Friday, March 29, 2024

Regions face decline in worker numbers

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Declining fertility rates, internal migration to large urban centres and lower migration levels means young rural New Zealanders skilled in almost any aspect of the primary sector are likely to be in the box seat for the rest of their working lives.
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Former head of demography at the University of Waikato and professor of demography at Massey University Dr Natalie Jackson says issues the rural sector faces sourcing staff will only worsen in the coming decade.

“Young skilled people are an endangered species, in short supply and high demand. Unfortunately, a lot just don’t realise that and think they may one day face the unemployment their parents or grandparents may have faced,” Jackson said.

However, the numbers put that concern to rest.

Modelling done by Jackson indicates in the decade 2023-33 almost all parts of New Zealand can expect to experience a decline in the number of 20 to 69-year-old workers. Overall, 75% of territorial authorities (TAs) will experience this decline.

The regional exceptions are Auckland, North Waikato, northern Taranaki and small pockets of Manawatū-Horowhenua, Selwyn and Southern Lakes.

This “moderate” depopulation scenario has that decline ranging between 3-20%.

Even taking an optimistic scenario, where the immigration dial is turned up to 55,000 a year and the birth rate per woman aged 15-49 leaps from 1.7 to 1.9, the lift in regional working age growth is still muted.

Twenty-eight TAs (42%) would still see decline in their working-age populations.

“We would almost have to swamp NZ with 100,000 migrants a year to make a major difference, and we are already competing with other countries that are encountering this problem, including Australia,” she said.

The key drivers behind the population declines are already being experienced, and only likely to get worse are due to a combination of factors. 

At a big picture level NZ’s natural birth rate per woman aged 15-49 has declined from its peak of 4.1 in 1963 to be well below the replacement rate of 2.1. It now sits at 1.7, in line with most other Western nations.

“And this has been compounded by fewer women choosing to have children at all, and the proportion of women of childbearing age in the population is diminishing,” she said.

In the meantime, the proportion of the population living longer means NZ is adopting a demographic profile that currently has 16% of its population aged 65-plus in 2018, and 33% in the younger working ages 25-49 bracket.

All up, the working age population aged 15-64 years comprise 65%.

But by 2038, the 65-plus group will comprise 23% of the population, up 7% from today. The younger working age portion 25-49 will have dropped only slightly to 32.5%.

Jackson, however, stresses those numbers are an average for NZ, and in themselves less remarkable than the major differences rural regions can expect to experience.

In Thames-Coromandel, for example, the working age population of 15-64 years will slump from 54% to only 46% in 2038, while the 65-plus surges to 40%, well ahead of the national average of 23%.

“So, in these areas, they just won’t have the young people coming through,” she said.

Drilling into the working population, 60% of TAs in the coming decade will experience a decline in the number of workers aged 25-44, those often associated with entrepreneurial, innovative business start-ups.

Their more established cohorts in the 45-54 age bracket will also slide in numbers, declining in 84% of all TAs over the same time.

Almost all rural areas are also beset by their youngest workers aged 15-24 leaving for the bright lights of the four large urban centres.

This is something that has happened consistently since the mid-70s, but an effect only  exacerbated by more recent fertility declines.

Jackson says after many keynote addresses on the challenges facing rural authorities in sourcing working-age people, she finds policy settings stuck frustratingly on growth models many regions simply are not going to experience.

“There needs to be a more strategic central government approach toward TAs with labour shortages to entice more people, both internally and internationally to these areas,” she said. 

“Aging-driven labour shortages can be projected and planned for well in advance, not left to the last minute as is currently the case”.

For young 15 to 24-year-olds who may represent unemployed potential in urban areas like Auckland, broad pastoral care would be needed to get them to move.

“You can’t just take them out of Auckland, and send them to the bottom of the South Island unassisted and expect them to make their own way,” she said.

The fact that a third of younger labour market entrants are Māori or Polynesian also brings a need for some cultural shifts and awareness about how they would be deployed in areas remote from their iwi or family.

The Government has declared it will be resetting its immigration policies, aiming to only seek out highly-skilled migrants. 

Jackson says it would depend on the definition of “highly-skilled” whether the primary sector would benefit, with many managerial positions in the industry capable of being described as such.

“But this issue is not going to go away. If I was looking at land-use for something labour-intensive like cherry growing, or alternatively for planting in pine trees, I would grow the pines,” she said.

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