Unemployment statistics for June quarter 2020

The Unemployment statistic for the June quarter 2020 caused some surprise, dropping from 4.2% in the first quarter to 4.0% averaged over April, May and June, but this has been explained with less people unable to look for or start new jobs due to the Covid-19 lockdown.

And the trend is ominously upwards.

The number of people employed fell by 11,000, and 90% of the reduction were women, who work more in the most affected sectors of tourism, hospitality and retail.

With a lot of the recovery targeting construction, dominated by male employees, the outlook for many women looks a bit grim.

Statistics NZ: COVID-19 lockdown has widespread effects on labour market

In the June 2020 quarter:

  • unemployment rate fell to 4.0 percent
  • underutilisation rate rose to 12.0 percent
  • hours worked fell a record 10.3 percent
  • the number of people not in the labour force rose 37,000
  • the number of employed people fell 11,000
  • the wage subsidy scheme was in place from 17 March 2020.

With the country in COVID-19 lockdown when the quarter began, fewer people who did not have a job were actively seeking work. People who were not actively seeking work were not counted as unemployed, resulting in a fall in the unemployment rate. However, many of these people were captured as underutilised.

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 going beyond browsing job vacancies. It means the person is going beyond browsing, for example, by applying for jobs (by submitting their CV) or contacting employers.

For obvious reasons there were less job vacancies and less people actively seeking jobs during the lockdown.

“Underutilisation – a broader measure of spare capacity in the labour market – and hours worked provide a more detailed picture of New Zealand’s labour market than the unemployment rate alone. This quarter, underutilisation rose from 10.4 percent to 12.0 percent – the largest quarterly rise since the series began, while hours worked were down by over 10 percent – another record,” labour market and household statistics senior manager Sean Broughton said.

This quarter, the number of unemployed people fell. At the same time, the number of underemployed people rose by 33,000 and available potential jobseekers rose by 18,900.

Record fall in hours

The total number of hours actually worked in the June 2020 quarter fell 9.3 million hours (10.3 percent) compared with last quarter and decreased 8.2 million hours (9.1 percent) compared with a year ago. These were the largest decreases recorded since the series began in 1986.

Paid hours, as collected in the quarterly employment survey (QES), measure the hours a business paid for, whether their employees were working or on paid leave. Paid hours fell by 3.4 percent over the June 2020 quarter, down to 60.6 million hours (seasonally adjusted). This was the largest quarterly fall in hours paid since the current series began in 1989. The annual decrease (down 1.9 percent) was the largest annual decrease since the December 2009 quarter.

The maximum Covid wage subsidy can only be obtained if workers keep working 80% of their of ‘full time’ hours, and many people has their hours cut by 20%.

Slight fall in employment and jobs

The employment rate fell to 66.9 percent in the June 2020 quarter, down from 67.5 percent last quarter. This reflected a fall in the number of people employed (down 11,000) and a rise in the working-age population (up 20,000).

The fall in the number of people in employment and unemployment this quarter resulted in the labour force participation rate falling to 69.7 percent, down from 70.5 percent (revised) last quarter.

The number of people not in the labour force rose (up 37,000) this quarter, while the number of people in the labour force fell (down 17,000). This was the largest fall in the number of people in the labour force recorded since the global financial crisis.

Filled jobs, as measured by the QES, fell 10,800 in the June 2020 quarter to 1,989,400.

COVID-19 alert system and key events timeline

So with the wage subsidy ending this month the employment crunch is likely to start next month. There are already signals that more jobs will be lost from September, but this could be spread over several months. For example H&J Smith have announced they will close their Dunedin store in January, and will be closing a number of other stores too.

Also from Statistics NZ:

RNZ: What’s lurking behind the four percent job figure?

‘Beware’ and ‘unbelievable’ were the first words Kiwibank’s chief economist Jarrod Kerr used to describe the four percent figure just minutes after the Household Labour Force Survey for the June quarter was released yesterday.

Today, Kerr explains to the Detail’s Sharon Brettkelly what’s behind the numbers.

“The unemployment rate itself is rubbish,” he says – stating a more realistic number is closer to five percent. Underlying numbers tell the real story – 11,000 people laid off, of which 10,000 are women.

The number of people participating in the workforce dropped to 69.7 from 70.5 percent. If you lose your job, not everyone goes onto an unemployment benefit. Kerr has heard of many older people in Auckland who lost their job and are using the opportunity to leave, and head out into the regions. “You have actually lost a worker, and that doesn’t show up in the unemployment rate.”

The under-utilisation rate – showing the numbers of people who want more work – rose from 10 percent to 12 percent, which is the biggest jump in decades. The employment rate is down, wage growth is soft.

“When you were in lockdown you weren’t considered to be unemployed,” he says. “One of the questions asked is, ‘are you actively seeking work?’

“I think it’s ridiculous the Stats department actually published that . We need an ounce of credibility in these figures and we know that the current unemployment rate is nowhere near four percent and it’s just a product of a poor survey in a very difficult time. It’s the publishing of a number that no one can believe.”

Some want to believe the number, or want to promote it for political purposes, but if you look at all the numbers, the reasons and the upward trend in unemployment it becomes believable.

Stuff: Politicians say unemployment crunch will come in September, as official rate marginally drops

Finance Minister Grant Robertson says a drop in the official unemployment rate is a “good result”, but the toughest times for workers will come in September.

There would be no extension to the wage subsidy, and workers who lose their job can receive the Covid-19 income relief payment for 12 weeks. Robertson said the payments, at $490 a week, were “effectively the equivalent of the wage subsidy scheme”.

“We’ve always said that it would be the September quarter where we would see the most impact, but [the unemployment rate] does show that the New Zealand economy has been robust, and that the wage subsidy scheme has done what we wanted it to do.”

To really see the effect of Covid on unemployment we will get a better idea from the next two quarters (we won’t know the December quarter numbers until next year) and the flow on effect could run for a year or two.

And what we don’t know is what is going to happen with Covid – whether we have another outbreak here, how long our borders remain virtually closed, and what effect the world economic situation will have. It is likely to be somewhere between tough and grim.

Unemployment down, Fonterra down, OCR flat

Despite negative business confidence there are some good economic signs, with unemployment down and the OCR being left low by the Reserve Bank with an indication it will stay low through next year and into 2020. This will keep interest rates low. However the news is not so good for Fonterra and their many shareholder farmers.

Employment rates at record high

Today’s record employment rate of 68.3 percent, matched by the lowest unemployment rate of 3.9 percent in over a decade means better lives for thousands of New Zealanders, Minister of Employment Willie Jackson says.

“There are now over 2.66 million New Zealanders in employment which means that 29,000 more people and families are engaged in earning since the last quarterly results were released”.

“The underutilisation result for this quarter has continued the recent downward trend and has fallen further to 11.3 percent. This is an indication that people who want to work, are able to work.

“The reduction in the unemployment rate for Māori to 8.5 percent (down from 9.9 percent) is a further example of our continued focus on improving outcomes for our people and while this is the lowest it has been in over a decade, the work doesn’t stop.

Today’s Household Labour Force Survey release shows a further reduction in the NEET rates for 15-24 year olds from 10.9 to 10.1 percent.  This is a down from the same time last year when our young people not earning or learning were at 11.3 percent.

Unemployment drop another sign of strong economic fundamentals

Today’s drop in the unemployment rate to its lowest level in over a decade is another real example of New Zealand’s strong economic fundamentals, Finance Minister Grant Robertson says.

The unemployment rate fell to 3.9% in the September 2018 quarter, the lowest since June 2008. At the same time, the employment rate rose to a record high of 68.3%.

So that is all good news.

Yesterday from the reserve Bank: Official Cash Rate unchanged at 1.75 percent

The Official Cash Rate (OCR) remains at 1.75 percent. We expect to keep the OCR at this level through 2019 and into 2020.

The pick-up in GDP growth in the June quarter was partly due to temporary factors, and business surveys continue to suggest growth will be soft in the near term. Employment is around its maximum sustainable level. However, core consumer price inflation remains below our 2 percent target mid-point, necessitating continued supportive monetary policy.

GDP growth is expected to pick up over 2019.

Downside risks to the growth outlook remain. Weak business sentiment could weigh on growth for longer. Trade tensions remain in some major economies, raising the risk that trade barriers increase and undermine global growth.

Upside risks to the inflation outlook also exist. Higher fuel prices are boosting near-term headline inflation.

So this is generally looking good, especially for those with mortgages and business loans. Not so good for those with interest earning investments.

While dairy farmers will like the low interest rates not all is well for them.

ODT: Fonterra told it must ‘do better’

Fonterra’s financial performance since its inception has been “unsatisfactory”, a report has found.

The report said the country’s largest dairy co-operative had failed to deliver meaningful returns over and above the cost of capital since inception.

Milk growth over the past 15 years had been an impediment but was now largely past. It had been critical that was addressed to ensure continued supply of milk and capital.

Mr Hurrell told around 300 farmer shareholders at the meeting the company had plans to turn around its financial performance and no longer aimed to produce as much milk as possible.

RNZ: Fonterra’s ‘sorry’ not enough for all shareholders

Fonterra managers met with 400 shareholders in Waikato today to apologise for their nine-figure loss. As Eric Frykberg reports, while many farmers backed the co-operative, others were fuming.

Global dairy prices have been trending down all year – see https://www.globaldairytrade.info/en/product-results/

Mixed confidence news – RNZ:  Consumer confidence drops to lowest level in three years

The ANZ-Roy Morgan consumer confidence index fell three points last month to below its historical average.

The future conditions index was down five points to the lowest level since 2015.

The chief economist at ANZ, Sharon Zollner, said the pessimism about the future has spread from being about the broader economy to individuals’ future financial position.

But consumers were still relatively confident about current conditions, with a net 11 percent feeling better off than they did a year ago.

Auckland Business Chamber – Encouraging signs for business confidence

Auckland’s SME (Small and Medium Enterprise) sector displayed a changing view of business confidence in Auckland Chamber’s latest quarterly survey.

“Confidence amongst Auckland business showed a 10% improvement on last quarter,” said Chamber CEO Michael Barnett.

The survey of more than 700 respondents recorded 48% of respondents expecting conditions to deteriorate over the next six months compared to 54% from the previous survey.

“This in part reflects the move from winter into summer and the start of the holiday season, but it is a positive,” said Barnett.

“Despite this, the survey reveals elements of uncertainty that SME’s are having within a changing business environment.”

So mixed signals there too.

Unemployment rises slightly

After a decade low last quarter unemployment has risen slightly in the quarter to June 2018, to 4.5% (from 4.4%).

It rose to 4.3% (up 0.3%) for men, and fell to 4.7% (down 0.2%) for women.

This is not enough too cause any real concern, but if it turns into a trend it could become a problem. Dropping confidence may well translate into lower employment rates.

Labour market at a glance

  • Unemployment rate rose to 4.5 percent.
  • Underutilisation rate rose to 12.0 percent.
  • Employment rate was unchanged at 67.7 percent.
  • Filled jobs rose 0.8 percent.
  • Average ordinary time hourly earnings increased to $31.00.
  • Annual wage inflation increased 1.9 percent.

There is pressure on wage inflation with large claims pending for nurses, teachers and other public servants, as well as the minimum wage being pushed up.

Unemployment and underutilisation

In the June 2018 quarter, the seasonally adjusted unemployment and underutilisation rates both rose slightly.

  • The unemployment rate rose to 4.5 percent (up 0.1 percentage points).
  • The underutilisation rate rose to 12.0 percent (up 0.1 percentage points).
  • The unemployment rate for men rose to 4.3 percent (up 0.3 percentage points), while for women it fell to 4.7 percent (down 0.2 percentage points).
  • The underutilisation rate for men rose to 10.0 percent (up 0.6 percentage points), while for women, it fell to 14.3 percent (down 0.3 percentage points).

Regional unemployment rates:



Addressing unemployment stressed by factions

Shane Jones’ push for ‘work-for-the-dole’ schemes to get people off couches and into work has highlighted a number factions that put stress on any policy making and implementing.

The factions include:

  • NZ First Party
  • Labour Party
  • Maori MPs
  • Unions
  • Green Party

Jacinda Ardern has to somehow try to manage all of their interests and mould it into an effective policy to address generational unemployment, especially Maori unemployment.

Richard Harman at Politik: Willie Jackson: Working for dole won’t work

Employment Minister Willie Jackson says he shares Shane Jones’ passion to get Maori unemployment down and he has proposed a package of measures in a paper to Prime Minister Jacinda Ardern to address the issue.

He met Jones yesterday and agreed to incorporate some of Jones’ ideas in his paper.

But he says he stops short at Jones’ “work for the dole” proposals.

And he says that idea would never be accepted by Labour or “the boss” – Prime Minister, Jacinda Ardern.

An idea that also wouldn’t be acceptable to unions, which Labour rely on for funding and support.

Jones’ language was probably provoked by a desire by NZ First to brand themselves as distinct to Labour.

But the imperative for Prime Minister Jacinda Ardern is to maintain a seamless unity between Labour and NZ First.

And the Maori caucus and the unions.

So at her post-Cabinet press conference yesterday she said that what Jones was calling “work for the dole”, Labour was calling “ready for work.”

We are essentially talking about the same thing,” she said.

Asked about Jones’ proposal to end dole payments if unemployed didn’t take up jobs she said there already was a sanctions regime in the welfare system.

“That’s provided us with the tools to ensure that people do take up the job opportunities that are available to them.”

The Green Party is strongly opposed to sanctions, another complicating factor.

Jackson though wants to see an employment strategy which strengthens communities and provides real jobs.

“You don’t fix unemployment by following Jonesy’s idea and chucking a few Maori out there cutting scrub for a few months,” he told POLITIK.

“You have to create a real job, jobs with dignity, by forming relationships with local Maori, with trade unions, with businesses.

But these are only minor differences between the two Maori MPs.

“I can work hand and hand with Jonesy,” said Jackson.

“The thing is we have seen inter generational unemployment; both of us.

“I’ve seen it in the urban sense, he’s seen it in the north.

“We are both of the same mind and the same sentiment. It’s just Jonesy has got his own way of expressing things.

“But his sentiment is right; his passion is right, but we have to be careful that we are not penalising our own.

“We came into this Government to offer hope to our people.”

‘Our people’ being Maori people, who have three times the unemployment rate of non-Maori. Jackson and Jones are capable of putting their interests ahead of their parties, but need the MPs of three parties to back their schemes to get people into work.

It will be a challenge, especially with the politics involved, but some sort of solutions need to be tried.


English v Ardern on sanctions on benefits

In Question Time today Bill English asked Jacinda Ardern about the use of sanctions in relation to getting unemployed people into work.

Winston Peters chimed in with a question/comment about saddling up a gift horse.

2. Rt Hon BILL ENGLISH (Leader of the Opposition) to the Prime Minister: Does she stand by all her statements?

Rt Hon JACINDA ARDERN (Prime Minister): In the context in which they were given, yes.

Rt Hon Bill English: Does she stand by her statement in regards to her Ready for Work scheme, or Work for the Dole scheme, that: “Our view was that you couldn’t compel people to take up a job.”

Rt Hon JACINDA ARDERN: When I was discussing the way that we would role this programme, we were acknowledging that there’s a range of ways in which we could encourage the uptake of the opportunity for employment. I have also acknowledged that sanctions have long been a part of our benefit system, and that won’t change. Ultimately, though, this is a Government focused on getting young people into work.

Rt Hon Bill English: Does she agree with the statement of her Minister for Regional Economic Development in regards to the Ready for Work scheme that, “They’ll be made to go to work. … there will be no more sitting on the couch.”?

Rt Hon JACINDA ARDERN: As I’ve said, sanctions have long been a part of our welfare system, and that won’t change.

Rt Hon Bill English: Does she therefore agree with her parliamentary under-secretary Jan Logie who said: “Benefit sanctions punish families who are already struggling to get by …. These are not the actions of a decent and compassionate government—benefit sanctions are punitive and cruel, and it’s going to take a change of government to get rid of them. … The Green Party in government … will immediately end … sanctions.”

Mr SPEAKER: Order! The Prime Minister has no responsibility for Green Party policy, or statements made by someone who was not an under-secretary at the time.

Rt Hon Bill English: Does she agree with the statements made by members of the Green Party in support of the Government that they oppose sanctions on benefits and intend to roll back those that exist?

Rt Hon JACINDA ARDERN: I absolutely stand by the Labour Party’s confidence and supply agreement with the Green Party, which says that we will look at the excessive use of sanctions within the welfare system. I have to say, the excessive use of sanctions ballooned under that last Government, because rather than focusing on providing employment opportunities like this Government, that’s what they resorted to.

Rt Hon Bill English: Can the Prime Minister now outline Government policy on sanctions as they may apply to young people who have been on the unemployment benefit?

Rt Hon JACINDA ARDERN: I have already given a general statement that sanctions have long been a part of our welfare system, but details around the way our particular policy around getting young people into work will go to Cabinet and decisions will be made collectively. But what I am happy to say is that, unlike the last Government, we are not willing to allow more than 70,000 young people not in employment, education, or training to have their lives wasted.

Rt Hon Bill English: If a young person who may be eligible for a scheme of this nature refuses to participate, or attends for a day or two and then refuses to attend, will the Government apply sanctions to them?

Rt Hon JACINDA ARDERN: I’ve given the general principles that we’ll be working to, but final decisions of the programme will go to Cabinet. But, again, this Government is entirely united behind the idea that young people deserve opportunities, and under this Government they’ll get them.

Rt Hon Winston Peters: Can I ask the Prime Minister whether it’s her Government’s attitude that the wealth of a country is in its working people, and whether it would be refreshing if some people, instead of looking a gift-horse in the mouth, decided to put a saddle on its back and be grateful?

Rt Hon JACINDA ARDERN: This is a Government that is focused on providing employment opportunities, and that’s exactly what our Minister for Regional Economic Development has been speaking to. Unlike the last Government, who labelled young people “pretty damn hopeless”, we’ll get them into jobs.

Poverty group: work not a solution, wants ‘unconditional welfare’

In response to the proposal by Shane Jones to get ‘the ne-er do well nephs’ off the couch and into work, Auckland Action Against Poverty says that it will fail to address unemployment.

They suggest that “we need to start thinking towards unconditional welfare and less about work as the solution to unemployment”.

Work-for-the-Dole Will Fail to Address Unemployment

Work-for-the-dole schemes will not lead to training and upskilling of youth, they will instead instill in our young people the idea that low wages and exploitation is all they are worth.

“Work-for-the-dole fails to address the root causes of unemployment and instead allow businesses to profit from poverty,” says Vanessa Cole, Co-ordinator of Auckland Action Against Poverty.

“Work-for-the-dole schemes allow employers to exploit beneficiaries and drive down the conditions of employment more generally.

“These schemes benefit employers, not workers. They allow businesses to have free labour and be subsidised by the government which undermines full-time employment and decent wages.

This is way off on a tangent. Jones was suggesting Government work like planting trees.

“The work-focussed policies of both Labour and National over the past 40 years have led to increased levels of poverty, and have resulted in businesses massively increasing private wealth.

“Work-for-the-dole allows for businesses to continue to make massive amounts of profit while driving down the conditions of employment.

“The nature of work is precarious and insecure. Beneficiaries are being placed in a poverty trap between low benefit payment and low wages frequently moving between the two.

“Work & Income already use work-focussed policy to coerce people into low-waged work which is often temporary and does not increase the wellbeing of the beneficiary.

Low waged work can also be a stepping stone to higher paid work. It’s quite common for young people to start at the bottom and for many of them to work their way up. At least it was.

“Work-for-the-dole schemes internationally have failed to address unemployment and in Australia have actually led to increased joblessness and benefit dependency.

“This is because the job market people are being placed into is inherently insecure and does not offer decent work.

“Both unemployed and employed workers need to have a liveable income. This will actually challenge employers to increase pay and conditions because it removed the coercive incentive to work.

“With the future of work moving more towards precarity, we need to start thinking towards unconditional welfare and less about work as the solution to unemployment.”

So Vanessa Cole is suggesting that unemployed should have “a liveable income” as well as “unconditional welfare”.

She says the work-for-the-dole schemes “internationally have failed to address unemployment” – I’d be interested to hear if unconditional welfare has worked anywhere in the world – but suggests that we should think less about “work as the solution to unemployment”.

Her solution seems to be lots of money with work optional.

Ardern and Jones differ on work-for-dole

On Q&A in the weekend Shane Jones promoted a work-for-dole scheme – see Slouches off couches in ‘Work for the Dole’.

Prime Minister Jacinda is not so keen and says any work initiatives for young people will have to be approved by Cabinet (a number of new Ministers have been promoting policy that hasn’t been ap;proved by Cabinet).

NZH:  Prime Minister Jacinda Ardern pours cold water on work for the dole

Prime Minister Jacinda Ardern says the Government’s work scheme to help young people into jobs will not be a work-for-the-dole scheme because they will be paid at least the minimum wage.

And she is not endorsing Regional Development Minister Shane Jones’ wish to compel young beneficiaries into work and cutting their benefit if they refuse, saying Cabinet will work through those details.

Yesterday Jones said he would take four projects to Cabinet for his Working For Your Country scheme before Christmas, which will give beneficiaries a chance to stop “sitting on the couch” and work for minimum wage in industries such as tree planting, riparian planting or developing railway tourism.

“In order to plant one billion trees, in order to deliver on riparian planting, in order to prepare a workforce for recapitalising the railways, the ne’er-do-well nephs will be required to take those jobs,” Jones told the Herald.

“If they are unwilling, then I will spend every thinking and waking moment ensuring they do not fall back on the dole and be permitted to do jack, while the rest of us are out there working.”

But Ardern is not on board with this approach.

…but Ardern told Newstalk ZB this morning that the terminology was wrong because they would be paid a legal wage.

She likened it to Labour’s Ready For Work programme, which targeted 10,000 NEETs (Not in Education, Employment or Training) for six months’ work in Government-supported environmental or community projects.

She did not endorse compelling NEETs to work and cutting their welfare if they refused, saying Labour had not supported compulsion in the past.

Cabinet will work through “the detail of how we encourage take-up”.

Work-for-the-dole had a number of problems, “not least that you’re undercutting people who are in paid employment”.

“If it’s a genuine job, you will be paid a genuine working wage.”

Stuff: Jacinda Ardern backs off work-for-dole scheme, but doesn’t rule out benefit sanctions

Prime Minister Jacinda Ardern spent her Monday morning managing expectations around Regional Development Minister Shane Jones’ plans to get young unemployed people off the benefit.

While signalling that Jones was speaking about his own ideas rather than Government policy, Ardern wouldn’t rule out benefit sanctions for those who refuse work.

That could be contentious within the Labour caucus, and also with the Greens who promote sanctionless (no questions asked, not pressure) benefits.

1 News: ‘You’re asking me to jump the gun’ – Jacinda Ardern cagey on forcing those on benefits into work

Prime Minister Jacinda Ardern has backed away from revealing her view on whether beneficiaries should be forced to work for the dole, saying it needed to be decided by a team – not just her.

“I’m not going to pre-empt the decision that has to be made by a collective group of people with all the information in front of us,” she said.

“You’re asking me to jump the gun on a policy announcement.”

Ms Ardern did say that some of the current sanctions on beneficiaries requiring them to seek work are harmful to families.

“Some of them are problematic – some of them actually end up depriving kids of the support they need.”

She said the Ready For Work scheme is not about compelling people to work, but more about “the dignity of work”.

“In the past we’ve had work for the dole schemes where a person will only receive the amount they would on the dole to do a job that is actually a job that would usually attract at least minimum wage,” Ms Ardern said.

“What we are talking about is genuine work, which should lead on to other opportunities, where you would be paid a legal wage.”

Ardern is making a habit of vague statements.

She has a challenge working out a compromise between Jones and his aims, and her own Cabinet. While greens aren’t in Cabinet they may want a say as well.

“NZ is thrashing Australia in competitiveness rankings”

I’m not sure if anyone believed Winston Peters’ preaching doom and gloom and his claims that the New Zealand was headed in a dire condition. Just after the election from Peters:  Official Cash Rate Shows Complacency:

“Beneath the veneer of stability large risks are lurking in the global economy,” says New Zealand First Leader Rt Hon Winston Peters.

“The prolonged era of ultra-cheap money has created expectations that this unprecedented period will continue forever.

“Fed by cheap money, share and property markets are at record levels and have a long way to fall.  In particular, the US share market has had an amazing run with barely a hiccup. In China, debt levels are staggering.

“Irrational exuberance rules.

“It is impossible to predict when, but something will go wrong and New Zealand should be prepared,” says Mr Peters.

Things can always go wrong with economies, and New Zealand should always be prepared. But at the moment things are looking fairly good.

Stuff: Unemployment falls to eight-year low as job creation surges

On Wednesday Statistics New Zealand figures showed unemployment fell to 4.6 per cent, the lowest in almost nine years. The survey showed that the economy added more than 100,000 in a year.

Covering the three months to the end of September, marking the final weeks of National’s nine years in office.

Participation in the labour force rose to 71.1 per cent, while the employment rate rose to 67.8 per cent, both record highs.

The number of people unemployed stood at 126,000, which is actually slightly higher than the number unemployed back at the end of 2015, but now the workforce is substantially larger with another 221,000 people employed

That’s a good recovery after the combined impact of a local recession followed by the Global Financial Crisis, and on top of that the very costly Christchurch earthquakes.

And from across the ditch: Kiwis ‘thrashing’ Australia in competitiveness

MAJOR economic reforms over more than a decade have dramatically increased New Zealand’s global competitiveness at the same time as Australia plunged down the rankings.

While New Zealand’s new prime minister Jacinda Ardern claims capitalism has been a “blatant failure” for the country’s poor and homeless, “nothing could be further from the truth”, according to the Institute of Public Affairs.

In a parliamentary research note distributed to Federal MPs, the free-market think-tank compares how the two countries fare in the World Economic Forum’s annual Global Competitiveness Report, released at the end of September.

“New Zealand is thrashing Australia in the competitiveness rankings because they substantially liberalised their economy with welfare, industrial relations, and tax reform,” IPA research fellow Daniel Wild said.

In 2004, Australia was the ninth most competitive country, based on 114 indicators including macroeconomic health, quality of infrastructure and labour market efficiency. Today Australia ranks 21st.

Over the same period, New Zealand has improved its ranking from 18th to 13th.

“Kiwis clearly have the upper hand in the economic competitiveness stakes,” Mr Wild said.

“Australians have become complacent about their economic prospects following years of economic growth. However, growth is not automatic, and serious economic reform is required to ensure prosperity and opportunity for future generations.”

So the new Government has a very sound economic base to build on. It gives them some financial flexibility to implement some reforms. Providing they don’t take too many risks or commit to too much increased spending the New Zealand economy should continue to relatively well.

“Full employment”

Labour campaigned on “full employment”, but it was sometimes not quite full.

On 4 July this year Labour’;s then spokesperson for finance, Grant Robertson, said in a speech titled The Future of Work and Labour’s Economic Vision:

Just to refresh. The Labour Party believes in full employment- anyone who can work should be able to work. As Minister of Finance I will re-assert Labour’s historic mission of full employment. In the first term of government we will lower unemployment to 4%.

And we want all parts of the economic apparatus working towards that goal. That is why we will expand the objectives of the Reserve Bank to include not just controlling inflation, but also maximising employment.

Interviewed on The Nation on 22 July (before she took over the leadership) Jacinda Ardern said that while 4% unemployment was their target she wanted to aim for “full employment”.

Owen: You raised jobs, so let’s go there. Labour’s aiming to get unemployment down from 5% to 4%. In real terms, how many jobs is that and how are you going to do it?

Ardern: Yeah, we are, and we’ve talked about some of the specific ideas that we’ve had. For instance—

Owen: Sorry, how many jobs will that be in real terms?

Ardern: Well, we’ve said we want to drop it down to 4% as a target. I can’t give you the specific number that that generates.

Owen: So about 25,000.

Ardern: We’ve set 4% as a target, but we are a party that believes in full employment. I want to make that point.

Owen: …we’re circling back round to the fact that your critics would say you’re not being that ambitious. We’re getting there anyway — 4.3%. You’re offering us 0.3%. Is that enough to motivate people to change, which is what you want them to do.

Ardern: And as I say, we’ve set some targets, but, actually, we are a party, as I say, is ambitious enough to say that, actually, what we want is full employment. We will never be satisfied as long we have anyone—

Owen: But that’s not the target you’ve set in the short term. The target you’ve set is this, which is so close to National’s, it could be National’s.

Ardern: We’ve set a target that allows us to make some projections around the kind of spending in investment in other areas. But, as I say, as much as we’ve got a number in this fiscal plan, our target is that as long as there is anyone who is unable to work because they cannot find employment, that isn’t supported, that doesn’t have the dignity of that work, we will not be satisfied. Yeah, we put a number on it. We believe in full employment. That’s bold.

A few days ago as Ardern was set to become Prime Minister, NBR:  Ardern says unemployment should be below 4%

Jacinda Ardern says New Zealand’s unemployment rate should be below 4%.

She says GDP is “barely growing” and unemployment is stuck at 5% but she says it should be below 4%.

Our unemployment actually dropped to 4.8% in the three months to June, the lowest it has been since the Global Financial Crisis hit in 2008.

Lowering unemployment down further, especially below 4%, will be challenging, although it got as low as 3.7% in 2007.

‘Full employment’ implies virtually zero unemployment, something that is unlikely to be attained. All governments aim for as low unemployment as possible. Sometimes outside influences, like the GFC, work against that.

Pushing up minimum wages significantly may or may nor impact negatively on employment. Same for changes to the 90 day trial period legislation.

Shane Jones, incoming Minister for Regional Development, says he will push for more employment in the regions and has said that both a carrot and stick approaches will be needed. This has already met with union resistance.

NZH:  Unions slam ‘work-for-dole’ proposal

The newly-appointed Minister for Regional Economic Development said today he had been encouraged to look into the idea as part of the $1 billion extra funding to go to regional New Zealand.

Jones said it was not just about regional GDP or giving people who weren’t working the opportunity to find employment,

The Government was also promising to plant 100 million trees a year.

“As we plant indigenous trees I’m going to get my indigenous nephews off their nono and they’re going to go to work”.

First Union general secretary Robert Reid said the entire union movement was implacably opposed to the idea.

“It’s long-standing policy for the union movement right from when it was tried by the National Government in the 1990s.

“What we are in favour of is work-for-wages schemes for unemployed people, even on a temporary basis like the 1970s and ’80s schemes.”

Reid said this would give workers the dignity of working for a proper pay packet as opposed to the indignity of working for the dole.

Greens may resist the stick side of that, having “remove excessive sanctions” from the welfare system written in their agreement with Labour and having campaigned on effectively ‘no questions asked’ benefits that may make it difficult to push those people with entrenched habits of unemployment into work.

Everyone benefits from better wages and more employment, and less unemployment, but the last 4-5% may be difficult to deal with.


Q+A – youth not in work, training or education

One of the most contentious issues about immigration is the approximately 90,000 youths not in work, training or education, but the apparent need to get immigrants to work because employers can’t find Kiwis to fill positions.

Some politicians say we shouldn’t bring in immigrants until unemployed Kiwis have been given a chance.

But many people know from experience that a hard core of young people in particular are either unemployable, or at least not keen on getting work and are very unreliable.

Q+A looks at all this (hopefully) this morning.

Nearly 90-thousand young New Zealanders aren’t in work, training or education. Yet many of our employers are desperate for skilled staff. American social entrepreneur Jeffery Wallace may have the answers. He joins us live.