The New Zealand Council of Trade Unions Te Kauae Kaimahi says the country’s labour market is in crisis after the unemployment rate climbed to 5.6 percent, its highest level in more than a decade.
CTU President Sandra Grey says the latest labour market figures paint a bleak picture of an economy where unemployment is rising, wages are failing to keep pace with inflation and increasing numbers of New Zealanders are struggling to find secure work.
According to the latest data, around 171,000 people were unemployed during the June quarter, with the unemployment rate reaching its highest level since September 2015.
Grey says one of the most concerning trends is the growing number of people trapped in long-term unemployment. More than 69,300 people have now been unemployed for longer than six months, representing around 40 percent of everyone without work.
She says the latest figures demonstrate an economy that is “in the grip of an employment disaster” and argues the Government must take urgent action to reverse the trend.
The CTU also points to broader economic pressures affecting working New Zealanders.
With inflation sitting at 4.1 percent, Grey says wage growth is failing to keep pace with the rising cost of living. She says almost three-quarters of workers received pay increases of less than three percent over the past year, while 44 percent received no pay increase at all, leaving many households worse off in real terms despite remaining in employment.
According to the union movement, both public and private sector workers have experienced declining purchasing power, with fewer job opportunities also weakening workers’ ability to negotiate better wages and conditions.
The figures are particularly concerning for younger New Zealanders.
Stats NZ data shows unemployment among 15 to 24-year-olds has increased by 19.5 percent over the past year, while Māori and Pacific unemployment rates remain around twice the national average, highlighting persistent inequities in the labour market.
Grey says those disparities continue to disproportionately affect communities already facing higher levels of economic hardship.
The CTU also notes that the economy recorded 4.8 million fewer hours worked compared with December 2023, reflecting reduced demand for labour across a range of industries.
Beyond headline unemployment, the organisation says underutilisation remains a major concern.
There are now an estimated 440,000 underutilised people in New Zealand—those who are unemployed, underemployed or available for additional work—an increase of 32,000 people in just three months.
Grey says this broader measure suggests the official unemployment rate does not fully capture the extent of worklessness across the country.
The comments are likely to intensify political debate in the lead-up to the general election, with employment and the cost of living emerging as key issues for voters.
The Government has argued its economic policies are laying the foundations for long-term recovery, while critics contend the latest figures show many New Zealanders have yet to experience those benefits.
The CTU says New Zealand has choices about the direction of its economy, arguing greater investment in jobs, higher wages and a renewed focus on full employment should be central issues in the election campaign.
With voters set to head to the polls in November, the state of the labour market is expected to remain one of the defining issues of the campaign.
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