'Terrifying' mortgage hikes and food costs force people into second jobs

Monday, 13 March 2023

Marcia Martin works multiple jobs just to stay afloat amid rising interest rates and cost of living increases.

The cost of living crisis, with spiralling food costs and interest rate hikes, is forcing people to take second jobs, which an economist says could be “dangerous”.

By day Debra Middleton plans executive meetings at a top corporate, by night she works at a gas station. Marcia Martin is a teacher aide at a special needs school, but in the evenings she’s a respite carer and cleaner. They are amongst the growing number of New Zealanders taking a second job “just to cover the bills”.

The recent Food Price Index shows fruit and vegetables prices rose 23.1% in the year ended February 2023, as extreme weather events continue to impact produce. Food prices as a whole were up 12% on the previous year.

Home loan borrowers have been hammered by interest rates hikes from record lows of about 2% to about 6.5% for two-year fixes.

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Marcia Martin says it’s unfair that people are forced to work extra jobs while banks make “megabucks” on mortgages.

To “stay afloat”, Tauranga’s Marcia Martin now has three jobs which she juggles around caring for grandchildren who live with her. She’s an occupational therapy assistant at a special needs school, but at night she’s taken on cleaning work and respite care.

“My mortgage could double when I come off fixed rate. It could be $1000 a month more. It’s terrifying. I was panicking how I was going to come up with the extra, so looked for other jobs outside school hours.”

Martin is still just scraping by – rising food and mortgage bills ate through any savings she had.

“We don’t do things like eat out. I watch everything I spend. I’m due to have a smear test but can’t spend $35. I was in the supermarket about to put toilet roll in the trolley, then thought, oh we’ll make do with what we have.”

Debra Middleton says taking a second job is the only option when faced with rising bills

It’s unfair that people who work so hard cannot make ends meet, and many people she knows are in a similar crisis, she says.

“Banks are making megabucks while normal people are crippled by interest rates. It’s wrong. The government needs to do more.”

Debra Middleton started her side hustle in a petrol station last month, and is working seven days a week, including weekends and nights, “just to get by.”

Being forced to take on additional work just to pay bills could be dangerous when there’s no end in sight, said economist Matt Roskruge.

“It sucks that people have to do this. It’s particularly hard for single people as they only have one income.”

“I had no choice if I wanted to keep my home. My mortgage has shot up with rising interest. Where am I supposed to get that extra money? … So it got to a point when it was the only logical step,” said Middleton.

But, after slogging extra hours, she said it was a shock to see the amount of secondary tax.

Recruitment manager at OneStaff, Nathan Lewis, has had more enquiries about weekend or night work.

Auckland University of Technology Professor of Economics Gail Pacheco, who is also director of the New Zealand Work Research Institute and co-author of a study into father’s involvement in childcare.

“There’s plenty available in cleaning, factory or warehouse work and labouring. For safety, if someone is taking on night shifts, we check they’re not working too many day hours.”

And Trade Me listings hint at the trend – like a part-time surveyor role in Queenstown for a “resident looking for a side hustle”, and Cluey Learning looking for online tutors who “work from anywhere and around your own schedule” for $30 an hour.

Matt Roskruge, associate professor in economics at Massey University, said it was “a huge concern” that people were forced into another job to pay bills – especially those who were already vulnerable.

“It’s dangerous. There’s risk of burn-out, with fatigue and stress in seeing no end in sight… If parents are working all hours, household duties fall to the older children. I’ve heard of children in Auckland forced to leave school to supplement the family income, which is sacrificing their chance of higher income later in life.”

“It’s one thing to do a second job if you are choosing to save for something, for a short period of time, but if becomes a necessity to avoid poverty, it will affect physical and mental health of people already doing it tough.”

The government could ease the secondary tax burden, he said.

“I can’t see the rationale for the people who have to work the most having to pay the most tax.”

Gail Pacheco, economics professor at AUT and director, NZ Work Research Institute, said recent research showed that those who worked full time (30 hours or more per week), and wanted more hours were primarily motivated by low earnings.

“Underemployed full-time workers make $429 less a week on average than full-time workers who don’t want more hours – despite the fact that there is only one work-hour per week difference between the two groups.

We also found that of the full-time workers who want more hours, they would like an increase of 36% in their usual hours.”

Data from Statistics New Zealand showed the number of people with more than one job was 7.3% in December 2022.