Too Man Jobs, Not Enough Workers

November 3, 2017
Iain MacLeod

The latest employment numbers were released this week for New Zealand and they show that overall unemployment has fallen to 4.6% which is the lowest level in five years. This puts us well ahead of Australia, for example, by a full percentage point.

At the same time, statistics show that we now have the highest percentage of people of working age (18 to 65) in employment we have ever had. At over 70% it shows people of all ages getting jobs.

Economists are in general agreement that once unemployment hits 5% we effectively have full employment as the remaining people are largely unemployable or for whatever reason cannot get (be made to) to the places of this employment. You can create all the jobs you wish beyond 5% but at unemployment levels like we currently have employers must increasingly be prepared to recruit from offshore or scaling back their employment and growth plans.

We are seeing more evidence of employers willing to engage those that are not in the country but the significant majority of our clients still need to be here to secure their skilled jobs for their resident visa applications. And still wrestle with this bizarre no job no work visa and no work visa no job conundrum. Why no Government is prepared to revisit this stupidity at a time of record low unemployment is beyond me.

We are meeting over the next two weeks with all the staff of NZ’s largest IT recruitment company, some of whom still demand that applicants have work visas before they will be recommended for interview. With an ever decreasing pool of local candidates their management, at least, have finally realised the importance of adding non-residents and non-work visa holders into the mix of candidates or a few of these recruiters will be looking for new day jobs.

At a time of record job growth one wonders why the current Government campaigned on ‘cutting’ numbers of migrants. As I have repeatedly argued, it was politics over economics and they aren’t cutting skilled migrant residence numbers at all. They never had any intention of doing so, they just exploited the ignorant and uninformed who think we are giving more and more people the right to live here forever…which as I recently wrote about, we are not.

In the past year over 70,000 fulltime skilled jobs have been created and Kiwis can only fill a proportion of those and it seems more and more employers will be forced, kicking and screaming if needs be, to work with companies like us and clients like you. Or they are going to miss out.

The Government believes we will create another 150,000 in the next three years.

Politically the Government has backed itself into a corner. Having promised to cut numbers, primarily via fewer international students and blocking lower skill level short term work visas they are about to confront an unfortunate reality.

On the one hand there were only 27,000 first time student visas issued over the past 12 months or so and that number has been falling since the previous government raised the bar last year on who gets student visas and the graduate work visas that followed. If the new lot are going to cut 20,000-30,000 visas and achieve this largely via curtailing the numbers of international students that pretty much signals the end of a $3 billion dollar a year industry and puts at risk 35,000 local jobs.

At the same time the changes made by the previous Government to only allow the lower skilled access to 12 month work visas and no rights to bring their family with them, saw the agriculture, horticulture, viticulture, hospitality and tourism operators throw up their hands in horror. Who they asked is going to trim the grape vines, pick the kiwifruit, milk the cows, serve that latte or change the beds in all those five star hotels, because kiwis either won’t do this sort of work or there aren’t enough who can?

Interesting decisions lie ahead. Politics and economics are not always compatible bed fellows. The one saving grace for the government is that the Australian economy is showing some signs of improvement and if their labour market strengthens it will inevitably see the flow of people in our direction slow, or even reverse. That could take the pressure off ‘migrant’ numbers and the government will be able to take credit for…well, nothing….but they’ll no doubt claim it anyway.

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