Unemployment

The fall in the unemployment rate to 3.4% is excellent, and as much as one can debate around the edges issues such as definition of unemployed (it has been contsant fro decades) and how much is due to the incumbent Government, one can’t argue against having the lowesr rate on the OECD and the lowest in NZ’s recent history.

The economy has been very strong – so strong in fact it is remarkable the recent election was so close. If I was in a Government with a 3.4% unemployment rate I’d be looking to win by 5% to 10%.

It is useful to look at the issue of free trade and employment in the NZ context. The Greens, unions and a few misguided supporters claim free trade destroys jobs and is bad for a country, hence we need to have tariffs etc to protect jobs.

Well NZ has almost the least amount of protectionism in the world. Only a very few number of industries have tariffs and they are now very small and insignificant. Yet we have the lowest unemployment in the world basically. Hmmn the lowest level of protection and the lowest unemployment. Sorts of destroys the arguments from the Greens and friends. And do we even need to look at the unemployment rate in countries like France with huge levels of protectionism?