Unemployment risk for both young and old

New Zealand’s economic recession and the shrinking labour market may impact particularly badly on young and older workers, if we follow British trends.

There, analysis of the workforce shows that it is increasingly difficult for people under 24 and over 50 to find work if they lose their jobs. This is a worrying trend as some economic commentators predict up to 50,000 job losses in New Zealand over the next 6 months. Here, Department of Labour Household Labour Force Survey (HLFS) results for the December 2008 quarter showed the unemployment rate rose from 3.9% to 4.6%, the highest rate for six years. In past New Zealand recessions, such as that in 1991-92, there was a larger than usual rise in youth unemployment, according to the Department of Labour’s Labour Market Analysis team.

Young workers are more vulnerable to downturns in labour market conditions due to their lower skill levels and less work experience and so are more likely to experience larger changes in unemployment rates than the general labour force, the Department says.

With older people, however, it may be harder to obtain accurate unemployment figures because more older workers tend to withdraw from the labour market entirely following job loss, according to an OECD report, “Live Longer, Work Longer”.
“Once inactive, they are then less likely to move back into work than their younger counterparts”, the report says. This leads to the loss of the skills and experience which older workers could contribute to the economy.