Editorial: Kinks in job market

19:39, Jan 07 2013

Contrary to the expectations of many businesspeople and economists, towards the end of last year unemployment ticked up across the country.

Statistics for the September quarter, released in November, showed that 175,000 people were unemployed, a grim rate of 7.3 per cent.

It was the highest unemployment rate since Jenny Shipley was prime minister in 1999. Since the figure comes from the standard Household Labour Force Survey for which only a minimal amount of work is required to qualify a person as employed, the headline number did not include the 113,000 more who were unwillingly doing less work than they desired. The number who were classed as long-term unemployed was also up steeply.

Admittedly, the numbers for Canterbury were less alarming, with just over 5 per cent unemployed. The Canterbury figure was obviously lowered by the rebuild slowly cranking up. Auckland, on the other hand, was a particularly bleak spot, with unemployment running at more than 8.5 per cent.

With such large numbers of people willing to work and actively looking for it (both of which are required in order for a jobless person to be counted as unemployed) it is startling therefore to learn that some of Christchurch's biggest employers are calling for more unskilled immigrants to be allowed into the country to fill job vacancies.

A shortage of people to fill jobs requiring skills had been expected but according to the recruitment manager for one Christchurch-based employment agency, many local companies are struggling to fill positions that require no qualifications or skills that can be learned on the job.


That was certainly not expected. Indeed, some had predicted that one beneficial side-effect of the rebuild was that it would soak up a large proportion of the region's unemployed.

Before rushing to fill the jobs with low-skilled or unskilled workers from overseas, however, it would be better to consider why New Zealand's unemployed, many of whom are without any worthwhile skills, are apparently so reluctant or unable to fill them. Many of the jobs will, of course, pay only the minimum wage.

As is well known, the cost of living in Christchurch, particularly the cost of housing, has risen steeply. Workers who might be induced to take a job here may be deterred by the fall in their income that it would entail.

Employers trying to attract skilled workers to the city have already had to adjust pay scales upwards in order to do so. Those looking for people at the bottom end may have to do so as well. The minimum wage is, after all, only a minimum, not a requirement.

The shortage of unskilled workers is matched by reports last week that a skill category at the heart of the New Zealand economy, in dairying, is being filled by workers from the likes of the Philippines, Argentina, Sri Lanka, India and Colombia.

Part of the reason for the sudden shortage of New Zealanders with the skills necessary to fill those jobs is likely to be the expansion of the industry in a relatively short space of time. But it is worrying that the industry is apparently more willing to import workers from abroad than to encourage and pay local people.

Immigration is fine for supplying skill shortages we cannot fill, but it is difficult to justify while New Zealanders are out of work. It is hardly defensible when it gets down to simply importing those with no skills at all.

The Press