As the economic crisis hits jobs and young people hard, economist Brad Olsen has a suggestion, in this content partnership article, for how older New Zealanders might help
Young people around New Zealand are reeling from the economic impact of the COVID-19 pandemic. Although many Kiwis are feeling that the economy has started to turn a corner, a rising number of young New Zealanders are stuck without a job. Fewer skills and less experience makes it easy to cut young workers, and harder for them to find a replacement job. But just as importantly, the support for our youngest Kiwis to press ahead in life is already feeling the pressure of the economic slowdown.
There’s a substantial need to continue supporting New Zealand’s young people so that when the economy recovers, New Zealand is starting out on the front foot to power ahead into the future, rather than stuck on the back foot with our future talent waiting for the support to get ahead.
Youth bear the brunt of job losses…
Data from the Ministry of Social Development shows that the job losses for those aged below 30 have been significantly higher than for those aged 30-64. Since February 2020, the number of young people supported by the Jobseeker Support benefit or the COVID-19 Income Relief Payment (CIRP) rose by 75%, representing 7.2% of all young people aged under 30. Support for those aged 30-64 rose 52%, representing 3.4% of that age bracket in New Zealand.
The rise in youth unemployment underscores the tough position in which young people find themselves today in the jobs market. With the least experience, and fewest skills, young people were an immediate target for businesses to cut to keep business operations viable. But it has left many young people scrambling to find a job, with available jobs low and potential employees high.
… and our future workforce might struggle
When we talk about young Kiwis, it’s not just those who are working or at university. It’s also those young people who are still at school and thinking about their next steps. And it’s also those families with young people who are struggling to determine how they’ll give their kid the best boost in life.
Stats NZ recorded that in 2019, 151,700 children were living in households that experienced material hardship. With nearly 66,000 additional Kiwis supported by the government since the Level 4 lockdown, even more families will currently be feeling the pinch. Families will be struggling to meet their costs with a smaller household budget.
Not-for-profits feeling the squeeze, but there are still Kiwis with money
At the same time, there are a number of organisations across New Zealand’s not-for-profit sector, that provide services that Kiwis rely on, who are also struggling. Ambulance service St John is looking to cut staff to fill its funding gap. Other organisations that also provide support to young New Zealanders to get ahead in life are also under pressure, as their funding dwindles with donations and financial support become ‘nice-to-haves’ for many.
Getting older generations to back those in need?
With support particularly for young people now more important than ever, how can Kiwis who are in a comfortable financial position support those less secure?
One of the groups which is more protected during the current economic downturn is those supported by New Zealand’s superannuation system. Recently described as “the jewel in New Zealand’s social welfare crown”, there will be a significant number of the 809,000 NZ Superannuation recipients who are in a stable financial position who could keep the wheels turning for future generations.
Often the generation divide descends into generation warfare, with “Boomers” pitted against “Millennials”, with avocado on toast and houses thrown around as weapons. But now more than ever, there’s an opportunity for those in the older generation who can afford it, to help those who are looking to make their own way in life.
There’s a growing trend of those on NZ Super who don’t necessarily need the additional income to support other causes, with Spend My Super, one organisation that was set up by superannuitants to put the money, that they might not need, to better use. For those that can afford it, it’s a good way for one generation to support the up-and-comers amid a time of uncertainty.
Young people are key to our post-COVID economic future
Moving ahead, getting New Zealand’s young people ready for and operating across the New Zealand economy will be critical as we adjust to a post-pandemic environment. We’ll need new ideas and innovations to get the country back on track, with outside-the-box and flexible thinking being key tools for young people growing up in New Zealand today.
But we’ll only be able to reap the rewards of new ideas if we have young people in a position to advance them. And without support now, New Zealand risks losing the talent we want to be able to rely on in years to come. Support for our young people – from school-aged kids to unemployed yo-pro, to new university and polytech grads – is important to create and maintain a path forward to developing skills and jobs. Without this support, New Zealand’s talent pool will stagnate, as will our opportunity to rebuild better. So, for those that can help, don’t think of it as a cost right now, but instead as an investment for the future.
Brad Olsen is a senior economist at Infometrics and was a recipient of a First Foundation scholarship. First Foundation is a funding recipient of Spend My Super, a community of New Zealanders who pool donations to solve child poverty. Join their ‘super community’ or donate at spendmysuper.org.nz