Saturday, July 20, 2024

Time for change in post-COVID workplace

The national Level 4 COVID-19 lockdown in March and April and Auckland’s repeated Level 3 lockdown has had major repercussions on the way New Zealanders work, according to a leading NZ academic.

Professor Alan Bollard (pictured), Te Herenga Waka – Victoria University of Wellington’s Chair for Pacific Region Business in the School of Government says New Zealand workers were now in “uncharted territory”.

“We have never been through this sort of event before, so we don’t know how bad the jobs damage is going to be. We also don’t know which sectors will be hit longer term.”

He said COVID meant that working from home had suddenly become a new way of life for many thousands.

“For those who enjoyed the experience of home working, going back into the office has never looked less appealing. For others, perhaps those unable to concentrate or find a quiet corner at home, or those missing the support and cameraderie of work colleagues, it was something to be endured for as short a time as possible.”

Professor Bollard says there has been “effective and fast cushioning” through the Government’s jobs subsidy, now extended three times.

“This means the unemployment data so far does not look too bad, but we know that will worsen as the subsidies terminate, which is inevitable as they are costing so much. It’s going to be a big political challenge to move to longer term arrangements that are better targeted,” he said.

“Those in marginalised/low-skill/low-wage/casual jobs are most at risk. Some of those jobs have already gone, and others will be displaced. That particularly impacts Māori, Pasifika, younger workers, and some migrant groups.

“We should look for policy to support the good parts of the gig economy, and also positive ways to incentivise those unemployed to where there is still strong demand, especially in the primary sector. The construction sector has already had ‘shovel-ready’ project support from the Government – but the problem there is getting projects through the thicket of expensive planning approvals in time.”

The work participation rate has dropped sharply, particularly hitting females and near-retirees, Professor Bollard said.

“One of the features of this COVID shock is that some of the data is quite confusing.”

“We had a huge reduction in GDP of 12.2% in the second quarter. Despite this, the unemployment rate did not move that much in the quarter – this is because of the jobseeker support schemes, which are now terminating but have not yet reflected in the employment numbers.

“However, looking behind the employment data, we see that the participation rate fell from 70.7% to 69.7%, much of which was women’s employment.

“In addition, the hours worked fell 10%, and the Statistics NZ Underutilisation Rate increased 15% compared with the previous quarter.”

There will also inevitably be an increase in business start-ups, he said.

“These are risky and many will fail. But local incubators and support agencies can do a lot to improve survivability and growth.

“New Zealand returnees with savings and skills will spawn some interesting propositions, but of course this will all take some time to eventuate.

“In terms of how well the tertiary education sector will weather the storm, we have encouragingly already seen an increase in domestic enrolments by students who have lost jobs, or fear losing jobs.

“But there is a need for students, workplaces and institutions to recognise the different skills required in future to ensure a modern and flexible workforce, particularly the importance of boosted IT proficiency.”

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