Economist Brad Olsen warns burnout of Kiwi workers could push economy close to 'breaking point'

A leading economist is warning the burnout of Kiwi workers could push the economy close to "breaking point".

It’s no secret the Omicron outbreak has stretched the Kiwi workforce, as staff forego holidays and work extra hours to cover for their colleagues who are isolating, leaving many feeling burnt out.

Infometrics principal economist Brad Olsen has told AM previously its data has shown up to 300,000 people have been off work during the peak of the Omicron outbreak because they are either isolating with COVID-19 or they're a household contact. 

"We know that people have been working a huge amount throughout the COVID-19 pandemic over the last few years to keep the economy ticking over," he told AM Early host Bernadine Oliver-Kerby.

"We know that the numbers are suggesting that things are in an alright position, but you worry with so many people off work we are sort of burning everyone out, burning the candle very much at both ends to keep the lights on."

Olsen said some of the data is contradictory as even though 300,000 people have been off work, the amount of work done in the economy was only 0.2 percent lower than normal.

"That surprised us as we were able to keep the economy going with so many people out of work," he said. 

"Digging through the numbers, what we are very much seeing is other people who are still employed, still in the office, they were very much trying to pick up the slack and keep things moving," he said. 

"But you do worry you can only do that for so long as at some point people are going to be too burned out to continue."

One major issue New Zealand could face over the next two to three years is brain drain - with Kiwis packing their bags and heading overseas for their OE. 

Ministry of Business, Innovation, and Employment predicted that 50,000 New Zealanders will leave for an OE or work, after two years of COVID-19 restricting international travel.

Olsen said this could cause a "real challenge" in the future. 

"What was surprising is we know there was an obvious increase in the number of people off with COVID-19, but you do look forward and we do know we are having a real challenge around the brain drain and actually finding talent," he told AM. 

"But at the moment, if we are trying to use our current workforce and squeeze absolutely everything out of them, the worry is, well do they have the ability to take time off to re-charge or are we sort making them run and run until they collapse." 

Infometrics principal economist Brad Olsen.
Infometrics principal economist Brad Olsen. Photo credit: AM

Olsen worries with the lack of employees or staff too burnout to work could push the economy to "breaking point". 

"That's the sort of thing, where at some point we are pushing closer and closer, in my mind to breaking point, where the economy goes we have a lot of work to do but there just isn't the people to do it," Olsen said.

"We know that some analysis of leave data from Australia points towards a 24 percent increase in the amount of leave people have. We know they [employees] are storing leave up for longer because they haven't been able to take it of course … but increasingly everyone is going ‘if I take a break now, I might be leaving the team out of it a bit because they are not going to have enough resources to keep going.’"     

Infometrics estimates suggest currently there are still about 100,000 people off work either isolating or having COVID-19.

Watch the full interview with Brad Olsen above.