Young Kiwis across the country 'bearing the brunt' of economic downturn

Tuesday, 4 August 2020

Staff at The Warehouse Blenheim have been informed of a “proposed” restructure.

Young people have been hit hardest by job losses as New Zealand continues its economic recovery against Covid-19.

Infometrics senior economists Brad Olsen and Alistair Schorn presented at a Marlborough Chamber of Commerce event on Monday.

Olsen said young people were “bearing the brunt of this economic downturn”.

“If you’re over 30, you’re starting to regain jobs not too bad, if you’re in the under 30 bracket, you’re in a pretty hard place,” Olsen said.

Cotton On in Blenheim’s central business district closed last week.

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Infometrics senior economist Brad Olsen said more economic pressure is to be expected, as Government support such as the wage subsidy finishes.

“They’re [young people] trying to get on the job ladder, trying to start a family or get on the property market, but they’re losing their jobs left, right and centre.”

In Marlborough, retail store Cotton On had closed and the Warehouse had confirmed a national restructure applied to the Blenheim store.

A spokesperson for the Warehouse said the restructure was a “proposal” at this stage, so they could not confirm how many jobs would be impacted in Blenheim.

The $400m set aside to support tourism in the Budget has now been fully committed.

In April, Vines Village Cafe said it would close on May 13 and the Café, Deli and Golden Mile Brewing Tap Room were for sale.

Olsen said it was tourism, retail and hospitality industries being hit hardest.

“What we’re finding is that it’s tourism or not,” Olsen said.

“If your industry is very focused around tourism, that is going to be very hard to recover from.

“If you’re in anything else, especially food-based primary production, that is going to put you in a much stronger position moving forward.”

In Marlborough, tourism made up 7 per cent of GDP and 12 per cent of employment. The wine industry made up close to 20 per cent of GDP. Secondary industries, which included wine production but excluded grape growing, and other manufacturing, made up close to 35 per cent of the region's economy.

A report on the economic impacts of Covid-19 in Marlborough, by Infometrics, estimated in May that employment “will shrink by around 2600 jobs”.

At the Chamber event, Olsen said the unemployment levels they had originally predicted had not been as bad as they initially thought. However, financial support from the Government was expected to end soon, which would create more pressure.

“We’re expecting that spending will again soften because we do have that wage subsidy running out, mortgage holidays will finish and Covid income relief payments are finishing up too,” Olsen said.

“There’s been 67,000 across the country that have lost their jobs and gone onto Government support in the last five months.

“Those 67,000 job losses came through when the Government was pumping $13 billion worth of stimulus through with the wage subsidy.”

He said Marlborough's economy was trucking along as “best could be expected”.

“There’s a 59 per cent increase from last year in the number of people that are out of jobs, it’s roughly 500 more,” he said.

“That’s 500 families, who are now on anywhere from $250 to $490 a week. It’s not easy.”