OPINION: The recording of the highest unemployment rate in more than a decade not only paints a grim picture of the present state of the economy, but sounds a warning about the challenges to be overcome if New Zealand is to have a prosperous future.
The 175,000 people estimated to be out of work represents 7.3 per cent of the labour force, the highest rate since 1999.
On one level, Kiwis can count their blessings that it is not higher.
As the clouds of recession gathered in 2009, there were dire predictions that unemployment could reach one in 10 - a figure not seen for a generation and which would have condemned hundreds of thousands of workers to the dole queue.
At the same time, New Zealanders could have been forgiven for thinking that unemployment had peaked, as it hovered between 6.2 and 6.8 per cent for most of the past two years and there were signs of a nascent recovery.
Unfortunately, there is no silver bullet to turn the unemployment rate around. Despite the insistence of some, the Government cannot magic jobs out of thin air. The reality is that work programmes simply do not work.
The key ingredients for a strong economy and solid growth are investment by productive businesses, value-added products that not only increase the worth of exports but create more jobs, and a well-educated and highly skilled workforce.
The Government can do much to create the right conditions for the first two of those to flourish. It has a much more hands-on role when it comes to the third, where action is urgently needed to ensure more young people from vulnerable groups go into the world properly equipped for the workplaces of tomorrow.
Of particular concern in the latest labour force statistics is the increase in joblessness among Maori and Pacific Island workers. More than 15 per cent of them are unemployed - more than twice the rate as in the general population.
The high rate of Maori and Pacific Island unemployment must be viewed in the context of the poorer educational outcomes for children from those communities. Only 51 per cent of Maori and 60 per cent of Pacific Island school leavers have NCEA level 2 or above, compared with 78 per cent for Pakeha and 86 per cent for Asians.
That means thousands of Maori and Pacific Island teenagers embark on their working lives each year at a distinct disadvantage. Many end up in unskilled or semi-skilled jobs which are the most vulnerable when the economy shrinks.
The Government has set a target of 85 per cent of 18-year olds achieving NCEA level 2 or an equivalent qualification by 2017. At present, the rate is about 74 per cent.
Clearly, to reach the target, there will have to be a rapid and pronounced improvement in the educational outcomes among Maori and Pacific Island pupils, who will form an increasingly larger proportion of the workforce in the coming decades.
The Government must therefore ensure its lofty target is matched with funding directed at those who are struggling. Better to spend on that today than on dole payments tomorrow.
- © Fairfax NZ News