The REAL level of unemployment…

By   /   December 13, 2013  /   15 Comments

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If, after 30 years, the Rogernomics experiment has not delivered the results we were promised – just how long will we have to wait?

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Job-Hunting-10-Tips-for-When-Your-Unemployment-Checks-Stop

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Current unemployment/employment statistics provided by Statistics NZ through the Household Labour Force Survey (HLFS) have been called into question with the release of poll data from two other sources.

Current HLFS stats have unemployment falling to its current level of 6.2% – from a height of 7.3% last year,

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Unemployment Rate - 2008 - 2013

Source

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The HLFS stats appear to put a positive, downward ‘spin’ on New Zealand’s unemployment rates. All good news for the current National-led government that is desperate for good news as it faces an election next year – and probable defeat.

However, on 5 December, Roy Morgan released the shock results of an nationwide poll, showing unemployment as well as  under-employment much higher than the Household Labour Force Survey has been reporting,

New Zealand unemployment was 8.5% (down 0.3% since the June Quarter 2013) of the 2,629,000 in the NZ workforce – an estimated 223,000 (down 5,000) were unemployed and looking for work.

A further 8.6% (down 1%) of the workforce* were under-employed – that is working part-time but looking for more work – 227,000 (down 23,000) New Zealanders.

In total 17.1% of the workforce (450,000, down 28,000) New Zealanders were either unemployed or under-employed.

The latest Roy Morgan unemployment estimate of 8.5% is now 2.3% above the 6.2% currently quoted by Statistics New Zealand for the September Quarter 2013.

Source

Curiously, this poll result was not reported (as far as this blogger can determine) by any mainstream media.

A subsequent  report – again released by Statistics NZ – revealed  the Census 2013 results on unemployment. The results were once again higher than the HLFS,

  • There were 2,001,006 employed adults (people aged 15 years and over) in 2013. Those who were employed made up 62.3 percent of adults, down from 65.0 percent in 2006.
  • Unemployment increased since 2006, but was slightly lower than in 2001. The unemployment rates for the last three censuses were:
    • 2013 – 7.1 percent
    • 2006 – 5.1 percent
    • 2001 – 7.5 percent.
  • Unemployment was higher for the 15–24 year age group than for the labour force overall. In 2013, the unemployment rate for this age group was 18.4 percent.

Source

The Census survey not only revealed that unemployment is much higher than the HLFS (7.1%, instead of 6.2%), but that youth unemployment was 18.4% – an increase from  the 2006 Census result of 13.3%.

The data table below tells the full story,

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Unemployment Rate - 2013 Census

IBID

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Not only are the 2013 Census result and HLFS at odds with each other , but made a damning indictment on the National-led government prior to 2000. Unemployment in the 2001 Census is shown at 7.5% – a legacy of the Bolger/Shipley administrations of the 1990s.

As a side-note, the Census confirmed the decline of  manufacturing  with 29,472 (13.5%) fewer people currently  employed in this industry than in 2006.

Interestingly, whilst HLFS unemployment for March 2006 is reported by Statistics NZ to be 4%,

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Unemployment Rate - 2006

Source

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– the 2006 Census gave a higher result of 5.1% (see above table). The Census results appear to be consistently higher than the HLFS – and most likely more accurate.

The implications of this are not hard to miss; unemployment (and under-employment) are much worse than we have realised.

Not only is this a drag on our economy (like a ship at sea dragging it’s anchor along the ocean-bottom, and wondering why it can’t pick up speed) – but the social consequences must be enormous.

More than ever, this should serve as a wake-up call to any government with a modicum of common sense that allowing job-creation to be left to the “free market” is fraught with uncertainty at best – and a massive failure at worst.

We have listened to 30 years of promises from successive politicians that the neo-liberal model will provide more jobs; higher pay; and growth.

None of those promises have eventuated and on top of which, as former Assistant Auditor-General Bruce Anderson stated in his report, Public Sector Financial Sustainability”,

Kiwis also feel good about themselves. New Zealand rates highly for tolerance, interpersonal trust and life satisfaction, the report says. That is just as well because the country probably needs that “social capital” to offset the negatives faced by the economy.

[…]

Those include increasing income inequality, with New Zealand one of the least equal in terms of market income in the OECD from one of the most equal 30 years ago. The country also shows disturbing social trends, including high youth suicide, teen fertility and unemployment.”

Source

In the same report, Anderson also referred to private borrowing ballooning to 140% of GDP (thanks to massive borrowing from overseas to finance our penchant for property speculation) whilst at the same time our economic performance was mediocre.

If we are to re-build a fairer society where everyone who wants can find work; good wages for a good day’s work; and an opportunity to own our home, then the economic model we have been pursuing must change.

For clues to the change we so desperately need,  the Christchurch Re-build has offered us one.

Canterbury (along with Auckland) has bucked the trend in terms of  reducing unemployment,

The Household Labour Force Survey, released today, shows employment in the Canterbury region rose by 2100 people, an increase of 0.6 percent.

Unemployment figures for the region decreased by 4000 people or 21.3 percent, most of which came from men who showed a decrease of 3800 unemployed.

Overall the Canterbury unemployment rate was 4.3 percent in the March quarter.  

Meanwhile, the national unemployment rate was 6.2% (in reality 7.1%, according to the Census).

The lesson here is simple for all but the most ideologically blind; where there are jobs, people will work.

Where jobs do not exist, unemployment will result.

The so-called “free” market has failed to deliver those jobs – most of which have been exported overseas to low-waged societies.

As David Cull, mayor of Dunedin angrily said in June 2011, when it was announced that Kiwirail would award a contract to purchase rail-wagons from South Korea and China, inside of building them at the Hillside workshops,

This is frankly a form of economic vandalism. What are we mounting here? An economic development strategy for China?”

Source

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catching-up-with-bangladesh

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That decision alone  cost the city of Dunedin over a hundred jobs (at the very least) plus millions in lost wages and down-stream business. The same has been repeated all over New Zealand; lost jobs; lost wages; depressed regions – and a growth in the social welfare cost to taxpayers.

If, after 30 years, the Rogernomics experiment has not delivered the results we were promised – just how long will we have to wait?

Just how long does it take to learn a lesson if we keep repeating the same mistakes, year after year, decade after decade?

Because really, 153,210 people would like an answer.

Meanwhile, as a reminder to us all,

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Budget 2011 - Govt predicts 170,000 new jobs

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Are we there yet?

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Sources

TV1:  Budget 2011 – Govt predicts 170,000 new jobs (19 May 2011)

TV1 News:  KiwiRail under fire over job cuts (9 June 2011)

NZ Herald: Unemployment up to 7.3pc – a 13 year high (8 Nov 2012)

TV3:  Canterbury employment rate rises (9 May 2013)

NBR: NZ’s first world aspirations based on economy ‘harvesting water’ (6 June 2013)

Statistics NZ: Household Labour Force Survey: September 2013 quarter (6 Nov 2013)

Roy Morgan: New Zealand real unemployment down 0.3% to 8.5% and a further 8.6% (down 1%) of workforce are under-employed (5 Dec 2013)

References

2006 Census

2013 Census

Trading Economics:  New Zealand Unemployment Rate

Previous related blogposts

Can we do it? Bloody oath we can!

2013 – Ongoing jobless talley

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15 Comments

  1. Tiger Mountain says:

    It gets worse when the ‘employed’ are considered, the working poor need more hours and or better pay and conditions while the more middle class group (still not highly paid) depend on WFF in work tax credit for a top up, rather than joining a union and organising their own better pay.

    Others kid themselves they are in the glamour professions–film, media, tourism, food and beverage etc which are precarious, contract based and often pay barely minimum wage with GST obligations etc. Plus interns, todays slave labour.

    WINZ has done such a good job of demonising ‘clients’, with holding entitlements and generally providing a punitive obstructive bureaucracy that many will not go near one of their offices. So more people off the grid.

    It is a very shaky pile indeed.

  2. fambo says:

    “Just how long does it take to learn a lesson if we keep repeating the same mistakes”

    Til the 12th of never, and that’s a long, long time

  3. Kay Brereton says:

    You become disqualified from the household labour force survey if you are out of work, but have given up looking. Also moving home or becoming homeless during the survey period disqualifies you
    These are times when you stop counting even as a statistic

    • Indeed, Kay.

      This was highlighted on 16 July when it was reported that ten thousand fewer people were now on a benefit compared to last year. (see: http://www.stuff.co.nz/national/politics/8924075/Number-on-benefits-drops-reaction-mixed)

      In fact, Bennett proudly proclaimed,

      “That’s a reduction of more than 10,000 on welfare over the past 12 months and I am particularly pleased that 5600 of them are sole parents.” – Paula Bennett

      One wonders how many of them moved into employment – or were simply forced of WINZ’s books?

      Considering that WINZ has implemented a policy of a one year maximum for receiving a benefit and then having to re-apply, how many are not bothering, or for some reason no longer qualify based on a technicality?

      • Marc says:

        Yes, this relentless pressure that WINZ staff are now expected to put onto especially sole parents, even sick and some disabled, that are now increasingly being work tested and re-assessed, is for time being making the figures look “good” on the surface.

        But they are figures from a kind of parallel universe – so to say.

        There will be a fair few sole parents who cannot keep up with the pressures and possibly enter new relationships for economic reasons, simply to try and survive. Some of those relationships may potentially be harmful and abusive. Others may opt to become sex workers, taking other risks.

        Also are the pressures on many sick and disabled, especially those with mental health conditions, putting them under quite high risk. Some will crack under the pressure, and may self harm or in the most extreme case even commit suicide.

        In any case, many will suffer mentally and physically, and they will be “recycled” through marginal, casual and temporary employment, back into benefit dependence, with more and worse health issues than before.

        Scaring and pressuring people, sanctioning them, and declaring sick people “fit” for work, as some insane, extremist UK professor Mansel Aylward preaches his “work will set you free” philosophy based on his perverted “bio-psycho-social model”, that is bound to lead to disastrous consequences.

        This is all going hand in hand with the “investment approach”, applying actuarial considerations to each case, and people are no longer people, they are numbers, statistics, “economic units” and the likes, that have to perform and cooperate to make a government show off faked “achievements”.

        How sick can any government get to push for such agendas?

      • LilaR says:

        For many years now beneficiaries have been required to reapply annually (possibly they always have), more often for sickness beneficiaries (and unemployment?). Even superannuitants have to reapply annually. This is not new. What is new is the docking of benefits for failing to adhere to a punitive set of requirements.

  4. Orinoco says:

    with dept of stats reporting consistently lower unemployment stats than censuses, one cannot help but draw the conclusion that government has put pressure on that dept to downplay unemployment stats, so the government looks better.

    isn’t that rather corrupt? at least, it’s dishonest.

  5. Marc says:

    Thanks Frank, another informative and well researched post by you, which reveals what is really going on.

    The Household Labour Force Survey may be flawed, as they work on the basis of certain presumptions, like estimates of the whole NZ population. Until the census data came out recently, it was expected that the whole NZ population was larger than the Census revealed it presently is.

    http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/HouseholdLabourforceSurveyEstimatedWorkAgePopulation.aspx

    It is also based on a sample group, which may not always truly represent the whole national situation.

    http://www.stats.govt.nz/survey-participants/a-z-of-our-surveys/household-labour-force-survey.aspx

    As far as I can recall, the definition for unemployed is also depending on whether a person is actually looking for, making efforts to find and thus truly expressing the will to work.

    Persons that may have resigned to the fact that they will not find the job they seek, may not be counted as officially unemployed. I am not quite sure on the latter, but I think that is what I read and heard before.

    But going by much anecdotal information from persons affected, it is indeed not that easy to find work, and many are underemployed, basically getting by and also not claiming a base benefit, which again “dresses up” the WINZ and MSD stats to please the government.

    Paula Bennett’s departments are now doing all to keep people from claiming benefits, as the pre-benefit expectations are high, for persons to jump over many hurdles, before they can even make an application for the jobseeker or any other benefit.

    When sick and disabled are now re-assessed and many considered to be able to do some forms of work, many will be forced to find some part time work, and I know of sick people that were rejected by WINZ, and that took on work, despite of quite worrisome conditions. Once you work more than 15 hours a week you are no longer unemployed, you work part-time, and once you work over 30 hours, you are full time working, and have no entitlement to any benefit, except perhaps an accommodation supplement and a disability allowance.

    Such is the reality in New Zealand, and it is disgusting to hear Bennett pipe up in Parliament, telling the public all these lies about how many people are “helped” into work, and how “successful” the government is. If she had any decency and conscience, she should blush 24/7.

  6. Aaron says:

    Something those unemployment figures highlight is the crash in employment rates for the 15-24 group from 2006 to 2013 – but what surprised me is the massive increase in employment of over 65s during the period.

    I think Gen X and the babyboomers are escaping the worst of the effects of neoliberalism by cashing in on their employability but it means there’s not many jobs left for the next generation coming through who can’t compete because they haven’t yet got any work experience.

    And that’s before they even start thinking about trying to buy a house. I wonder how many of that generation are going to vote for party’s with neoliberal policies?

  7. […] And, as usual, our government keeps talking up the economy and employment statistics.  Here, Frank Macskasy shows why some of the statistics are misleading: The real level of unemployment: […]

  8. […] And, as usual, our government keeps talking up the economy and employment statistics.  Here, Frank Macskasy shows why some of the statistics are misleading: The real level of unemployment: […]

  9. […] Annette Sykes via Martyn Bradbury These Crown Statistics exposed for manipulations of the truth they are via Facebook https://thedailyblog.co.nz/2013/12/13/the-real-level-of-unemployment/ […]


 
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