New report reveals impact of lost wages and presenteeism
The New Zealand economy is taking a multi-billion-dollar hit each year as more people leave the workforce due to ill health and as productivity drops among those still on the job, according to a new report from the Association of Salaried Medical Specialists (ASMS).
The report, authored by economist Andrea Black, reveals that lost wages from people exiting paid work because of sickness or injury now total an estimated $1.99 billion annually.
Even using a more conservative comparison with the previous year (2022/23), the figure remains a staggering $1.1 billion in lost wages, according to the report.
In addition to lost wages, the report highlights the cost of "presenteeism" — the reduced productivity that occurs when employees are not fully functioning at work due to health issues.
The estimated annual increased cost of presenteeism, attributed to the rise in the proportion of people in "fair" health since 2011/12, is $1.68 billion, according to the report.
'Managed decline' in workers' health
The findings come amid a period of "managed decline" in national health, with a significant drop in self-reported excellent health and a rise in fair health among working-age adults.
"Working age groups saw an almost 50% increase in poor or fair health," Black said in a statement.
"It is just a matter of time before this spills over into poor health – with implications for health services, the workforce and society as a whole."
The report said the determinants of ill health should be addressed in order to reverse the managed decline of New Zealanders' health.
"That is investment to improve housing, reduce poverty and increase the uptake of education alongside measures to improve nutrition and physical activity," the report stated.
"A stronger commitment to address the harmful effects of tobacco, alcohol, and unhealthy foods is also needed."
It also suggested identifying and addressing the reasons behind the increase in psychological distress, particularly among younger age groups.
It further underscored that the health system should be "fit for purpose," with measures needed to ensure that the workforce is retained and expanded.
"Finally, urgent measures are needed now to retain and expand New Zealand's medical and health workforce to meet the needs of an increasing population that is declining in health," it stated.
