Sunday, January 26, 2020

Why are 56,000 Maori claiming Jobseeker benefit when only 27,000 are unemployed?

Jacinda Ardern went to Ratana and told Maori she was working for their collective people and that the unemployment rate was dropping. Officially the latter is true.

But that's only half of the story.

Here is the Maori unemployment rate from Statistics NZ data:

However, in September 2017 Maori overtook NZ European on the Jobseeker numbers for the first time ever. Since they have been pulling away. Here are the Jobseeker numbers from MSD data:

It seems odd that the two trajectories are going in different directions.

According to the Stats NZ data at September 2019 there were 60,200 unemployed NZ Europeans and 27,500 unemployed Maori.

You would expect the number of  unemployed to be slightly higher than on Jobseeker - some people will be neither inclined to seek nor qualify for a Jobseeker benefit. This is the case for NZ Europeans.

But there is a large mismatch between 27,500 Maori unemployed and over 56,581 on Jobseeker benefit.

From Sep 17 to Sep 19 the Maori Labour Force Participation Rate (LFPR) fell from 70.4 to 67.8 percent - a drop of 2.6 points. NZ European LFPR fell from 71.7 to 70.7 - a drop of 0.3 points.

Looking at the 'not in the labour force' numbers, for NZ European they have climbed 9,000 - a 1.1% increase. The Maori increase is 17,800 - a massive 12 percent increase.

If an individual drops out of the labour force that means they are not looking or available for work. In which case they shouldn't be receiving a Jobseeker benefit. If they have dropped out due to health/disability reasons that preclude them from work permanently, they would go on the Supported Living Payment but there is no particular increase for Maori there.

On the other hand the Maori working age population has grown much more than the NZ European population probably due to the ageing NZ European pop versus the young Maori pop. (The stats are muddied by Stats NZ classifying the working age population as 15-64. Ridiculous when you can't even leave school till 16.)

But the same demographic characteristics apply to the Pacific population and their unemployment/ Jobseeker ratio is more like the NZ European with 13,400 unemployed and 11,552 on the Jobseeker benefit.

If Jacinda thinks this is a success for Maori she is probably in a very small minority.

And as she has pledged to run an election campaign free from fake news perhaps she could start by answering the question in the title of my post.

(There is one other remote possible explanation. Around 62,000 Jobseekers have a health condition or disability and are not 'work ready'. Could they all be Maori? I am going to rule it out on the basis that when the sickness benefit was rolled into the Jobseeker benefit in 2013 Maori only made up 28 percent or around 16,600 individuals. But I will OIA it.)

Update: A commentor points to part-time employment as a reason for many more Maori than just the 'unemployed' being on a Jobseeker benefit. But the 'underutilisation' (which includes underemployment) percentage for Maori is not much higher than for Pacific - 17.6 versus 14.1 percent. So I am skeptical about that answer.

Update 2: Further reflection - it is possible that the ranks of part-time Maori workers have been swollen by ex DPB ageing single parents. But that brings us back to arguing over whether these ladies are genuinely single. If they were partnered (as they very well may have been when claiming the DPB) they shouldn't qualify for the Jobseeker benefit (unless both partners are claiming the single rate - exactly half of the married/de facto rate). So many complications.

Bottom-line is the Maori unemployment/Jobseeker ratio is utterly different from the NZ European and Pacific. And I'd like to understand why.


Anonymous said...

A graph referenced on your site last year had the note that 10% of those on jobseeker benefit were fulltime (30+ hours per week). If one can still get the benefit add-ons why work for longer hours for effectively less money? Plus there are more jobs that don't have reliable hours so is safety net against slow weeks.

Lindsay Mitchell said...

Thanks. I have updated the post to take account of your comment.

Unknown said...

The beginnings of the trend you identify started earlier than you have displayed in your graphics. Please show the longer term trend before you make your conclusions, otherwise you could be accused of cherry picking.

Lindsay Mitchell said...

Which trend is that? And which "conclusion"?