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Recent key developments in MAKE│NZ
We come to you this week with another question – don’t worry, this one does have to do with the rest of the article and the responses are anonymous…
Event Reminder –
NZ Hardware Meetup will be hosting ‘Nerd Night‘ in Auckland with online access. While they already have some speakers lined up, they have an open casting call for any other tinkerers, hackers, and builders who’d love to share some innovations.
Nerd Night will be on Wednesday, August 27th from 5:30 to 8:30 – if you’re interested in presenting or tuning in you can find out more details HERE.
Notice from the Community –
One of our members has an overflow of Dacron offcuts they’d love to give away to someone who can use it or recycle it. If you or someone you know would like some Dacron – perhaps you’re re-upholstering some furniture or your local school could do with more arts and crafts supplies – please let us know and contact either dieter@makenz.org or sabine@makenz.org.
Recent key developments in New Zealand and The World
In general, labour markets are expected to follow the rules of supply and demand. That means, among others, that it is easier to fill vacancies for low- or semi-skilled jobs, because the pool of unemployed in that category is usually bigger than that for those with more advanced, and more specialised skills. We see those expectations being met in New Zealand and Australia, but the situation gets a bit more complicated when we look at countries like Germany, or the USA.
And, should you make it to the very end, you’ll find how a piece of Kiwi ingenuity can help to address a shortage in low-skilled labour.
•The ‘conventional wisdom’ around labour market dynamics appears to be quite straightforward, following the rules of supply and demand: the higher the rate of unemployment, and the lower the skills levels required for the job, the easier is it to fill a vacancy. The latter because generally the pool of less-skilled labour is greater than that for those with more advanced, and more specialised skills.
For New Zealand and Australia, those simple rules seem to apply when we look at key indicators. On the supply side in New Zealand, the lower the level of education, the higher the risk of unemployment:
On the demand side, across-the-board online job advertisements have been steeply declining since about Q3/2022, dropping close to the absolute low for the past 13 years during the COVID-19 pandemic. This is in line with the economy declining (in terms of GDP per capita) since 2022.
If we look at demand trends in relations to levels of skills and education, the graph below shows the decline over time in online advertisements for jobs requiring low(er) skills, and low levels of formal education and training, for Q1/2025. The five-year data is less clear-cut:
There are no official Time-to-Hire or Recruitment Difficulty statistics available for New Zealand, but recruitment consultancies report time-to-fill is contracting for lower-skilled roles due to a surplus of candidates.
For Australia we see similar supply and demand dynamics:
In terms of the relationship between rates of (un)employment and education, again the picture is similar:
Looking at the demand side, we see highest growth rates over the past five years for jobs at higher skills levels, with Community and Personal Service Workers as a bit of an outlier, but that category spans a wide range of skills levels within the group (n.b. Skill Level 5 is the lowest category).
Australian government statistics also track Time-to-Hire and Recruitment Difficulty. Across-the-board, vacancies for jobs requiring lower skills levels are easier to fill, with the gap narrowing in a tight labour market. The graph below shows the proportion of employers reporting difficulties to fill vacant positions:
When we look at the breakdown by jobs and industry, the general picture still holds but becomes less clear-cut, with, for example, labourers being the only category for which it actually has become harder to recruit in Q1/2025, compared to a year earlier:
•What is the situation in other countries? Not quite the same, at least if we take Germany and the USA as examples.
On the supply side in Germany, unemployment overall is relatively hight at 6.3%, and very high (20.9%) among those with no vocational education or training [VET]. It is much lower for those with VET (3.4%), or with a university degree (2.9%).
On the demand side and across all categories we see a similar curve as that for New Zealand:
What we see here is a reflection of the fact that the German economy has been in a recession since the start of 2023.
When we look at the breakdown of demand by skills levels, however, we find a different picture than for Australia and New Zealand:
In other words, the shortage is greatest in sectors where most jobs are semi-skilled or even unskilled. Part of the reason may be that labour supply in Germany is affected by two developments that are gradually gaining momentum – workers from Eastern Europe, including Poland, are finding more attractive employment at home, and, concurrently, efforts to stem (illegal) migration are beginning to have an impact. Workers from both of these pools tend to be over-represented in hospitality and in healthcare – especially home care for the elderly. Moreover, for both groups there are estimates of high levels employment ‘off the books’. In the home care for the elderly, for example, it is estimated that there are as many legally employed people as there are illegals(mostly females from Eastern Europe). And as the pool of illegals diminishes, more of these jobs will be pushed into the ‘legal market’, increasing the number vacancies.
But there is an underlying trend at work here, too, as pointed out by the head of the German Institute for Employment Research, Herbert Brücker: Over the past decade, the number of people employed in low-skilled jobs has risen by 23%, almost as much as for specialist occupations and experts (31%). The number of people employed in skilled jobs in between the above categories, on the other hand, has only risen by 3.3%. According to Brücker, this is due to the fact that a lot of the semi-skilled workers fill roles that are more difficult to automate.
We’ll have a closer look at this – automation specifically taking out skilled jobs – in next week’s edition.
And in the US? After the COVID-19 shock, but unlike for Australia, New Zealand and Germany above, the overall unemployment rate has been flat-lining at around 4% since early 2022. The breakdown by educational attainment shows the usual picture:
A high-level breakdown of unemployment by industry shows durable goods manufacturing and financial activities at levels indicating full employment, but neither agriculture nor construction are considered in this analysis.
A snapshot of the demand side in May 2025 (vacancies that remained unfilled) largely confirms the picture above.
| Industry | Rate of vacancies remaining unfilled in May 2025 * |
| Leisure / Hospitality | 6% |
| Wholesale / Retail Trade | -14% |
| Financial Activities | 55% |
| Manufacturing (Durable Goods) | 46% |
| Manufacturing (Nondurable Goods) | 8% |
| Professional and Business Services | 18% |
The other important part of the picture of the US labour market is the number of ‘undocumented’ workers that play a key role some sectors:
Parts of the agricultural sector have even higher proportions of undocumented workers, with 42% of crop farm workers being undocumented, for example (2022 figures), and there are regional variations, with California showing high rates of undocumented workers in particular. Manufacturing may have a lower share of undocumented labour, but the absolute numbers are still high, and the share is much higher in food processing (15%). The impact on the latter when ICE (Immigration and Customs Enforcement) agents knock on the door, even of a business that has gone a long way to ensure that its employees are legal, has been described in a recent New York Times Report.
In addition to that, there are, for example, approximately 532,000 migrants that were given temporary parole to remain in the country (and work) under the Biden administration. That parole has now been revoked, and these people are liable to be deported.
The consequences of all this will be felt most acutely in agriculture, where farm labour shortages have been a problem well before the current administration and are likely to restrict the availability of certain agricultural products from time to time.
The looming shortage of low- or semi-skilled workers will, however, also hit the manufacturing sector, where we have full employment already and the government is keen to drive an increase in manufacturing activities.
•Last, but not least, the UK. Staying with food processing, the UK food processing sector has long relied heavily on migrant labour—62% of the workforce in meat processing was sourced from outside the UK prior to recent restrictions, for example. New rules requiring higher salary thresholds (£38,700 minimum for overseas workers), coupled with limits on which jobs qualify as “skilled,” have made it more difficult for food businesses to recruit essential foreign workers, particularly for roles such as butchers, poultry, and fish processors.
Part of the answer to this will have to come from automation, and here the ingenuity of New Zealand manufacturers can be part of the solution, as this recent case study demonstrates:
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