Job Market Remains Tight Despite Claims of Employer Demand

Data indicates a significant imbalance between job seekers and available positions across much of New Zealand, contradicting recent statements suggesting employers are actively seeking staff.

Yesterday, Prime Minister Christopher Luxon stated that unemployed school leavers needed to “get off the couch and stop playing PlayStation,” and that employers were “crying out” for young people. However, analysis reveals that nationwide, there are nearly four people on Work Ready JobSeeker benefits – excluding those receiving support for sickness or disability – for every job advertisement. The ratio was higher in 2020, but remains double that of 2021 and 2022, and has remained relatively stable in recent months. This challenging job market can have long-term consequences for young people entering the workforce.

Regional disparities are also apparent, with Kawerau exhibiting the highest ratio of job seekers to jobs at 228:1, based on Trade Me data. While Queenstown-Lakes appears to be the only area in balance, other regions like Hawke’s Bay – despite being cited by Luxon as eager for workers – have 7,359 job seekers competing for 568 positions on Seek. Professor Matthew Roskruge of Massey University’s school of economics described the current climate as “incredibly difficult,” particularly for those lacking specific experience or certifications. The Council of Trade Unions estimates that approximately 400,000 people are underutilised, meaning they desire more work than they currently have, and points to ongoing closures in manufacturing as exacerbating the problem. You can find more information about New Zealand’s economic outlook at Statistics New Zealand.

Experts suggest that policies focused on pushing people off benefits may be ineffective in a weak labor market. Shamubeel Eaqub, chief economist at Simplicity, noted that job hunters without experience will be “at the back of the queue,” and that entering the workforce during economic downturns can have lasting effects on career pathways. Massey University Dean’s Chair in Management Professor Jarrod Haar suggested incentivizing businesses to hire young people would be a more productive approach than reducing benefits. Even within the horticulture industry, often cited as facing labor shortages, Yummy Fruit Company chief executive Paul Paynter stated the industry is not currently short staffed. For more on employment support services, visit the Work and Income website.

Officials indicated they will continue to monitor the labor market and assess the impact of current policies.