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OPINION: The first thing that surprises you is that he is very young.
She was a waitress, a bar manager, or a shop assistant and counted her meager weekly hourly earnings. You can still rent or maybe you have already moved home to live with your parents.
This is its first recession; she was still in school uniform when the last one arrived. Hers is the face of New Zealand’s newly unemployed.
That’s a simplification, of course, even a cartoon.
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When the most comprehensive official snapshots of developing job losses are finally in focus, we will be appalled at the wide range of people who are left without jobs. But there will also be patterns.
The first wave of job losses will be more closely linked to the sectors most affected by the closure of the border and a blocked economy, they are, in general terms and by coincidence, the same sectors that we consider most vulnerable to ebbs in the economic cycle Ordinary.
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The first wave of job losses will be more closely linked to the sectors most affected by the closure of the border and a blocked economy.
In the pre-Covid-19 world, retail and food and lodging services employed more than 350,000 people, accounting for 17 percent of all jobs, according to linked employer-employee data from Stats NZ of 2018.
The first thing that stands out about these sectors is how young their employees are.
In hospitality, more than half of employees are under the age of 30, and most of them are in their teens and early twenties.
Those under 30 in the retail sector occupy 44% of jobs.
Ryan Anderson / Things
Radical business rules have brought about such a change that when the data is released in August, you will feel painfully dated.
The youth of workers in both sectors reflects a lot of part-time work, but also the large number of first full-time jobs they offer. It is more pronounced than anywhere else in the economy.
There are also more women working in both sectors. In hospitality, 60 percent of employees are women, in retail it is 56 percent.
Median weekly wages are the lowest in the industry: $ 631 in hospitality, $ 782 in retail.
It’s also clear that just behind that low-wage young woman is her male counterpart.
He’s as tenuously connected to the job market as she is, often with fewer guaranteed hours than he used to work, and he’s so young.
Monique Ford / Things
The second wave of unemployed will be small business owners and the self-employed.
Sense Partners economist Shamubeel Eaqub pointed out in recessions that those under 25 are always overrepresented in job losses. “They are the lowest paid,” but their relative inexperience also makes them “the least productive in the workforce.”
New Zealand has few timely data on the labor market.
The last reading for Stats NZ was for the March quarter, which saw an increase in the unemployment rate of up to 4.2 percent, a very marginal increase of 0.1 percent over the same quarter last year.
The first “Covid neighborhood” is now and what started in February and March with the borders closing abruptly and, ultimately, the shocking clash of the running of the bulls is translating into permanent closings and redundancies.
That trend will deepen as the government’s $ 12 billion emergency wage subsidy to keep employers together with their employees ends in the coming weeks.
New Zealand statistics says the June quarter will show how the Covid-19 blockade changed the job market.
THINGS
Finance Minister Grant Robertson will deliver his third budget on Thursday.
But radical trade restrictions imposed to control the virus, including capacity reductions even at current alert level 2, have produced a wave of changes such that when the data is released in early August, it will appear painfully dated.
Eaqub pointed to Australia to get an idea of actual unemployment here. The two labor markets are very similar.
Earlier this month, the Australian Bureau of Statistics and the Australian tax office said that close to a million Australians lost their jobs in the five weeks from mid-March to April 18.
That figure implies that unemployment had more than doubled to 12 percent almost a month ago.
Extrapolating a similar effect on New Zealand’s smallest economy gives an unemployment rate of about 9 percent, although the timing may be slightly different due to the details of the short-term labor subsidy schemes of the two countries.
A more than 20 percent increase in the number of Kiwis who joined the Jobseeker benefit through April also points to a larger increase in unemployment than our official statistics can still show.
All of this was before the effects of the global recession, including increased trade protectionism, had a chance to bite.
A second wave is coming, and the faces of young salaried workers will quickly melt into the growing ranks of forced unemployed from other sectors. Many will be salaried.
Many, as Sholeh Maani, an expert in economics and labor markets at the University of Auckland, point out, will be small business owners and freelancers.
Thursday is budget day.
Experts may disagree on measures the government takes to mitigate job loss. How much to spend on recycling, how much to sink directly into private businesses, how much to spend on construction infrastructure, and what “shovel-ready” projects are useful and will likely help offset the private sector contraction (Hint: never be enough).
But there is little doubt that the government will have scrapped its previously expansive “wellness” approach in favor of that unique pillar of health and happiness: paid employment.
