With the national unemployment rate sitting at 5.6% but skewing much higher for young people, the Green Party has released a policy it hopes could resolve youth unemployment, Parker said.
“Over the weekend, they came out with a programme called Jobs for Young People, which they say would be modelled on the Jobs for Nature scheme that ran during Covid,” she said.
“That would entail paying the wages of every New Zealander aged 16 to 24 who’s been out of work for six months or more.
The programme would find jobs for young people with councils, iwi, businesses, the private sector, and non-profits, the Green Party said.
Parker said the downside was that the policy was “potentially quite expensive”, costing $4.9 billion over four years.
“There are a lot of young people of young people out of work at the moment, NZIER data came out over the weekend and according to that, around a quarter of 15- to 19-year-olds are unemployed.”
On the left, politicians are arguing the Government hasn’t done enough to stimulate the economy and create employment.
On the right, politicians argue that a high minimum wage and other regulatory issues in the labour market are a constraint on hiring.
“There are a lot of things around the margins on productivity that you might say affect the labour market longer term, but I think right now it is part of a cyclical slump,” Dann said.
“Businesses are not investing and expanding. The New Zealand population is not,” he said.
Meanwhile, net migration was low, so the population wasn’t growing and the money that was coming into the country via strong export returns was not going into industries that employed large numbers of people, he said.
“I think until you start to see manufacturing businesses and service sector businesses getting confident enough to invest, we’re still some way away, unfortunately.”
Most economists don’t see any material improvement in the labour market appearing until 2027.
Unemployment is typically one of the last economic indicators to improve in a recovery cycle, Dann said.
“If you think about your typical first job, it’s usually in that retail or hospitality area,” Parker said.
“So if they’re not hiring, then it’s pretty tough for young people to get a job.”
The 1000 applicants for the meatpacking job was “an awful story”, Dann said.
“I guess that’s the low end of the butchery world and perhaps it might lead to a butchery apprenticeship or something like that, but it just struck me that you don’t apply for a job like that unless you really want to work.
“I’m not saying butchery is a terrible job, you know, everyone loves great cuts of meat. But it’s not easy work. You’re talking about an intense job that probably isn’t incredibly well-paid.
“To get 1000 people who are that keen, it makes me wonder about a lot of the stuff you’re hearing from National and Act about [beneficiaries] not wanting to work.”
Meanwhile, at the other end of the economy, the NZ Herald this week ran a restaurant review about a $400 steak, Parker said.
“That’s right. So this is a place in Auckland that’s got the license to sell authentic Kobe wagyu beef,” Dann said.
“So somewhere out there, there are people who are prepared to pay $400 for the best steak in the world in Auckland.”
“There is still wealth in this country.”
“But, on our steak-based scale, that’s two very different ends of the spectrum.”
This week, Parker and Dann also look at fuel prices – and why they are cheaper in Australia.
Listen to the full episode for the complete conversation.
The Economy of Everything is available on the iHeart app or wherever you get your podcasts.
The series is hosted by Liam Dann, business editor-at-large and Tamsyn Parker, business editor for the NZ Herald. Thanks to CMC Markets.