A controversial suggestion to explain the dip in Unemployment and what it really says about NZ right now

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I would like to put forward an argument about why the Unemployment rate has surprised everyone by dipping slightly rather than exploding upwards.

Before I put it forward, let me acknowledge…

Yes, more people want more hours.

Yes, the wage subsidy scheme is masking the true economic damage

Yes women and the poor have been hit hardest by the current unemployment rates.

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Yes I think it’s going to get much, much worse.

But.

I think, and this is nothing more than a gut feeling based on the amazing solidarity built around Jacinda and talking to lots of small business owners, that while the big employers saw this as an opportunity to cash in on the wage subsidy while sacking workers, many, many, many, many other small business bosses, who employ the majority of Kiwis in this country, feel that same obligation that the solidarity of this unique event had generated and have done all they can to actually hold onto workers.

I think the large majority of Kiwis have been genuinely impacted by this pandemic and it has really touched them and that is one reason why they are currently looking to give Labour a majority in an MMP environment whereby that’s almost impossible to achieve.

I’m not saying this sense of solidarity will continue forever, but every Kiwi in every way, and that includes the bosses of small business, are all trying to do their best and have taken Jacinda’s kindness to heart.

Everyone has been touched by this event and it is reshaping the economy, politics AND the culture. Everyone felt vulnerable in lockdown, everyone feels like they’ve sacrificed and that solidarity is extending to every facet of our lives.

 

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10 COMMENTS

  1. ” Everyone has been touched by this event and it is reshaping the economy, politics AND the culture ”
    And who would have thought a fatal flu like pandemic would be the catalyst for change.
    Can Labour winning a massive mandate of the back of this implement the change we have been crying out for or will neoliberalisim and the Labour right use this moment in time to its advantage and re market itself with a gentle smile without changing its guiding principles to ensure continuing control.
    Is this Jacindas nuclear free moment ? or is she like the rest of us non rich types still held hostage to the ravages of the system.

  2. If you can find the time to listen all through it, Ruth Dyson’s valedictory speech inspires the same optimism for our future, for more or less the same reasons as in Martyn’s post above. The only place I can find it is on TS, so that link is here: Go Well, Ruth Dyson

  3. I would say your quite right, – and hats off to those ethical small business owners as well, BTW. Good on them. But I wonder if Kiwi’s are not filling the void left by migrant workers as well, in a small way. Perhaps that’s one small reason. Who knows?

  4. And as sure as the sun rises every morning one of the national party’s marketers, Barry Soapbox Soper immediately jumps up and claims that Jacinda/Labour-led government has manipulated the figures. https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12354179

    What he seems to be saying is that Jacinda’s government has strategically brought in the wage subsidy extension to make it look like it is keeping people in work when what it really is, is ‘false economy’. This from an individual who was never at risk of losing his job during lock-down and who was and is never at risk of losing his income. His callousness knows no bounds but by displaying it he displays a real lack of insight into the real world and the lives of real people.

    A short note to Soper. Barry, I am able to keep my part-time job to help fund my tertiary studies because the employer I work for is able to keep their business open due to the wage subsidy extension and even more importantly, after it ends. This is good news for me but even better news for the permanent employees. You say that Jacinda is disingenuous. Look at yourself before you throw stones. Your view is disingenuous in the extreme but you level of reporting is at such a base level I don’t think you get it.

    • Soper is correct. We should take “official” unemployment numbers with a pinch of salt. Next year will be challenging for many people. I suspect the Government’s lustre will quickly become tarnished as more and more workers are laid off.

      • They do it every time.
        EVERY ‘worker’ is someone’s customer.
        Everyone on the payroll is someone else’s cashflow.
        Every lay off helps to gut the economy.
        Private profit. Public loss and rip off the tax payers for people who only think they know how to run a business.

        It’s about time the employers’ union wised up, wouldn’t you say?

  5. You might be right Martyn, in the provincial Northland junior city I live in for now, alright it is Whangārei…large employer Carter Holt Harvey took the Govt bag to the tune of several million dollars–numbers are on MBIE site–did not hand it over to workers, who were forced to used their leave, and is now sacking 70% of the workforce in a move that looks planned before Covid. Various legal actions by workers and their unions are proceeding.

    Meanwhile a smaller company, boatbuilder and fitter, did pretty much the same trick, but the boss then thought about it after landing a big contract, and gave all the leave back. A number of SME workers are on less hours, but they have largely been kept on is what I am hearing.

    I know one union organiser who says some jobless Airline crew are moving into caring, as some of the same skills are needed as when pampering entitled rich bastards in business class!

  6. The definition of ‘unemployed’ by Statistics NZ is the cause of a lower unemployment rate if anything. Quite simply, the statistics can be manipulated to suit and therefore are about as valid as opinion dressed up as political propaganda. For figures ending June 2020 from Statistics NZ (Statistics NZ, 2020), the ‘number of people not in the labour force’ rose 37,000 while the ‘number of employed people’ fell 11,000. In either of these measures, how could the unemployment rate fall? Here are some of the definitions used by Stats NZ to define the unemployed:

    ‘People who were not actively seeking work were not counted as unemployed’. Firstly what sort of sociopathic government ministry would not take responsibility for their unemployed citizens, not even acknowledging them let alone assisting them into employment in this gamed system? So these people are neither employed nor unemployed, are they are in a sort of social netherworld just waiting for death? Secondly these sociopathic ministries seem to be monitoring these unemployed citizens activities (literally surveilling their everyday lives) to have known whether they have applied for jobs, but even after all of this energy spent rifling through their undie drawers, they still can’t bring themselves to include these citizens in key statistics? Wtf?

    ‘To be counted as unemployed, a person must have been actively seeking work in the last four weeks or be due to start a new job in the next four weeks. Actively seeking work…means the person is going beyond browsing, for example, by applying for jobs (by submitting their CV) or contacting employers’.
    Again, how do these ministries know what citizens have been doing in their private lives, and why are some unemployed people not even given the dignity of recognition?

    ‘Available potential jobseekers and unavailable jobseekers make up the potential labour force. These people are not in the labour force’.
    So you mean these people are unemployed?

    ‘Available potential jobseekers – people who would like a job but are not currently actively seeking one; for example, a university student who has just graduated and wants a job but is not actively applying for one yet’.
    So this cohort are unemployed people with real ‘potential’?

    ‘Unavailable jobseekers – people who are currently looking for a job but are not available to start quite yet; for example, a mother who has recently been looking after a child and in the next month will be able to start working again’.
    So this cohort are unemployed people with other things on their plate?

    And finally a caveat from Stats NZ:
    ‘The number of officially unemployed people varies from the number of Jobseeker Support recipients published by the Ministry of Social Development due to definitional differences’.
    Oh really, this time you definitely are two distinct government departments not colluding to fuck citizens over, snoop into their lives or obfuscate the truth?

    Statistics NZ. (2020). Covid-19 lockdown has widespread effects on labour market. Retrieved from
    https://www.stats.govt.nz/news/covid-19-lockdown-has-widespread-effects-on-labour-market

  7. KiwiBank economist says NZ women hit hardest:

    ‘It’s hell’: Reality of unemployment despite drop in numbers

    https://www.rnz.co.nz/news/national/422837/it-s-hell-reality-of-unemployment-despite-drop-in-numbers

    “….Kiwibank chief economist Jarrod Kerr said the labour market would likely deteriorate further.

    “We’ve seen a drop in employment of 11,000 people which was lower than most of us thought the employment rate has come off but then if you scratch beneath the surface, the hours worked was down 10 percent and that’s a big decline as you’d expect during this period.

    “But the underutilisation rate – so the level of underemployment, people who have a few hours work but want more – actually increased from 10 percent to 12 percent. And that’s quite a staggering increase.”

    Even more staggering, Kiwibank said, of the 11,000 people who lost their jobs in the June quarter 90 percent were women.”..

  8. Small to medium size employers do generally try to keep their staff members as long as they can, even in difficult times, perhaps reduce hours, but not sack them.

    That has happened, also the wage subsidy has helped many employers and their employees.

    But the latter and other help for business comes at a huge cost, that is printed or borrowed money, and future generations will have to balance the books.

    As many previous governments, once the time comes to pay the costs, this government will either be out of office, or it will blame others for the stuff up.

    We are basically using our credit card to pay the rent at present, that is the state of affairs in New Zealand now. All else is propaganda and delusional thinking.

    Perhaps the solution will be as before, increase immigration, and pump people and money into the economy, to delay the final collapse, just to keep the machinery going.

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