A report by the Salvation Army indicates more older people are working past retirement age and may be crowding teenagers out of the workforce.
Titled The Growing Divide, the report says the number of over-65s in employment rose from 14% at the end of 2006 to nearly 20% by the end of last year.
It estimates more than 40,000 teenagers aged between 15 - 19 have disappeared from the labour market.
Author Alan Johnson told Nine to Noon a growing number of over-65s are taking up low-skilled jobs to stay in the labour force and young people may be missing out on jobs because of their lack of experience and skills.
It is the fifth State of the Nation report by the Salvation Army.
Emeritus Professor Ian Pool who retired from full-time work at the age of 73, says New Zealand is squandering a window of opportunity.
But he also says older workers contribute to a well-rounded workforce.
The Employers and Manufacturers Association says it would be stupid for businesses not to retain older staff.
Spokesperson Kim Campbell says older people's skills and experience should be utilised but youth unemployment is a social ticking timebomb and needs to be addressed.
Poor marks for child poverty
The report gave the Government a C- for its efforts to deal with child poverty and a D for the level of children at risk.
The report also suggests there are few aspirations for children and young people in this country, and the Government has all but given up on any serious efforts to solve child poverty and youth marginalisation.
The Green party says there has been no progress on reducing rates of child poverty and child abuse in the past year.
Labour is making renewed calls for the Government to broaden the scope of a Green Paper on vulnerable children.
However, Social Development Minister Paula Bennett says the Government is committed to tackling poverty by growing the economy and providing opportunity through education, training and jobs.
She says a ten year children's action plan will be drafted once submissions close on its Green Paper on Vulnerable Children.