A double degree or even a masters may not be enough for university students to break into a job in their chosen fields as the job market worsens, long after the recession officially ended.

Unemployment unexpectedly rose from 6.7 per cent to 6.8 per cent in the June quarter, with opposition politicians and union groups saying the figures were “dire” and “alarming”.

In part, the worsening job market reflected a jump in unemployment in Canterbury, even when other indicators suggested the region was starting to perk up, economists said. The job market elswhere was improving, with jobs up 1 per cent in the quarter.

New Zealand went into recession in early 2008, but came out of it in mid-2009 and has been one of the advanced countries least affected by the global financial crisis.

But despite modest growth and the prospect of the huge rebuild in Canterbury, unemployment remains stubbornly high.

Some university graduates say they have spent months looking for work, after years in study, but have given up and returned to get higher degrees to improve their chances. The jobless rate for those aged 20 to 24 is improving, but remains high at 12 per cent.

Recently graduated from Victoria University with a masters in criminology, Jared Walton, 23, says he has lost count of the number of jobs he has applied for in various government agencies over many months. But he says he never even got an interview.

He was hopeful of getting a job when he graduated in the middle of the year: “But jobs have dried up in the public sector.”

Unemployment in the Wellington region was 6.4 per cent in the June quarter, slightly up on the March quarter, possibly reflecting government cutbacks.

“I would have thought once I got a masters I should have been able to find something,” Mr Walton said.

His degree had taken five years and he was sitting on a student debt of $68,000, so Mr Walton wanted to find a job “that can help me pay that off”, rather than taking any job.

Few of his friends who had finished university recently had been able to walk straight into a job.

In some cases, employers would not hire graduates because they were seen as “over-qualified”, Mr Walton said. Instead, he had picked up part-time work tutoring and doing some part-time admin work to keep himself going.

Meanwhile, Canterbury University student Matt Fanselow, 24, who has three degrees, said he had looked for work for a year while still studying for an honours degree. But he was now back at university doing a Master of Arts, after already racking up a student loan of about $73,000.

“The choice was either stay on the dole or do a masters, so I came back. But ideally I'd love to be working,” Mr Fanselow said. “But there was nothing out there” in his fields of human resources, adminstration, or policy analysis.

He had applied for more than 30 jobs around the country, and even a few in Australia. He has done research on business recovery after earthquakes, but even that could not secure him a job in Christchurch.

Unemployment in Canterbury jumped sharply to 6.5 per cent in the June quarter.

“People said why don't you work in McDonald's or as a labourer, but I haven't spent five years studying to do work I could have done straight out of high school,” Mr Fanselow said.

“It's a catch-22. People want you to have experience, but no-one wants to give you a chance to get experience."

The national weakness in the job market was driven by a 6.6 per cent quarterly fall in jobs in Canterbury, according to ASB's estimates, after a promising lift of more than 5 per cent in the March quarter.

But the Government said that, excluding Canterbury, employment in New Zealand rose by 15,000 in the quarter, and unemployment fell.

“This shows the unavoidable impact the earthquakes have had on the New Zealand economy," Tertiary Education, Skills and Employment Minister Steven Joyce said.

JOBLESS RECOVERY

June quarter, Household Labour Force Survey

Unemployment up to 6.8 per cent from 6.7 per cent in March quarter

Number unemployed up 2000

Number employed down 2000

Total unemployed: 162,000

Employed: 2.22 million

Teenage unemployment: 23 per cent for those under 20.

Unemployment in Australia: 5.1 per cent

WHY IS THE JOB MARKET SO BAD?

The economy is being held back by a high currency, at US81.4c yesterday

Uncertainty about the European debt crisis

Weak domestic demand as people pay down debt in uncertain times

WHAT NEXT?

Reserve Bank expected to hold the official cash rate at 2.5 per cent till mid 2013

- © Fairfax NZ News