It may be a case of “last in, first out” for many young workers.
And it’s increasingly hard to get back into employment once you’re out, Westpac senior economist Michael Gordon said after the release of new job data.
Stats NZ employment indicators today showed construction and manufacturing lost more than 18,000 filled jobs in a year.
And filled jobs for people aged 15 to 19 years were down 10% year-on-year.
Gordon said the latest data confirmed how much the economy had changed since the tight labour market of two or three years ago.
In 2022, many employers were desperate to find staff.
But borders reopened, migrants arrived and the economy’s post-Covid rebound slowed down.
Gordon said young people were also often in the firing line for layoffs.
He said recent data also indicated more people were staying unemployed for longer.
“Once you’re out, it is hard to get back in ... What we’ve been seeing in recent surveys is the six- to 12-month group has risen quite substantially.”
There were thousands fewer people aged 20 to 34 in work.
But the cohort aged 35 to 39 filled 2% more jobs than a year earlier, according to Stats NZ.
Council of Trade Unions president Richard Wagstaff said wages were not keeping up with rising costs, and young people were “bearing the brunt of the Government’s failure to protect jobs and grow the economy”.
He added: “The longer that we leave unemployment to grow, the harder it will be to tackle.”
Wagstaff said policies such as fair pay agreements were needed to deliver strong working conditions.
Fair pay agreements were planned to cover large parts of the hospitality and accommodation sectors but the coalition Government scrapped them in December 2023.
Wagstaff also called for social insurance to support workers in transition.
Economist and former Child Poverty Action Group spokeswoman Susan St John said support and benefits for some unemployed people were still miserly.
St John said that wasn’t always a problem if unemployment lasted a few weeks, but in a prolonged recession, it could be disastrous.
“It’s why we continue wallowing around in this ugly recession. Our fiscal cushions are not well-designed.”
GDP grew by 0.8% in the first quarter of this year but since 2022, Stats NZ has recorded four quarters of GDP decline, one flat and eight of growth, not adjusted for population.
Last year, annual real gross national disposable income fell 0.3% and annual real gross national disposable income per capita fell 2.0%.
St John, an associate professor at the University of Auckland Business School, said the country had major gaps in the safety net for some people in relationships.
An unemployed central Auckland man aged 25 with cash assets of $1000, paying $300 a week in rent, with a partner working fulltime at the minimum wage, would qualify for only $74 a week before tax on Jobseeker Support.
If single, the same man would qualify for Jobseeker Support of between $356 and $361 a week before tax, and a weekly accommodation supplement of between $70 and $147.
St John said lack of demand in the economy, which she blamed on restrictive Government fiscal policy, was behind the decline in young adults filling jobs.
Compared to June 2024, filled jobs in construction were down 6%, or 12,169 jobs.
Manufacturing was down 2.5% or 5850 jobs year-on-year in the latest Stats NZ data.
But across all industries, there was a 0.1% increase in filled jobs last month compared with the previous month.
“Construction is a quite cyclical and quite interest-rate-sensitive part of the economy,” Gordon said.
He said the country recorded a surge in building consents for a couple of years after Covid.
“There tends to be quite a long pipeline from consent to completion.
“We have seen housing consents stabilise over the past year.”
For that reason, the medium-term outlook for construction was not abysmal but recovery in construction jobs was still likely a few months away, Gordon said.
He said employment was down in the North Island, but steadier in the South Island.
“The strong performance of the agri-sector is a big part of that.”
Gordon said feedback from customers and colleagues often illustrated stark regional contrasts.
“In the North Island, there’ll be a litany of woes. In the South Island, it’s ‘$10 milk price, everything’s all right’.”
Seek’s June employment report was also released today.
It showed job ads were down 3% on May and 3% down on a year earlier.
But Gisborne, Marlborough and Southland bucked the trend, with job ads in those regions up from the month before.
Seek NZ country manager Rob Clark said job ad levels had been broadly flat for the past year.
“While the volume remains below pre-Covid levels, there are pockets of growth, which should be cause for some optimism.”
John Weekes is a business journalist mostly covering aviation and court. He has previously covered consumer affairs, crime, politics and court.