Latest / The SME Stream / Liam Dann: NZ Herald Business Editor on the unemployment rate rising to 4.8%

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Liam Dann: NZ Herald Business Editor on the unemployment rate rising to 4.8% · The SME Stream

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  Speaker 1: As you've heard our news, unemployment has risen again. It
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  Speaker 1: is four point eight percent in the September quarter, up
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  Speaker 1: from four point six in the June quarter. Although we
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  Speaker 1: can take a crumb of good news because economists had
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  Speaker 1: been predicting a rate between four point nine and five
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  Speaker 1: point one. New Zealand Herald Business editor at large LYM.
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  Speaker 1: Dan joins me, now, very good morning to you.
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  Speaker 2: Oy.
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  Speaker 1: Well it is goodish news, isn't it.
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  Speaker 2: Yeah. I mean, look, we know the direction of this
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  Speaker 2: news was bad. That it was, and we're expecting, you know,
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  Speaker 2: things to get worse, and so that we knew labor
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  Speaker 2: market stuff tends to lag in the economic cycle, so
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  Speaker 2: there was no question that we're going to see more
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  Speaker 2: people losing jobs unfortunately. But on balance, you know, you
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  Speaker 2: take that it's it's coming lower than forecasts, which means
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  Speaker 2: fewer people lost their job and that quarter, which is
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  Speaker 2: obviously a good thing. I mean, I was there's some
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  Speaker 2: tough stuff in it, and just to sort of there's
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  Speaker 2: a lot of statistics in numbers, of course, but the
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  Speaker 2: one that jumps out to me is that we've still
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  Speaker 2: got the number of jobless people who had been employed
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  Speaker 2: in the last five years and have basically been made
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  Speaker 2: laid off or made redundant or just gone out of
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  Speaker 2: business rose thirty four point five percent annually to fifty
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  Speaker 2: five thousand. So that's fifty five thousand people in the
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  Speaker 2: last year who have just had their world turned upside
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  Speaker 2: down by redundancy or their business failing or something like that.
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  Speaker 2: So even though we can say, oh, look the stats
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  Speaker 2: are better than we thought and things, it is a
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  Speaker 2: reminder that these these periods are really tough on people
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  Speaker 2: and tougher society.
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  Speaker 1: Well, every percentage point is a family.
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  Speaker 2: Yeah, well, you know, many families, I guess, yeah, that's right.
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  Speaker 1: And that's what I remember when they were engineering this
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  Speaker 1: recession and it just you know, and Adrian or was saying, well,
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  Speaker 1: we need to get to this point in terms of unemployment.
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  Speaker 1: That's the most cynical, brutal way to manage an economy.
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  Speaker 2: That is, unfortunately, how we run our run our world
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  Speaker 2: in this particular system.
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  Speaker 1: And I can't think of a better one, you know,
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  Speaker 1: we know, I know, that's the.
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  Speaker 2: System except for every you know, the worst system, except
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  Speaker 2: for every other system, eactly. And it's yeah, it is
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  Speaker 2: pretty brutal. You know. New Zealand has historically run over
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  Speaker 2: the last twenty or thirty years, unemployment rates slightly above
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  Speaker 2: five percent, so we are still below the historical average.
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  Speaker 2: I know it's all a bit different now because you've
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  Speaker 2: got different categories of sickness benefits and all that sort
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  Speaker 2: of stuff, and I think the numbers of actual people
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  Speaker 2: on benefits is probably a different story. But you know,
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  Speaker 2: in terms of that pure unemployment rate's it's not at
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  Speaker 2: outrageously high historical levels. But I always think that it
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  Speaker 2: really is the direction of travel. You've got people losing
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  Speaker 2: their jobs and that really casts a dampner on the economy,
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  Speaker 2: and of course that's what the central Bank needed to
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  Speaker 2: see to get that inflation out.
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  Speaker 1: I've got textas and callers saying that, you know, they're
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  Speaker 1: very highly qualified, many years experience, they're turning up and
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  Speaker 1: there are two or three hundred people applying for the
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  Speaker 1: same job with just as much experience. It's just as
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  Speaker 1: many qualifications.
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  Speaker 2: It turns on a dime. I mean, you know, we
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  Speaker 2: would have been talking about it. You know, just say
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  Speaker 2: two years ago, we had a labor shortage in this
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  Speaker 2: country that the employers couldn't get people yes up.
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  Speaker 1: They were bringing me screaming for anybody.
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  Speaker 2: And it's that whip saw, you know, like it's just
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  Speaker 2: such an extreme turnaround. That's what it would be nice
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  Speaker 2: to see managed through the economy in a bit more
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  Speaker 2: of a stable fashion. So it look it is really tough.
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  Speaker 2: I hope this means that we see you know, it
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  Speaker 2: could just be timing, so there could be a lot
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  Speaker 2: more stuff to come. It could also mean that maybe,
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  Speaker 2: you know, things are holding up better than we had thought,
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  Speaker 2: and that the ultimate peak for un employed will come
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  Speaker 2: in a bit lower, which at the moment economists think
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  Speaker 2: about five point five or five point six percent, so
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  Speaker 2: that's a way to go to get there. The other
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  Speaker 2: thing I was going to touch on was interest rates.
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  Speaker 2: Of course, because people do care about where the mortgage
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  Speaker 2: rate is going. This probably means, because it is better
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  Speaker 2: than expected and things are still holding up, that it's
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  Speaker 2: less likely or almost completely unlikely now that the Reserve
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  Speaker 2: Bank would look at seventy five basis point cut at
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  Speaker 2: the next next meeting November twenty nine. I think it is, so,
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  Speaker 2: you know, still still probably a fifty basis point cut,
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  Speaker 2: but yeah, that's seventy five was always a bit of
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  Speaker 2: an outside bet because people sort of saw some you know,
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  Speaker 2: pretty grim stats for a while. Yeah, I mean, there's
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  Speaker 2: not much more to come in to change their mind
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  Speaker 2: at this point, so I'd say odds on for a
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  Speaker 2: fifty basis point cut there, barring you know, something happening
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  Speaker 2: on the other side of the world to really shape
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  Speaker 2: markets up.
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  Speaker 1: I know they say that redundancies affect young people disproportionately,
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  Speaker 1: but boy, it's been right across the board in terms
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  Speaker 1: of in terms of who's been made unemployd You've got
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  Speaker 1: your traditional meat workers, you've got media, you've got you know,
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  Speaker 1: very very highly qualified senior.
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  Speaker 2: Professional construction sectors, construction sector. Yeah, and yeah, I mean
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  Speaker 2: numerically it probably affects more younger people, but if you
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  Speaker 2: think about the impact on your life, you know, I'm
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  Speaker 2: not dismissing the impact on anyone's life, but if you're younger,
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  Speaker 2: you've maybe got less responsibilities, You've got more time up
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  Speaker 2: your sleep for sure, to readjust and reassess it. It's
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  Speaker 2: pretty tough if you're made redundant. It's a sixty yeah,
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  Speaker 2: sixty post fifty, you know, and if you've still got
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  Speaker 2: mortgage debt, and it's just you know, to contemplate retraining
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  Speaker 2: and all those sort of things. And then of course
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  Speaker 2: there's all the prejudice of you know, you know, just
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  Speaker 2: the way that employers may look at older workers and think, oh, well,
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  Speaker 2: you know, it's cheaper to get the young person in.
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  Speaker 2: So it is tough. It's really difficult for older workers,
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  Speaker 2: and so I sympathize absolutely.
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  Speaker 1: There's all the prejudice against gen Z as.
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  Speaker 2: They seem fairly confident that they can they can pick
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  Speaker 2: and choose it still some people, according to that, so.
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  Speaker 1: That they can make their own demands. But yeah, it
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  Speaker 1: must be that it's.
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  Speaker 2: A bit tough for in a market like this. So
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  Speaker 2: so that that that survey which was the one you're
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  Speaker 2: referring to, which is suggesting that gen Z will turn
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  Speaker 2: up to job job interviews and say well, I'll be
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  Speaker 2: working from home, thanks and all the rest of it.
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  Speaker 2: I wonder if that's a little bit of an overhang
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  Speaker 2: from from that period where we had that labor market shortage,
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  Speaker 2: and in a way, those first those people who came
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  Speaker 2: onto the job market then probably got an unrealistic expectation
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  Speaker 2: of what what what the job market is like really
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  Speaker 2: across time. Usually isn't a case that the people looking
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  Speaker 2: for the job can pick and choose to that extent.
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  Speaker 2: And that's sort of where we back to at the moment,
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  Speaker 2: I think.
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  Speaker 1: How do we define somebody who was unemployed because that
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  Speaker 1: also has changed.
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  Speaker 2: Yeah, well, no, no, it hasn't. It's been the same
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  Speaker 2: since nine eighty six.
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  Speaker 1: And the site no sorry, I meant like back in
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  Speaker 1: the day, if you were unemployed, I mean you had
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  Speaker 1: no job at all.
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  Speaker 2: Yeah, no job at all. That's absolutely how we define it.
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  Speaker 2: That there's been all sorts of changes and benefits. But this,
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  Speaker 2: this survey, and this is one of the reasons why
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  Speaker 2: I sort of stick up for it is that it's
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  Speaker 2: consistent right through. So yeah, it doesn't include so you
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  Speaker 2: have to look at something called underutilization if you want
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  Speaker 2: to see the numbers of people who are working a
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  Speaker 2: little bit but would like to work more. So, if
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  Speaker 2: you're a contract worker, and let's have a look, that
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  Speaker 2: is up to eleven point six percent cordly change was
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  Speaker 2: actually down a little bit though, and youual change one
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  Speaker 2: point two percent, so pretty pretty flat. Actually, you know
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  Speaker 2: that that's and that's possibly affection of the fact that
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  Speaker 2: as full time workers go, people do get you know,
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  Speaker 2: to employers start to look at contract workers, but that
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  Speaker 2: is for contract workers who maybe work twenty hours a
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  Speaker 2: week and you know, if they'd like more work, they
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  Speaker 2: would say that they were underutilized.
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  Speaker 1: Yeah, so the underutilization I think is probably a bigger
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  Speaker 1: indication of where the unemployment.
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  Speaker 2: Yeah, because of the way, because of the way that
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  Speaker 2: the job market is now, a lot of people do
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  Speaker 2: work on contract and freelancers and work for themselves that
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  Speaker 2: sort of thing. So that's where you'd see even you know,
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  Speaker 2: like tradees and so on, maybe not counting as unemployed,
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  Speaker 2: but not having enough work right now.
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  Speaker 1: It's really it's been you know, for some people it's
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  Speaker 1: been COVID was a boom, absolute boom time. For others
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  Speaker 1: that was completely bust and they've gone about trying to
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  Speaker 1: rebuild their industries or their businesses. But for your average
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  Speaker 1: mum and dad, it's been a grind from twenty twenty
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  Speaker 1: right the way through.
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  Speaker 2: Yeah, I think the annoying thing was and with Hinds,
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  Speaker 2: I wish we could have played it differently, But but
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  Speaker 2: the boom through COVID, it wasn't like we were really
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  Speaker 2: able to enjoy it because you had this weight of COVID,
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  Speaker 2: of the lockdowns and the concern and fear about what
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  Speaker 2: was going to happen next. So yeah, while they pumped
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  Speaker 2: the economy through with money, it wasn't like people, even
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  Speaker 2: even businesses that were doing quite well, were still suffering
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  Speaker 2: from the sort of anxiety of COVID. So enjoyed the
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  Speaker 2: upside of that part of it.
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  Speaker 1: I did a couple of awards and the brief windows
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  Speaker 1: when when you know, you could gather in a room
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  Speaker 1: and they said they couldn't even enjoy doing well because
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  Speaker 1: so many friends of this around the barbecue had businesses
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  Speaker 1: that have gone under.
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  Speaker 2: But I mean the messaging I wish you know, and
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  Speaker 2: again it's it's hindsight. I guess the media is part
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  Speaker 2: of it. But if we could have somehow made it
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  Speaker 2: clear that this wasn't real money that you know, if
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  Speaker 2: you were right, put it, put it, put it aside,
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  Speaker 2: you know, payoff debt, because there's going to be a
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  Speaker 2: flip side to this. If you pump the economy full
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  Speaker 2: of money somehow, you know it's gonna come out to gate.
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  Speaker 1: Thank you so much, Liam Dane, always good to talk.
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  Speaker 1: New Zealand Herald's Business editor at large,