It’s still a long way back to normal levels and it would only take another geopolitical shock to tip the scales.
Or, as some of my more hawkish friends fear, we may find the tight labour market in New Zealand causes local inflation to persist for longer.
We may still need to see rate hikes that push the economy towards recession.
We need to find more workers to relieve pressure on the economy - or it will slow until more workers are no longer needed.
The former is preferable, so let’s hope progress can be made to sort out immigration settings and return the flow of workers to something approaching normal.
But while it is a tough time on the recruitment front, I think it’s worth pausing for a moment to appreciate what a good time it is to be a young worker or school leaver in New Zealand right now.
There may never have been a better time to be young and looking to earn a buck, at least not in my working life.
Or, as the Herald’s Cameron Smith puts it in his feature for the Herald’s Rebuilding Better series: “If 2022 were to bear a moniker it would be the Year of the Employee.”
I don’t want to sound like an old codger but in my day you’d get 200 applicants turning up just to try and get a job at McDonald’s ... or, in my case, Countdown CitySouth in Christchurch.
This year, McDonald’s hit headlines for a nationwide push to hire 2000 workers, the jobs being offered on the spot.
I had to cut my hair just for the privilege of collecting supermarket trolleys.
Kids these days ... they don’t know how lucky they are.
But I’m pleased for them.
The unemployment rate was 12 per cent in New Zealand when I finished university in 1992.
Policymakers became obsessed with beating inflation to the point of doing great social damage.
Because it only had a single target - inflation - the Reserve Bank did not face the kind of retrospective scrutiny it copping is now.
Instead, the key players were lauded for beating inflation despite the lopsided social outcomes (and the fact it tracked down globally through the 1990s anyway).
In hindsight, we should have moved slower.
To his great credit, Jim Bolger, the Prime Minister through that era, has acknowledged this.
But few of his peers seem prepared to do the same.
Former National Party leader and Prime Minister Jim Bolger has admitted things could have been done differently during his time. Photo / Claire Trevett
The enormous social value of low unemployment seems also to be lost in all the debate about the rising cost of living and the Reserve Bank’s Covid response.
If we’re thinking about building a better long-term future for New Zealand, making sure everyone has a job is a very good place to start.
It was refreshing last week to see ANZ economists Finn Robinson and Miles Workman take a brief timeout from the inflationary woe to do a deeper dive into New Zealand’s history-making job market.
Topline unemployment actually remained flat at 3.3 per cent in the September quarter, but Robinson and Workman note that the only reason for this was that the labour force participation rate surged to a new record high of 71.7 per cent.
That jump helped lift the employment rate to a record high of 69.3 per cent.
“Given the leap in the participation rate, it’s probably no surprise that we saw the largest ever quarterly decline in the number of people who are not in the labour force,” the economists said.
So where are all these new workers coming from?
A big part of the answer was a record 19,7000 annual increase in the number of 15- to 19-year-olds in the labour force, they said.
This isn’t necessarily all “good” news, they noted.
There is a risk that some young people maybe be taking jobs due to family pressure around living costs when they should be staying in education.
But I’d argue that for kids failing to connect with the school system and those unlikely to enter tertiary education, the chance to get started in a trade or retail and hospitality is infinitely preferable to the Jobseeker benefit.
Not just economically but psychologically and socially.
Whenever I write about low unemployment, people remind me that the numbers on jobseeker benefits are still high.
Those numbers are falling now too. But they do suggest a percentage of the population is so alienated that they are simply unwilling and unable to make the leap into employment.
Surely that’s a reminder of why we must keep unemployment low.
If we want to understand the inability of these people to work, I’d suggest we take a look back at what our economic policies did to them or their parents back in the 1990s.
