200,000 job losses predicted

Stuff reports:

Westpac is forecasting 200,000 jobs will be lost in New Zealand as a result of the response to the coronavirus pandemic.

Chief economist Dominick Stephens estimated that economic activity during the four week lockdown would decline by a third, despite the Government and the Reserve Bank having “done a lot to calm financial markets”.

It was obvious the country was going into a “severe economic crunch”, he said.

Stephens said his feeling was that GDP in the three months to June would fall by more than 10 per cent “which is completely unprecedented in our lifetimes”.

That would make it a depression, not a recession.

It is beyond belief that Labour are continuing with a hike in the minimum wage next week, with projections of 200,000 job losses. The minimum wage hike won’t just add to the job losses, but it will make it harder to create jobs once the depression is over.

“But our early is estimate is that about 200,000 jobs will be lost, which is about 7 per cent of the workforce.”

That would take our unemployment rate to 11%.

The priority after this is over must be job creation, and a big part of that is reducing costs on businesses so they can afford to hire again.