Richard Prebble: What NZ can learn from America's severe labour shortage

San Francisco and the nearby Bay Area are gateways to the USA's multi-trillion dollar tech industry. Photo / 123RF

OPINION:

I had never travelled to a country where the first question was: would I like to work for the government? A recruitment poster for US Customs greeted me on my arrival in the United States. I soon found out why.

It took an age to be processed, and even longer to recover my bags. America is in the grip of a severe labour shortage.

I was making my first trip to the US since Covid. Everywhere, there are signs saying "We are hiring". At one of the hotels where I stayed, they are so short of staff that they no longer service the rooms.

Where all the workers have gone seems to be a mystery.

Inflation is everywhere. On breakfast news there was an item comparing the cost of a typical 4th of July cookout with last year. The price of chicken is up 33 per cent.

The inflation and labour shortages we are experiencing in New Zealand are being experienced in the US - but on a gigantic scale.

America is competing for those foreign nurses the Minister of Health hopes to hire.

Employers have had to increase wages. Getting inflation under control in America is going to require recession-inducing interest rates. New Zealand runs an international deficit. Lenders require a higher interest rate from New Zealand borrowers than they can earn in the US because we have a higher sovereign risk. Higher US interest rates will push up global interest rates, including New Zealand's.

The US political response to inflation is as ineffective as New Zealand's. While I was in Chicago, I saw that the State of Illinois is reducing the sales tax on groceries by 1 per cent for a year. A mother of four commented that it was not going to make much difference to her household.

While US politicians blame the Ukraine war, Americans are aware that the real causes are closer to home. The decision to cancel pipelines and energy exploration has transformed America in just 18 months from being energy self-sufficient to an energy importer.

I visited a Walmart store - usually a temple to abundance. This time there were shelves that were not fully stocked.

The supply chain issues have not been resolved.

Americans are still spending. We could not get a table at our hotel's restaurant. Around 48 million Americans took to the sky or the road on the 4th of July weekend - or attempted to fly. I heard horror stories of flights being cancelled, people being stranded and having to take a tour around America to get home.

I also heard of people cutting back their 4th of July celebrations. Maybe the consumer is reducing spending.

Americans are over Covid. I often found myself alone in wearing a mask. But Covid is not finished. After a dinner we got a text from one of our companions saying he had tested positive. I tested negative.

Important primaries are under way. Democratic contenders were competing to say they were more staunch in their support of a woman's right to choose.

Now, the Democrats are asking themselves why they never put Roe v Wade into legislation while they had the chance.

Those who have relied on the courts for social progress are now seeing the downside of using judicial activism rather than legislation.

The logic of the present Supreme Court repealing Roe v Wade means other rights such as gay marriage are also at risk.

This generation of Americans now has fewer rights than their parents. That has to become a great issue.

Americans have tackled great issues before, including slavery and civil rights. I am confident they will again.

There are lessons for us in all this. Just as the US courts have granted rights that Congress never legislated, there are those in New Zealand attempting to get from the courts what they cannot win in any election. What the court can grant, the court can take away.

I was in the US on business. The disappointing free trade agreement with Europe confirms our future is in the Pacific.

You forget how enormous the American economy is. Driving out from the Port of Long Beach, I passed a column of trucks carrying containers that stretched for miles. They would be empties going back to China. One of the supply blockages, the container shortage, is being solved.

I saw an Amazon warehouse with loading doors for 340 trucks. In Texas, they can build a transport depot faster and much more cheaply than we can. The depot is also more efficient. More lessons for New Zealand.

I always come away from America with great optimism. What an extraordinary, dynamic, exciting country.

For every mad American we read about, there are thousands of others who are hard-working and law-abiding. It is a rash person who bets against America.

- Richard Prebble is a former leader of the Act Party and former member of the Labour Party.