Monday, October 12, 2009

Another look behind unemployment statistics

Reading the following from today's NZ Herald one could be forgiven for thinking that we have come a long way.

Numbers on the unemployment benefit declined from a postwar peak of 177,000 in 1993 to 17,710 in June last year, but rose almost four-fold since then as the world plunged into recession.

Unemployment only a tenth of what it had been. Marvellous.

But wait.

In 1993 there were 63,700 people on sickness and invalid benefits. Add that to unemployment and you get 240,700.

Today add the 140,800 on sickness and invalid to the 60,660 on unemployment and you get 201,460.

Let's chuck the DPB in as well, 96,300 in 1993 compared to 106,600 now to get new totals of 337,000 in 1993 and 308,060 in 2009.

Just an alternative look at some numbers.

On the plus side one could argue that the picture is still much better because the population has risen by 25 percent since 1993. True.

One could also argue that the higher numbers on benefits other than unemployment mean total dependency is worse. How's that?

If we measured dependency in weeks (Sweden manages to) rather than at a point in time, today's statistics are almost certainly worse. That is because people spend much longer on invalid, sickness and domestic purposes benefits. That explains, in part, why the social security bill (now nearing $20 billion) continued to rise while numbers on the unemployment benefit dropped drastically.

The following show percentages of total caseload according to the periods spent continuously on that benefit alone (add in other benefits to account for transfer between benefits and the durations rise);


Less than one year 10.3
Between one and four years 31.0
Between four and ten years 29.9
10 years or more 28.8


Less than one year 52.5
Between one and four years 33.5
Between four and ten years 12.4
10 years or more 1.6


Less than one year 30.4
Between one and four years 36.1
Between four and ten years 23.4
10 years or more 10.2


Less than one year 88.9
Between one and four years 8.8
Between four and ten years 2.0
10 years or more 0.4

As you can see the stays on unemployment benefit are much, much shorter, as you would expect. In the early 1990s stays were comparable with 79 percent of recipients reliant for less than 1 year and 94 percent reliant for less than 2 years.

There are people on invalid's benefit with medical conditions that make it impossible for them to work. But there is growing acknowledgement that sickness and invalid benefits (called disability support pension in Australia and incapacity benefit in the UK) are de facto doles. Many gravitated to them over the past ten to fifteen years because of the physical and mental impacts of being long-term unemployed.

So make your own mind up. Have we come a long way since 1993? And have another quick look at the link. Should the Minister of Social Development really be looking so jolly?

1 comment:

Sinner said...

Have we come a long way since 1993?

A long long way since 1993. All downhill! The real problem - that you don't point out - is that Ruth, who did so much good for NZ, far far more than Roger, even her reforms didn't go far enough.

She was in the best position (since this year's budget) to not just cut but actually eliminate welfarism from NZ, and she didn't take the chance.

Of course, far better than the current lot, who increased taxes last time, are planning on a huge tax increase this time (ACC), and who actually put benefit levels UP!