1 00:00:00,040 --> 00:00:01,920 Speaker 1: When we left for the day off yesterday, we were 2 00:00:01,920 --> 00:00:03,600 Speaker 1: standing by for the jobs right. Of course, it came 3 00:00:03,600 --> 00:00:05,400 Speaker 1: in at five point one. It's one hundred and fifty 4 00:00:05,400 --> 00:00:07,840 Speaker 1: six thousand New Zealanders looking for work. One of the 5 00:00:07,920 --> 00:00:10,760 Speaker 1: standout numbers was the unemployment right now for fifteen to 6 00:00:10,840 --> 00:00:14,400 Speaker 1: nineteen year olds is twenty three percent, which is the 7 00:00:14,440 --> 00:00:17,800 Speaker 1: highest in the decade. Former Zerbank economist Michael Rodell's withetherus Michael, 8 00:00:17,800 --> 00:00:18,439 Speaker 1: morning to you. 9 00:00:19,200 --> 00:00:19,520 Speaker 2: Welcome. 10 00:00:19,880 --> 00:00:23,120 Speaker 1: Am I old fashioned? But at fifteen you've got nothing 11 00:00:23,160 --> 00:00:26,000 Speaker 1: to offer the economy and you shouldn't be registered as unemployed. 12 00:00:26,000 --> 00:00:27,920 Speaker 1: You should be in school or training, shouldn't you ur them? 13 00:00:27,920 --> 00:00:29,520 Speaker 1: A is that just old world thinking? 14 00:00:30,400 --> 00:00:32,199 Speaker 2: Well, that's tally true. I mean, if you're fifteen, you've 15 00:00:32,200 --> 00:00:34,080 Speaker 2: got to be at school, So I mean fifteen to 16 00:00:34,159 --> 00:00:38,360 Speaker 2: nineteen category has always been the numbers bunch shed an 17 00:00:38,360 --> 00:00:40,319 Speaker 2: awful lot of light on things, and you know most 18 00:00:40,360 --> 00:00:42,680 Speaker 2: sixteen year olds are in school as well. But remember 19 00:00:42,720 --> 00:00:45,840 Speaker 2: this isn't registered as unemployed. This is when the people 20 00:00:45,840 --> 00:00:48,400 Speaker 2: from SMZ sets New Zealand bring you up and say 21 00:00:48,680 --> 00:00:51,160 Speaker 2: are you working? If you're not working, were you're looking 22 00:00:51,159 --> 00:00:53,600 Speaker 2: for a job last week? Are you ready to start 23 00:00:53,640 --> 00:00:55,960 Speaker 2: work for a job. So if like my kids, you'd 24 00:00:55,960 --> 00:00:59,000 Speaker 2: happily have had a summer job over holidays, you just 25 00:00:59,040 --> 00:01:01,440 Speaker 2: can't fired one, even though you're going back to university 26 00:01:02,040 --> 00:01:04,959 Speaker 2: in February, you count as unemployed in these numbers. 27 00:01:04,760 --> 00:01:07,800 Speaker 1: Right, So what we're finding out is in a difficult economy, 28 00:01:07,880 --> 00:01:09,959 Speaker 1: it is the vulnerable who are hit the most most often. 29 00:01:10,040 --> 00:01:10,479 Speaker 1: Is that fair? 30 00:01:11,440 --> 00:01:14,280 Speaker 2: Absolutely? And young people definitely are the ones to bear 31 00:01:14,280 --> 00:01:16,679 Speaker 2: the brunt new entrance to the labor market when things 32 00:01:16,720 --> 00:01:18,760 Speaker 2: it tough. So this series you mean you quoted the 33 00:01:18,760 --> 00:01:22,399 Speaker 2: twenty four percent number, it's never got below about twelve 34 00:01:22,520 --> 00:01:25,080 Speaker 2: thirteen percent, even when the economy was at its strongest. 35 00:01:25,560 --> 00:01:27,399 Speaker 2: It's been up at these sorts of levels the last 36 00:01:27,440 --> 00:01:30,960 Speaker 2: couple of times unemployment surged. But we don't help ourselves 37 00:01:31,000 --> 00:01:33,839 Speaker 2: as well by having really high minimum wages for young people, 38 00:01:34,240 --> 00:01:35,840 Speaker 2: as you put it, often don't have a lot to 39 00:01:35,880 --> 00:01:37,640 Speaker 2: offer to the labor market starting out. 40 00:01:37,760 --> 00:01:40,240 Speaker 1: And so how long, even if the economy turns round 41 00:01:40,240 --> 00:01:42,040 Speaker 1: to the latter part of twenty five, how long before 42 00:01:42,080 --> 00:01:44,399 Speaker 1: they start to get mopped up in a growing economy 43 00:01:44,400 --> 00:01:46,399 Speaker 1: and the number of returns to some sort of normality. 44 00:01:47,240 --> 00:01:48,920 Speaker 2: Well, again, once you look at the last couple of 45 00:01:48,920 --> 00:01:51,680 Speaker 2: cycles of the early nineties and the global financial crisis. 46 00:01:51,800 --> 00:01:55,520 Speaker 2: Once the aggregate unemployment number stops, it starts dropping, you'll 47 00:01:55,560 --> 00:01:59,640 Speaker 2: see the young person one tend to drop away quite sharply. 48 00:02:00,360 --> 00:02:03,400 Speaker 2: We went from about twenty five percent to seventeen in 49 00:02:04,000 --> 00:02:06,440 Speaker 2: not much more than a year or so in twenty 50 00:02:06,720 --> 00:02:07,440 Speaker 2: twelve thirteen. 51 00:02:07,840 --> 00:02:10,600 Speaker 1: Do you agree broadly with the idea that by the 52 00:02:10,680 --> 00:02:12,720 Speaker 1: latter part of this year we're going to be better 53 00:02:12,720 --> 00:02:14,480 Speaker 1: than we are now or we just don't know? 54 00:02:15,520 --> 00:02:17,520 Speaker 2: Well, we just don't know, particularly with the Russians that 55 00:02:17,520 --> 00:02:19,919 Speaker 2: Trump's putting on the world economy, right, you know, the 56 00:02:19,960 --> 00:02:23,000 Speaker 2: trade war has temporarily been semi suspended, but who knows. 57 00:02:23,040 --> 00:02:26,960 Speaker 2: We will be very later this year. The trustrates coming down, Yes, 58 00:02:27,040 --> 00:02:29,240 Speaker 2: certainly things should be a little bit better domestically. That 59 00:02:29,280 --> 00:02:31,079 Speaker 2: the world's a really unsettled placed right now. 60 00:02:31,120 --> 00:02:32,880 Speaker 1: That is the truth. When you talk about interest rates 61 00:02:32,880 --> 00:02:34,400 Speaker 1: coming down in a week or so. The rb are 62 00:02:34,480 --> 00:02:36,560 Speaker 1: up for twenty twenty five is at fifty points. Do 63 00:02:36,600 --> 00:02:37,400 Speaker 1: we think do we need the. 64 00:02:37,320 --> 00:02:41,480 Speaker 2: Fifty Well, that's pretty much more promise for Christmas. It 65 00:02:41,560 --> 00:02:44,280 Speaker 2: certainly was the right course me. We fer to puts 66 00:02:44,360 --> 00:02:47,120 Speaker 2: beyond there as well, based on the inflation numbers that 67 00:02:47,160 --> 00:02:49,920 Speaker 2: we've been seeing recently that have been really low and 68 00:02:49,960 --> 00:02:52,200 Speaker 2: pretty near the point of the target rings out. 69 00:02:52,360 --> 00:02:53,960 Speaker 1: All right, Michael, good to talk to you appreciate it. 70 00:02:53,960 --> 00:02:57,000 Speaker 1: Michael Radell, former Reserve Bank economists. For more from The 71 00:02:57,040 --> 00:03:01,640 Speaker 1: Mic Asking Breakfast, listen live to Newstalks from six am weekdays, 72 00:03:01,880 --> 00:03:03,919 Speaker 1: or follow the podcast on iHeartRadio.