Economist Dominick Stephens warns of significant job losses as the economic fallout of Covid-19 takes hold. Video / NZ Herald
The first indication that something was wrong at work came to Joe Vela by an automated text message. The body blow - that his job was almost certainly gone - was delivered via Zoom.
"Honestly, I sunk. I sunk right down in my seat. I was angry, confused and shocked," Vela said.
"I said to my manager after the meeting that I didn't want to go back on the machinery, that my head wasn't in it. And after that we were allowed to go home."
Joe Vela is losing his job, and says he feels let down by the company he worked for over five years. Photo / Brett Phibbs
Vela, a father-of-three who works at a building materials company in Penrose, is one of thousands of New Zealanders finding themselves out of work due to the impact of Covid-19.
In April, more than 1000 people a day went on to a main benefit, data from the Ministry of Social Development shows. And that's not the full picture. Not everyone jobless qualifies for support from the state, so those people don't show up in the data.
"Say your husband is in a job that's still going, he's a builder. You've got a job in the travel industry, you're made unemployed, you can register at Work and Income but you won't qualify for a benefit," says activist and former MP Sue Bradford.
Political activist Sue Bradford says job losses will become clearer after the wage subsidy runs out. Photo / File
Equally, she said, at the moment the government wage subsidy is masking the true impact of Covid-19. More than 1.7 million people - an astonishing 60 per cent of the workforce - are receiving the subsidy - but once it ceases there are likely to be more layoffs.
"There's going to be a long tail," Bradford said. "Where it really takes time is with people who have never been out of work before, they will usually borrow money and do anything they can because of the feelings around registering for welfare, the stigma."
The data shows there were 184,404 people on a Jobseeker benefit at the end of April - a jump of 32,600 in just a month.
Young people appear to have been the worst affected. The growth in 18-24-year-olds getting a Jobseeker benefit rose by 42 per cent since February, compared with 21 per cent for the rest of the population.
ANZ chief economist Sharon Zollner said it was typical in a recession for younger and older workers to lose their jobs at higher rates than others.
"Younger workers are less likely to have specialist skills that employers are unable to replace down the track, so they're more easily let go," she said.
"And older workers are more likely to take voluntary redundancy, but you wouldn't want to play that too much as mortgages are now so high lots of over-65s still have one."
She said industries likely to be affected, such as retail and hospitality, were those with young people. While some businesses were delaying layoffs by using the wage subsidy or trying to make it through to level 2, others, like tourism, had seen the writing on the wall.
"Typically in a recession you see firms hold on while they wait to see what's happened. But with tourism it's clear that there's no international market for a while, so they are making those decisions earlier."
Additionally, the data showed demand for food grants rose dramatically, by more than 200 per cent. Bradford said to her, that indicated that welfare payments simply weren't enough.
"You've got a rising number of people dependent on the wage subsidy of $585 a week, and if your rent is $500 then even if you get an accommodation supplement, it's pretty clear those numbers don't add up."
Vela said he and his colleagues were doing their best to keep their heads up as their company's proposals were worked through.
Manufacturing worker Joe Vela is trying to do what he's advising work colleagues: "Get through, focus on your family". Photo / Brett Phibbs
"Everyone is really upset. I feel let down, betrayed. But I'm the union delegate so I go to the meetings, ask questions. I'd really just like to take my three kids in there with me and say "look, this is who you're cutting off'."
Vela knew it was going to be a tough ask finding a new job in the Covid-19 environment.
"I know I should be thinking about it but I've got a lot on my plate. I just want to get through this process first, and do the same as I'm telling everyone else, get through, focus on your family."
