The OECD has delivered a mixed assessment of New Zealand’s labour market, praising the country’s resilient employment levels while warning that slowing wage growth, persistent regional disparities and widening inequalities threaten future prosperity.
The findings are contained in the OECD Employment Outlook 2026, which examines labour markets across member countries and highlights New Zealand as one of the few nations where workers have yet to fully recover the purchasing power lost during the cost-of-living crisis.
The report notes that while New Zealand’s overall labour market remains relatively stable, real wages remain close to the lows experienced during the height of inflation. Across the OECD, wage growth has slowed as economic uncertainty, easing labour market demand and weaker productivity growth begin to weigh on household incomes. New Zealand, alongside Australia, stands out as one of the countries where the recovery in real wages has lagged behind many comparable economies.
The OECD says geography continues to play a significant role in determining employment opportunities, incomes and long-term social mobility. People living in regions with fewer employment opportunities face greater barriers to securing well-paid work, with the report concluding that regional inequality remains a major challenge for governments seeking inclusive economic growth.
For Aotearoa, those findings carry particular significance for Māori communities.
Although the OECD report does not break down employment outcomes by ethnicity, New Zealand’s own labour market data shows Māori continue to experience disproportionately high unemployment. Statistics New Zealand reported the national unemployment rate at 5.3 percent in the March 2026 quarter, while Māori unemployment remained more than double that level at approximately 11.5 percent.
The disparity reflects long-standing structural challenges that see Māori more heavily represented in industries vulnerable to economic downturns, including construction, manufacturing and some primary sectors. Māori are also more likely to live in regions where employment opportunities are limited, reinforcing many of the regional inequalities identified by the OECD.
The report argues that improving productivity, investing in education and skills, supporting adult learning and making it easier for workers to move into better employment are critical if countries are to lift wages and reduce inequality. It also highlights the importance of ensuring regional economies can generate quality employment rather than relying solely on population movement to address labour shortages.
For Māori, the findings reinforce calls from iwi leaders, economists and employment advocates for greater investment in kaupapa Māori employment programmes, vocational training, apprenticeships and regional economic development that creates sustainable jobs close to home.
The OECD also notes that younger workers across developed economies are finding it increasingly difficult to establish themselves in the labour market, with youth unemployment rising faster than overall unemployment in many countries. That trend has implications for New Zealand, where Māori have one of the youngest populations in the country and therefore face a greater exposure to weakening labour market conditions.
While New Zealand continues to compare favourably with many OECD countries on headline employment measures, the report suggests future success will depend not simply on creating jobs, but on ensuring those jobs deliver higher productivity, stronger wages and more equitable opportunities across all regions and communities.
For Māori, closing the unemployment gap remains one of the country’s most significant economic and social challenges, with the benefits extending well beyond employment to improved health, education, housing and whānau wellbeing.
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