As of March 2024, New Zealand's unemployment rate is 4.3%. While this number might not raise alarms right now, looking at the past and considering today's global economic challenges suggests we need to be prepared.
WHAT'S HAPPENING?
Back in the early 2010s, our unemployment rate was around 6%. Over the years, it dropped to as low as 3.2% in early 2022. But now, it's starting to creep back up.WHY SHOULD WE BE CONCERNED?
Global Economic Struggles:
The world economy is facing tough times, and as a small, connected country, New Zealand could feel the impact, leading to fewer jobs. The latest US July Jobs Report on August 2, 2024, painted a bleak picture.
Remote Work Competition:
With more jobs being done remotely, people from all over the world and even in different regions can apply for positions that used to be local. This means more competition for New Zealanders.
Quality of Jobs:
There’s a shortage of high-quality jobs. Industries that used to provide stable employment are changing, and this could mean fewer good jobs available. With the high cost of living, we see people applying for all kinds of jobs, leading to an excess of applications per vacancy.
Changing Work Connections:
Remote and hybrid work setups are weakening our professional networks. These networks are crucial for finding jobs, and without them, it might take longer to secure employment.
THE DATA TELLS A STORY:
Our unemployment rate has been gradually increasing from 3.2% in March 2022 to 4.3% now. If this trend continues, we might see rates similar to the high levels of the early 2010s, around 6%.
WHAT CAN WE DO? WHAT DID WE DO IN THE 2010s?
It is crucial for policymakers, businesses, and individuals to prepare for this potential scenario by focusing on upskilling, diversifying economic activities, and strengthening local job markets. We must and can better prepare for the challenges ahead and ensure more New Zealanders have access to good jobs.
Let's start a conversation: How might we better prepare for potential unemployment challenges? What steps should we take to support our workforce?