Another Spectrum

Personal ramblings and rants of a somewhat twisted mind

Unemployment down during COVID-19 pandemic

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Kia ora!

It’s official! Unemployment is down in the second quarter of 2020 (4%) compared to the first quarter (4.2%). What’s more, hourly earnings are up 3%. Great news isn’t it?

But don’t let statistics fool you. It all depends on how the raw data is collected and how it is interpreted. Here in Aotearoa New Zealand, the source of official unemployment figures are taken from nationwide household surveys and the criteria for being unemployed includes actively seeking employment over the previous four weeks or due to start a new job within the next four weeks. Actively seeking employment means you have approached potential employers for the purpose of gaining employment. For example, applying for an advertised job, sending in a CV or making contact with a potential employer.

As this country was in various COVID-19 alert levels during the second quarter, including five weeks of full lockdown apart from essential services, it’s hardly surprising that meeting the requirements for being classified as unemployed was difficult, if not impossible to achieve. Thankfully, the surveys collect more data that can be used to identify trends and the real situation. All this information is available on the Stats NZ website, and summarised in COVID-19 lockdown has widespread effects on labour market.

While the number of those who are classified as unemployed fell by 11,000, the number of people not in the workforce rose by 37,000, no doubt swelled by the large numbers of Kiwis returning from overseas. Perhaps more significantly, the number of hours worked fell by a record breaking 10% and underutilisation of the workforce rose by 1.6% – another record.

Underutilisation is defined as all those unemployed and

underemployed – those who are employed part time (working fewer than 30 hours a week) and have both the desire and availability to increase the number of hours they work

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

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.

https://www.stats.govt.nz/news/covid-19-lockdown-has-widespread-effects-on-labour-market

This graphic from the Stats NZ website summarises the real picture:

What the graphic doesn’t show is how the pandemic has impacted some sections of society. 90% of those who have lost jobs are women, mostly from lower paid positions. This also explains why national average earnings have risen. Minorities are also disproportionately represented as they too are more likely to be in lower paid jobs.

The government is actively promoting large infrastructure projects where jobs are typically male dominated, but has done little for the tourism, hospitality and retail sectors where significantly more females than males are employed. Tourism and hospitality are the hardest hit mainly due the our borders remaining closed to overseas visitors.

Wage subsidies introduced to lessen the impact of the pandemic cease at the end of this month, and no doubt that will have a flow on effect on employment over the coming months. I expect the data presented for the third quarter will look much worse.

The question I ask is how much of the downturn is directly attributable to the effects of the NZ lockdown, and how much is attributable to the global economic downturn resulting from the pandemic and how other jurisdictions have responded. As this country is highly reliant on international travellers visiting our shores, I can’t see our fortunes improving until such time as overseas visitors no longer present a hazard to our population. And on that we are entirely reliant on other nations getting the virus under control within their borders.

Author: Barry

A post war baby boomer from Aotearoa New Zealand who has lived with migraines for as long as I can remember and was diagnosed as being autistic aged sixty. I blog because in real life I'm somewhat backwards about coming forward with my opinions.

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