The Employers and Manufacturers Association (EMA) has stated that businesses are struggling and have “run out of grit.” The official unemployment rate increased to 4.3% on Wednesday, with predictions that it could hit 5% by the end of the year.
Alan McDonald, the EMA’s head of advocacy and strategy, said that the number of businesses seeking help with restructuring and layoffs doubled in April compared to the previous year. He added that businesses are finding it tough, similar to the economic conditions of the 90s.
McDonald also mentioned that the skills of incoming migrants do not meet the current demand, and businesses are worried about the job-readiness of young people leaving education.
Craig Renney from the Council of Trade Unions called on the government to formulate a plan to tackle unemployment. He highlighted that each job loss affects a family or household and could push thousands into poverty.
Renney pointed out that young people under 25, Māori, Pasifika, and women are overrepresented among the unemployed. Unemployment for those aged 20-24 has risen from 6% to 9.8% in a year.
Both McDonald and Renney agreed that it’s time to reevaluate the Reserve Bank’s inflation target and the use of the Official Cash Rate to achieve it.
