BRACE YOURSELF

• Published date: 14 April 2024
• Publication title: Herald on Sunday

By mood I mean the general sentiment — not the actual unemployment numbers, which haven’t shifted nearly as much as people might think

This will sound brutal but, statistically, we are probably less than halfway through the rise in unemployment for this economic cycle.

Economists expect that there will be somewhere between 30,000 and 50,000 more unemployed people by this time next year.

Let me explain.

This time last year, businesses were still bemoaning labour shortages and workers were benefiting from near-record lows in unemployment.

Now, with the country in the grip of recession, we seem to be seeing new headlines announcing job losses every day.

Last week felt particularly grim.

Media job losses have dominated the news cycle, with nearly 400 roles cut across TVNZ and Newshub.

However, there has also been a steady stream of public service cuts from government ministries and departments required to reduce costs. The total had reached 1300 cuts at last count, and more are likely to come.

Councils are also cutting back and other corporates are battening down the hatches for this economic cycle.

There have been cuts at telco companies One NZ (around 200 jobs), Chorus, Spark and 2degrees (all with cuts in the double digits).

Meanwhile, construction and retail company failures have added to the toll.

Coming in the immediate wake of the news last month that New Zealand entered recession (in late 2023), it is creating a very sombre mood across the nation.

But what is incongruous is that the official unemployment rate is still well below the historical average. All the gloomy headlines we’ve seen in the past few weeks only add up to a few thousand jobs at most.

Every one of those job losses is awful at an individual level, an unwelcome disruption at best and a catastrophic life upheaval at worst.

I don’t in any way wish to underplay the personal pain they involve, but the numbers are clear.

Stats NZ’s long-running unemployment data series shows the average rate has been 5.5 per cent since 1986.

The data reached an all-time high of 11.2 per cent in September 1991 and a record low of 3.2 per cent in March 2022.

That low in March 2022 equated to 97,000 unemployed. By the end of 2023, the figure had risen to 4 per cent — 122,000 people.

For the record — because people get very animated about it — let me also make the distinction between official unemployment statistics and the benefit numbers.

The latest figure for those on Jobseeker Benefit who can be described...