Thursday, February 04, 2010

The changing face of unemployment and benefit dependence

According to the NZ Herald;

New Zealand's unemployment rate has surged to 7.3 per cent, from 6.5 per cent, and now stands at its highest level since June 1999.


In June 1999 there were 148,573 people on the unemployment benefit.

Yet today there are only 66,328.

How is that? The labour force is larger so 7.3 percent should represent a larger number.

In June 1999 there were 81,863 people on a sickness or invalid benefit. Today there are 144,191.



The two columns have virtually reversed. But the situation is worse in terms of cost and outlook. The movement in sickness and invalid benefits only ever goes in one direction - up. The rate of dependence on these is greater because people stay on them for longer. That means the cost is higher (10,000 people on the unemployment benefit may represent 30,000 months dependence whereas 10,000 people on a sickness or invalid's benefit might represent 120,000 months.) And the prospects of leaving these benefits is lesser.

For a good many people a sickness or invalid benefit is merely a de facto unemployment benefit.

(Strictly speaking the chart label 2010 should read Dec 2009. I don't have time to change it now.)

7 comments:

Anonymous said...

I recently read in the Herald about a family who have a lawnmowing business and receive a partial sickness benefit. I think it is great that this family is trying to increase their family income through starting a business, but I don't understand why they receive a partial sickness benefit. If they are well enough to mow lawns (fairly physically demanding work) surely (if eligible) they should receive a partial unemployment rather than a partial sickness benefit?

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10623166

Anonymous said...

Time to kick the junkies and alkies without dependants off the SB and IB and offer them the UB or nothing. Those on DPB compulsary contraception.
In all cases no more money for additional children born into already benefit dependant households.
Murray M

Anonymous said...

Time to kick the junkies and alkies without dependants off the SB and IB and offer them the UB or nothing. Those on DPB compulsary contraception.

To late for that!

THere is a much simpler solution: zero all benefits (including super)

Can anyone here argue WHY my money should be taken from my family and use to pay for drugs booze and TV subscriptions for unproductive losers?

Anonymous said...

Because no government is electable with systematic opposition from retired people.

(And this comment is anonymous because it is partly sarcastic and comes from someone with retired people in the family.)

Anonymous said...

Because no government is electable with systematic opposition from retired people.


only so long as the codgers have the vote.

the lesson of the Roger/Ruth reforms - totally reversed by Clark - is that economic reform is only sustainable when it is underpinned by political reform.

Rimu said...

This blog post got nicely debunked over at Frogblog

Anonymous said...

Well - okay, so why do we still have a welfare system then? Who will change it? Is it in anyones interest? really? It'll never change. Its going to be here for ever. It is not in anyones interest to bunk welfare. Especially not business. Landlords, the food industry, all money that goes into welfare goes back to business. All of it.