Thursday, November 04, 2021

Unemployment rate: treat with caution

The New Zealand Herald ran this chart from a private research company called Sense Partners. The chart depicts Maori numbers in the North Island and highlights that the officially unemployed and Jobseeker claimants are trending in opposite directions:

To be officially unemployed a person needs to be available for and seeking work. Just over  30,000 Maori in the North Island are officially unemployed. 

But over 70,000 are on a Jobseeker benefit.


1/ You can be on the Jobseeker benefit with no immediate work obligation, so not officially unemployed.

For instance the old Sickness Benefit was rolled into the new Jobseeker benefit. So now 38 percent of all Jobseeker claimants are classified as having a Health Condition or Disability which excuses them from immediate work requirements. Not officially unemployed.

2/ You can be on the Jobseeker benefit with part-time or seasonal work so not officially unemployed. With work becoming more tenuous and interrupted more people will be claiming a Jobseeker benefit while having some attachment to the workforce. 

In addition, under a Labour government implementing reforms recommended by the now Governor General Cindy Kiro as head of the Welfare Expert Advisory Group, the softening of WINZ approach towards requiring people to look for work (sanctions and employment focus have both reduced) releases more from the official  definition of unemployed. 

Back to the Maori stats highlighted in the chart, in Northland, a region with a high Maori population the unemployment rate is 3.9% yet the Jobseeker rate is 10.5 percent.

In the general population the figures are:

Unemployment rate     3.4% 

Jobseeker rate     6.1%

 All benefit-dependent rate   11.3% 

Important numbers to remember whenever you hear Grant Robertson, the Finance Minister, waxing lyrical about the wonderfully low unemployment rate.


Peter Cresswell said...

Well spotted.

Zoroforever said...

It's quite complex Lindsay but the 11.3% figure shows the reality.
Robertson is the master of spin. He's constantly banging on about how our debt levels are in line with other western economies but fails to mention how small and vulnerable the NZ economy is.