Introduction
New Zealanders were told that better days were ahead as the country steered its way out of a recession. But for many, life hasn’t become easier.
The rising cost of living, weak wage growth, and job insecurity continue to impact households. While the government points to economic improvement, the reality for many is very different.
Is unemployment truly dropping? Are wage increases making a difference? And why are so many skilled workers leaving?
This article examines the numbers behind the claims and what government policy changes mean for everyday people.
Unemployment Figures: Are More People Back in Work?
Unemployment has risen to 4.5% in early 2024, up from 3.2% in 2022. The latest figures from Stats NZ show that while the government highlights job creation, the reality is more complex.
Industries like construction and retail have cut jobs due to slowed economic activity, and regional towns are struggling to create new employment opportunities.
The government has invested in job training programs, but many unemployed workers say they need more than short-term upskilling. They need stable, long-term jobs that provide financial security.
One concern is the rise in underemployment—where workers have jobs but not enough hours to make ends meet. Many are forced into casual or gig work, which offers little stability and few benefits.
So while the official unemployment rate suggests recovery, the lived reality for many Kiwis is continued financial stress.
Low Wage Growth: A Pay Rise That Barely Covers Inflation
New Zealand’s minimum wage increased to $23.15 per hour in April 2024, but inflation has already eaten into any benefits this provides.
Living costs continue to outpace earnings, making it harder for workers to afford essentials like rent, groceries, and fuel. Some businesses argue that raising wages further will lead to higher costs for consumers, creating a vicious cycle.
Meanwhile, middle-income earners—teachers, nurses, and public sector workers—are seeing little movement in their salaries. Many report feeling worse off than they did five years ago due to rising mortgage rates and household expenses.
Wage growth needs to match inflation for economic recovery to be meaningful. Otherwise, working Kiwis will continue to feel trapped, even as employment numbers improve on paper.
Brain Drain: Skilled Workers Leaving for Better Opportunities
One of the biggest concerns is the “brain drain”—the increasing number of skilled New Zealanders leaving for Australia, Canada, and the UK.
In 2023 alone, over 30,000 people left New Zealand permanently, many of them young professionals looking for better salaries and lower living costs abroad.
Australia’s higher wages and lower cost of living continue to attract Kiwis, particularly in healthcare, engineering, and IT. Employers here struggle to retain staff, and businesses warn that a shrinking skilled workforce could slow economic growth further.
Efforts to bring workers back have had limited success. Unless wages and career opportunities improve, the loss of talent will continue.
MSD and Oranga Tamariki Changes: What It Means for Youth
Recent government changes to MSD (Ministry of Social Development) and Oranga Tamariki aim to reduce welfare dependence and improve youth outcomes, but they have sparked controversy.
New rules make it harder for young beneficiaries to receive long-term support, shifting the focus to employment and education pathways. While some argue this will encourage self-sufficiency, critics warn that it may push vulnerable youth further into poverty.
At-risk youth, particularly those leaving care, face challenges finding work due to a lack of qualifications and support. Advocacy groups say cutting benefits without strong job placement programs could leave many without a safety net.
How these changes play out in the coming months will determine whether they help or harm New Zealand’s most vulnerable young people.
Conclusion: Is Economic Recovery Reaching Everyone?
The government says the economy is improving, but for many New Zealanders, the struggle continues.
Unemployment rates tell only part of the story. Wages remain stagnant, living costs are high, and thousands of skilled workers are leaving. Changes to MSD and Oranga Tamariki may shift young people off benefits, but without proper support, they risk falling through the cracks.
The question remains: Is the recovery real for everyday Kiwis, or just another statistic on paper?
What do you think? Are things improving, or is it getting harder? Let us know in the comments.
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