And I say “we” because even if you are secure in your job right now, we will collectively all pay as a society for the damage that unemployment does.
We complain about youth crime, ram raids, gangs, and violence in the central cities...and we blame all sorts of things.
But it’s not rocket science to draw a correlation with unemployment. If young people have jobs and secure financial futures they are considerably less likely to commit crimes.
So it is important to remember that when we talk about reducing economic demand - contractions and recessions - when we get excited about numbers that will allow the Reserve Bank to cut interest rates; we’re also talking about people losing their jobs.
Goodness knows I get lost in that stuff. It’s part of the job. I find myself saying things like: unemployment is relatively low. It is technically still below the long-run historical average.
But this week’s unemployment data carried with it a sobering reminder of who really bears the brunt of the pain.
It is our children and grandchildren. Our mokopuna. That seems kind of relevant given we know unemployment will also skew disproportionately by ethnicity, with Māori youth squarely in the bottom cell of this grim spreadsheet.
We’ve seen it before and guess what? Here we go again.
Unemployment rose to 4.6% in the June quarter. That figure disappointed markets that had anticipated a higher number which would have confirmed expectations for an August rate cut.
That was the topline take last week. Put in hard numbers and it hits a bit differently.
Over the year, unemployment rose to 143,000 - an additional 33,000 jobless. That’s about the capacity of Wellington’s Sky Stadium if you want to visualise it.
And nearly half of those freshly unemployed were young people. Annually, unemployment for people aged 15 to 24 years rose 14,400.
In the 15-19 year old age group, the unemployment rate is now above 20% - up from 15.1% last quarter.
Two years ago we had a labour shortage. These kids, who, for whatever reason, aren’t ready for further education, were walking into retail and construction jobs.
Stats NZ also noted that underutilisation rose 29,300 for that age group. That’s people who don’t qualify as unemployed because they have some hours of work, but not enough to live off.
This is a bleeding heart column, I know. Sorry. I write them every year or so when an ugly piece of reality pierces my cold data-driven heart.
But I’m not trying to write a political column. Those on either side of the great divide will easily find reasons to blame the other.
Are the last lot to blame for letting inflation get out of control? For all the mitigating factors of the pandemic, these numbers are a reminder of why it is always dangerous to let inflation out of its box.
Or has the current lot been too reactive, panicked by unrealistic fears of 1970s-style calamity?
It’s now clear we’ll beat inflation in the coming months. There has been no return to the bad days of Muldoonism.
There was never going to be.
There were no carless days or price and wage freezes. Classical monetarism was always in charge of this cycle, regardless of how loosely it was wielded to buffer us from economic chaos during the lockdowns.
We had the tools in place this time and they’ve done their job.
As inflation falls away and the job losses mount it’s hard not to question whether this Government was too quick to remove the Reserve Bank’s dual mandate - weighing unemployment as well as inflation.
It wasn’t a whacky policy. Both the US Federal Reserve and the Reserve Bank of Australia have retained theirs.
With the dual mandate in place, it’s not inconceivable that we’d have seen interest rate cuts already.
Or perhaps we’d have seen a lower peak in the OCR.
Could we not have tolerated a slower softer landing? It seems not. One thing we learned from the pandemic is that there are many people with very little patience.
Patience is a virtue, they used to say. Is it still? I think perhaps in the modern world of winner-take-all capitalism many now see it as a weakness.
Regardless, people really hated inflation and weren’t shy of letting policymakers know.
Fair enough.
I’m not seeking to apportion blame. I just want to stop and think and remember how this system actually works.
Inflation, left unchecked, does terrible damage to economies and society. So we use the tools we have to beat it.
But in doing so we’ll consign tens of thousands of people - disproportionately young, disproportionately Māori - to the unemployment scrap heap.
Many of them will claw their way back up the job ladder when the economy improves. But many won’t.
They’ll leave the country if they have skills and opportunities. Or they’ll drift into depression and despair.
The gangs will be happy to embrace some. Some will end up on the streets.
We’ll walk around them and avoid eye contact as we head in to buy our more moderately priced cheese.
I’m being deliberately emotive here. But I’m not wrong. I’m not really exaggerating. This is the reality of the modern economy.
Pointing at politicians will only take you so far.
It’s likely the different political approaches on offer in this country would, at best, have knocked the extreme edges of the statistics.
There was no way through the pandemic without stimulus and inflation. No way to beat inflation without a contraction and rising unemployment.
Could it have been done better? Yes. Could we do better now? Probably.
Perhaps from here, with a bit of compassion in our policy-making, we could still mitigate the worst of the pain.
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