Youth unemployment hits crisis levels in New Zealand as AI adds uncertainty

According to the NZ Institute of Economic Research, unemployment among 15- to 19-year-olds has reached 25.3% and among 20- to 24-year-olds 12%, even as the national unemployment rate stays relatively unchanged. Economists David Hamill and Sarah Hogan describe the situation as a "crisis level" of joblessness, under-utilisation, and NEET (not in employment, education or training) rates. They point to COVID-era fiscal restraint, policies that prioritized work incentives over job creation, and a shortage of suitable positions as key contributors.

The rise of AI adds further doubt, prompting some employers to pause hiring for roles likely to be automated, while young people doubt the return on education investments. Additionally, the share of low-skill migrant workers has grown, especially in construction, retail, food, and accommodation, squeezing opportunities for local youth. NZIER concludes that structural challenges may keep youth unemployment high even if the broader economy recovers, calling for a forward-looking workforce strategy.