Recession drives unskilled teens back into study

Young New Zealanders have gone back to study in record numbers as unskilled jobs have disappeared in the recession.

The latest household labour force survey, published yesterday, confirms young people are bearing the brunt of the downturn, with a net 23,400 teenagers losing their jobs in the past year.

But the number of all adults aged 15-plus in formal study has leaped by even more - a record 33,500.

New Zealand's overall unemployment rate jumped from 4 per cent a year ago and 5 per cent in March to a nine-year high of 6 per cent in June, leapfrogging Australia's rate of 5.8 per cent for the first time since December.

The increase was worse than expected and halted the recent rise in the exchange rate, bringing the kiwi down marginally.

Two-thirds of the 18,200 lost jobs in the past year were in retailing and wholesaling, with the next biggest losses in farming, forestry and fishing, transport, storage and communications, and manufacturing.

But these were partly offset by continued job growth in health and community services and to a lesser extent in business and financial services.

Even the construction sector, where employment dropped by 9400 in the year to June 2008, managed to put back a net 1600 jobs in the latest year, partly because of new motorways and other infrastructure projects.

The two big manufacturing centres, Auckland and Canterbury, lost 35,500 jobs between them, but employment actually grew elsewhere by 17,300.

A massive 43,000 people under 50 lost their jobs, but there was a net gain of 24,400 jobs for people aged 50-plus.

Swanson father-of-four Karl Whitefield, 31, gave up a concrete-laying job last year to study civil engineering at Unitec - partly because of the collapse in the construction industry and partly because concrete work "took its toll on my body".

His wife is at home with a 5-month-old baby and the family have had to "make a few sacrifices" to survive on a student allowance plus some casual work with Mr Whitefield's former employer. But he feels it's worth it.

"When I get my degree I should be able to make good money," he said. "It opens up opportunities."

But Afghan refugee Roshan Saba, 24, is "frustrated" that he can't find work. He already has an accounting degree but his first job ended in redundancy in December after only one year, and he has gone back to Unitec to study finance.

"I'm looking after my family," he said. Neither of his parents has work and Mr Saba was the family's sole earner. "I'm applying for jobs, but there are no jobs."

Unitec economist Keith Rankin said the skewed job losses among younger workers suggested that many younger people were opting out of the workforce to boost their skills - reducing the supply of workers at the same time as the recession forced employers to cut back demand for workers.

"If it was solely a fall in demand, you'd expect it to be fairly evenly spread across the ages," he said.

"It's not that people are wanting older workers rather than younger ones. It's that the supply of workers is different at different ages."

Apart from teenagers, the other age group where employment has dropped heavily is people in their thirties. Mr Rankin said they might be able to cope better than other age groups because of Working for Families subsidies.

"When people have children and have had two incomes and one partner loses their job, as long as the other one is working more than 30 hours a week their Working for Families payments are likely to go up significantly and the family income mightn't fall that much," he said.

On the other hand, people over 50 were less likely to have children at home and more likely to be suffering other income losses due to lower interest rates and the collapse of many investment funds.

"Their household incomes will have fallen so they are looking for part-time work," Mr Rankin said.

Many older workers were also self-employed, he said, and had reduced work in the recession.