Wednesday, November 18, 2015

National's New Zealand: Mass unemployment forever

Welcome to National's New Zealand, where business expects mass unemployment forever:

Business leaders and economists are signalling there will be no drop in unemployment for the next two years.

At the start of November figures from Statistics New Zealand showed unemployment hit 6 per cent in the September quarter, the highest level in 18 months, following a surprise drop in the workforce.

On Tuesday the Reserve Bank's quarterly survey of expectations, which gathers economic predictions from economists and business and industry leaders, showed no relief is in sight.

The survey showed participants expect unemployment to be 6.18 per cent in 12 months and 6.01 per cent in two years.

In each of the last four surveys expectations for unemployment have been rising, with the last survey in August predicting unemployment would be about 5.8 per cent in 2016 and 2017.

This is only a survey, and business could be wrong. But it does make their expectations clear - and they clearly have lost faith in National's ability to deliver jobs. Or want them not to. Because as the article points out, high unemployment isn't actually bad for business - it leads to "subdued wage inflation pressures". Or, in English, lower wages for you and higher profits for your boss. Which is exactly the policy goal. Because despite all Bill English's denials, high unemployment is government policy, something they have chosen to have. And if we want to change that choice, and see people back in jobs, we are going to need to change the government.