coming weeks, an important distinction that gives them access to rapid tests and shorter isolation periods, Dileepa Fonseka writes in Stuff that it might be impossible to draw the distinction. Sure we’ll need supermarket workers, but without cleaning staff and security guards, the country’s businesses will shut down as well. Everyone eventually becomes critical. It’s likely to become a heated topic as infections spread. Over one million Australians might be in isolation at the moment and that country’s prime minister has suggested children be drafted to fill dangerous industrial jobs.

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With high inflation expected to stick around, it’s time to ask for a raise. (Getty Images)
With high inflation expected to stick around, it’s time to ask for a raise. (Getty Images)

The BulletinJanuary 28, 2022

Is it time to ask your boss for a pay rise?

Contributing writer
With high inflation expected to stick around, it’s time to ask for a raise. (Getty Images)
With high inflation expected to stick around, it’s time to ask for a raise. (Getty Images)

With inflation at a three decade high, New Zealanders face another year of shrinking paycheques as costs soar, Justin Giovannetti writes.

Inflation is soaring around the world and NZ hasn’t been spared. Domestic prices are growing at the fastest rate in a generation, with inflation hitting a 31-year high of 5.9% at the end of 2021. As Hamish Rutherford writes in the NZ Herald (paywalled), the last time inflation was this high “the Reserve Bank was given new powers to use interest rates to keep prices stable”. Much of New Zealand’s recent prosperity grew in that predictable environment. Too much inflation is bad for an economy, it often means that basics become more unaffordable and families struggle to budget when prices are rising fast. It’s hard to shop wisely when you don’t know what a good price is anymore.

This problem isn’t going away soon. Predictions set last year that this unexpected bout of inflation would be a temporary blip caused by Covid-19’s wrecking ball on supply chains have been dashed. Experts are now predicting another year of fast increasing prices, with inflation continuing at high levels into 2023. According to One News, the prime minister said after the StatsNZ figures were released that global pressures, like a 30% surge in petrol prices, were behind the inflation increase. Some of that is true and inflation is not a partisan issue, it would be happening regardless of who is in the Beehive, but there’s a local dimension to the problem.

Non-tradable inflation was way up. Economist Brad Olsen told The Bulletin that there are some troubling indicators in the data. One of them is non-tradable inflation, which is a measure that only looks at the increase in prices of things we don’t get overseas.

“Diving into the numbers deeper, you get a sense that there is some international stuff at play, but 5.3% in non-tradable inflation isn’t stuff we are importing, that’s demand exceeding supply here”, said Olsen.

That far exceeded expectations and is the highest level on record. House prices, rental hikes and the cost of some local materials are increasing prices across the economy. The increasing cost of nearly all our imports, from face masks to PlayStations, has made the problem worse.

While the roots of inflation aren’t partisan, this will quickly become a political problem for Labour, Henry Cooke writes for Stuff, because it’ll hit hardest the people the government says it wants to help.

So what does this mean for you? About half of New Zealand workers didn’t receive a pay rise last year, and for those who did, the average was around 2.5%. That still equates to a 2.4% pay cut. As RNZ explain, this won’t be a surprise for many readers who are struggling. The vast majority of workers enter 2022 worse off, with their weekly pay buying less than it did a year ago. Does that mean you should go to your boss and ask for a 5.9% raise? “In an ideal world, yes”, said Olsen.

Profits across the economy have been rising quickly over the past few years, pay packets haven’t increased much and labour shortages are being reported across the country. It’s a perfect storm for workers to flex their muscles. Profitable businesses face two options: Share the wealth or lose workers.

“Indicators of the labour market are telling us it’s difficult to find labour, there’s more poaching and turnover. What you might see is that if workers hold more power, they can go to their employers and tell them to make it worth their while to stay. If they don’t pony up the cash, they can lose their employees and it’ll be hard to fill their orders, because they can’t replace those workers,” said Olsen.