New Zealand reports record-low unemployment rate

But businesses say there is a 'dark side' to the numbers

New Zealand reports record-low unemployment rate

New Zealand has reported a record-low unemployment rate in the December quarter, according to Stats NZ, which the government attributed to its "interventions" on employment.

Unemployment rate in New Zealand fell to 3.2% in the December quarter, down from the 3.3% in the September quarter. It is the fifth-equal lowest in the Organisation for Economic Cooperation and Development (OECD), according to the government.

"New Zealand's 3.2% unemployment rate stands against 4.6% in Australia, 4.1% in the United Kingdom, 4.2% in the United States and 6.2% in Canada. The OECD average is 5.5%," Finance Minister Grant Robertson said in a statement.

Meanwhile, employment rose by 27,700 in the quarter, with the total number of people in work now higher than the December quarter in 2019 before the pandemic spread.

Hourly wage also increased to 3.8% to $35.61 an hour, according to the government.

The government attributed the positive figures to its "interventions aimed at young people," including the Flexiwage, Apprenticeship Boost, Māori Trades Training, Mana in Mahi and He Poutama Rangatahi.

"It is good to see our proactive actions in this area are making a difference and helping young people reach their full potential," said Minister Carmel Sepuloni.

What does this mean for businesses?

According to Robertson, the recent results on employment and unemployment rates reflect the confidence of businesses in the economy.

"This is again an extremely positive result as businesses showed their confidence in the economy and continued to hire despite the impacts of higher alert level restrictions. It shows the Government’s strong health response continues to be to the right one for our economy," said Robertson.

While he acknowledged the continuous impact of the pandemic, the minister said the government's "balanced approach" put the country in a strong position that would keep New Zealanders safe, and their livelihoods protected from "volatile and uncertain environment."

Read more: New Zealand turns 'red' as new Omicron cases detected

"We have adjusted immigration settings in response such as extending working holiday visas and seasonal employment work visas. Our critical worker scheme and the Recognised Seasonal Employer Scheme has approved 24,000 people to enter New Zealand to support businesses and other organisations to keep the economy moving, the one-off residence pathway also provides certainty for up to 165,000 to migrants and business," said Robertson.

'Dark side'

However, the Auckland Business Chamber said there is a dark side to the low unemployment rate.

"There is a dark side to low unemployment as our recovery is being choked by spiralling wages, critical skills shortages and global competition for essential workers from IT to health," it said in a statement.

According to the chamber's CEO, Michael Barnett, the easing of critical work visas "can't come soon enough" to a several sectors, including healthcare, technology, transport, construction, education, food production, retail, hospitality, tourism, and service sectors.

"And while the opening of the borders brings some relief from the constraints holding recovery back, we need an overhaul urgently of how we value workers and jobs," Barnett said. "It will take more than a phased opening of the borders if we are to build a workforce where essential roles have essential skills and labour is available at all times to grow and increase productivity."

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