When the organisation that sets New Zealand’s interest rates starts worrying out loud about entry-level hiring, it is worth paying attention. Reserve Bank governor Anna Breman told Parliament this month that AI could blunt the employment growth that normally follows an economy picking up — and that young people, looking for their first job, are the ones most exposed in the short term.
🔍 THE BOTTOM LINE
The Reserve Bank has flagged AI as a reason economic growth might not translate into jobs as reliably as it used to, with governor Anna Breman telling MPs the short-term risk falls hardest on young people. The concern is less “robots take all jobs” and more specific: the routine tasks graduates used to cut their teeth on are the ones AI now does, which threatens the ladder that turns novices into senior professionals. Economists caution against over-reading the link, but the pattern — weak graduate hiring in a soft labour market — is visible in NZ’s own youth unemployment numbers.
What the Governor Actually Said
The warning came via RNZ’s report on the Reserve Bank’s monetary policy statement and Dr Breman’s appearance at the finance and expenditure select committee. In the statement itself, the monetary policy committee agreed growth in economic activity “might not lead to the increase in employment that would normally be expected, if businesses are relatively more focused on efficiency and technology investment in the short run.”
Breman was more direct in person. Businesses could use technology to create productivity gains, which would normally create more jobs, she told the committee — but there was discussion in New Zealand and overseas about whether some employers might be reluctant to employ younger people and deploy AI tools instead. She did not think it would be a problem in the medium term, but said it could be an issue in the short term, particularly for young people.
It is a measured statement, not a prophecy. The governor of the central bank is describing a scenario risk and a time horizon — not claiming mass displacement is under way.
The Numbers Behind the Worry
Young people have had some of the sharpest increases in unemployment in recent times. Youth unemployment sits at nearly three times the rate of the wider working-age population, and reporting earlier this month found youth joblessness hitting poorest communities hardest.
The usual caution applies, and one expert made it explicitly. Auckland University professor Rod McNaughton told RNZ: “We should be careful about jumping from high youth unemployment to saying AI is causing it. The evidence does not yet support that conclusion.” A soft economy does most of the damage on its own — but AI changes which tasks organisations need people to do, and many of those tasks are exactly how young people traditionally entered professional work.
“The risk is not simply that AI eliminates jobs,” McNaughton said. “It may remove some of the first rungs of the career ladder.”
The Ladder Problem, From the People Standing on It
University of Otago student Ella Lord told RNZ she felt lucky to have a graduate role for next year, because many of her classmates do not. “Otherwise, how are people ever going to be able to get their foot in the door?” Her observation about entry-level ads demanding a year or two of experience lands differently when the jobs that generate that experience are the ones being automated.
Otago associate professor Paula O’Kane — the same HR researcher who featured in this month’s coverage of New Zealand’s AI-generated application flood — told RNZ she was “very worried.” Leaders cut their teeth on the entry-level jobs AI can target, she said, and combined with economic pressure, fewer graduate opportunities mean students taking on more study and more debt. Her warning to employers: think now, or discover in five to ten years “that they haven’t got the talent.”
Recruiter Hayley Pickard of Fortitude Group framed it as a succession problem with a long fuse. “If businesses remove those opportunities now, where will their experienced workforce come in five, 10 or 15 years?” She noted engineering and manufacturing already have ageing skilled workforces and too few apprentices — and that AI “cannot replace the years of hands-on learning required to become a capable machinist, toolmaker, engineer or tradesperson.”
Where the Optimists Have a Point
This is not a one-sided story, and the evidence for a jobs apocalypse remains thin. American research has repeatedly found the disruption concentrated on new graduates rather than the broader workforce. Counterintuitively, US data shows the companies spending the most on AI are also hiring more people, and firms that cut for AI often end up rehiring the workers they let go. MBIE’s own modelling, released under the OIA, found just 2 percent of NZ occupations face high AI automation risk, while 36 percent have high augmentation potential.
There are also practical responses that do not require waiting out the economy. The consensus among the experts RNZ quoted is that the transition from education into work needs redesigning, not abandoning: employers using AI to help junior staff contribute sooner rather than replacing the junior rung entirely. New new-collar pathways that skip the degree requirement are emerging globally, and New Zealand firms are still hiring — PwC’s barometer found AI-related job ads more than doubled here in a year.
McNaughton’s framing is the fairest summary: the policy question is not how to protect entry-level jobs from AI, but how to redesign the move from education into work “when some of the tasks that historically made it economical to employ and train a novice can now be done by technology.” Employers who answer that question first get first pick of the next generation — the ones who answer it late will, as Pickard says, be hunting for experienced staff in 15 years with nobody in the pipeline.
FAQ
Is AI causing youth unemployment in New Zealand? Not proven. Auckland University’s Rod McNaughton told RNZ the evidence does not yet support that conclusion; the soft economy is the more immediate driver. What AI does change is the mix of entry-level tasks — the routine work juniors traditionally learned on is the work most exposed to automation.
What did the RBNZ governor say about AI and jobs? In the September monetary policy statement, the committee noted growth might not lift employment as usual if businesses focus on efficiency and technology investment in the short run. Governor Anna Breman told the finance and expenditure select committee this could particularly affect young people in the short term, while expecting no problem in the medium term.
Which New Zealand jobs are most at risk from AI? MBIE’s analysis puts only 2 percent of NZ occupations at high risk of full automation, with 36 percent having high augmentation potential. The exposure concentrates in routine white-collar tasks — which overlaps with the work graduates traditionally use to build experience.
What can graduates do while entry-level hiring is weak? The experts’ advice points the same way: target sectors with genuine shortages (trades, engineering, manufacturing, AI-adjacent roles), use AI skills as a differentiator rather than a threat, and look for employers who actively train juniors — PwC found NZ AI job ads more than doubled in the past year.
— CJ Murden, editor of Singularity.Kiwi. Former digital technologies teacher, author of AI-focused books. Writing with a New Zealand focus.
