PAUL MCBETH: Time to ring the alarm on jobs

Paul McBeth is the editor of The Bottom Line and Curious News, and previously worked at BusinessDesk for 15 years.

When Andrew Little took over the leadership of the Labour Party more than a decade ago, the staunch unionist unsurprisingly made a big deal about the importance of work and the dignity it provides.

His future of work commission in the mid-2010s contemplated the rise of automation in white-collar jobs – something that had already been felt on the factory floor – and put forward a raft of big ideas.

The reason it comes to mind is the former Labour leader’s very sensible contributions to the 1News election coverage in pointing out that the campaigns seemed to miss the point that people were feeling the pinch.

The result on the night was an indictment of both major parties, with the provisional results putting the National Party at 29.2% and Labour at 29.4% – a difference of almost 3,700 votes in the second-lowest turnout on record behind 2011.

The Opportunity Party was probably the night’s big winner in crossing the 5% threshold to enter Parliament for the first time and the Greens and Act were undoubtedly chuffed with their record results, while New Zealand First was left ruing Michael Laws’ predictably big mouth in the dying days of the campaign.

Where two old souls go slowly mad

Overhangs for the National Party and Te Pāti Māori are set to add an extra 11 members to the house, largely offsetting each other, and will likely trigger a few billable hours for constitutional experts to argue whether the system’s design undermines its mixed proportional nature.

To be fair, the battle of the Chrises did deliver the expected amount of bland that they’d been promising all campaign, and Chris Hipkins captured the moment best when noting that the country had spoken, but that it would probably take a bit longer to figure out what was said.

If the 400,000 or so special votes overturn a couple of National electorate seats and Act or NZ First lose a list MP, there’s a very narrow pathway for the left Labour-Greens-Te Pāti Māori bloc to form a government with the self-proclaimed centrist, Opportunity.

Still, the thinly-traded Polymarket contracts are pricing a 78% chance of Christopher Luxon retaining the prime ministership, up from 56%.

And if the preliminary numbers largely hold, the opposition actually has a chance to develop alternative policy prescriptions ready to address the issues facing the country – something that’s been lacking in the last couple of governments.

Habit, habit clogs them dumb

Given the dire fiscal outlook facing New Zealand, you’d think there might be some honest reflection about what the role of government is and how best to deploy the nation’s collective heft, but there’s a decided lack of appetite to both cut spending and hike taxes.

What should be higher on the minds of policymakers is the dire state of the jobs market.

Yes, the unexpected lift in the unemployment rate to 5.7% gave the Reserve Bank some leeway in making its case that it’s too early to keep hiking the official cash rate given the tentative signs of economic recovery.

But of greater concern was the fact that employment went the wrong way in the September quarter, falling 0.1%.

In fact, the number of full-time jobs has shrunk by 21,000 over the past three years to about 2.3 million people in full-time employment, with a 27,000 lift in part-time work masking the headline figure.

Her polished oven spits with rage

What’s more, the number of people who’ve been out of work for more than a year is at its highest level since the mid-1990s, at 36,300, more than three times the 10,800 in the September quarter of 2023. Another 44,100 have been out of work for between six and 12 months, more than twice the 21,300 of 2023, while the 25,200 unemployed for between three and six months was up from 20,000 three years earlier.

Those 105,600 people account for about 60% of unemployed people, up from 44% three years earlier. That three-month level is important, because the rule of thumb is that 13 weeks out of work dramatically increases the odds of someone becoming dependent on welfare.

In much the same way, KiwiSaver hardship uses the 13-week period as the benchmark for people to get back on their feet and personal finance columns regularly talk about the rainy-day fund covering three months of expenses.

It’s all well and good that at a national level, average ordinary-time weekly earnings have grown 12% over the past three years to $1,506.01, outpacing the 9.2% increase in the consumers price index. Same goes for the more muted increase in the household living-cost index for higher-spending families, with mortgage rates coming down for those able to buy a house.

Cutting red tape for businesses, opening new mines, boosting money for tech research and development, and ramping up repairs on schools and hospitals are all worthy goals to stoke the employment growth envisaged in various political parties’ policies.

But yin and yang won’t ever meet

But none of this addresses the fundamental issue that more and more people feel like they’re getting left behind.

And the murky election result simply shows that no one’s come up with a clear vision cogent enough to capture the public’s imagination.

With artificial intelligence the next existential question facing the future of work, reconvening the future of work tripartite forum to get businesses, government and unions working on practical transitions for local and national workforces would probably be a good place to start.

The next couple of administrations need to rediscover the dignity of work lest they find themselves out of a job.

Watch Paul McBeth and Oliver Mander discuss the future of work here:

Image from Curious News.