Another 26,000 'will be unemployed' before peak reached
Another 26,000 'will be unemployed' before peak reached
It's not just the public sector feeling the pain - and there is more to come across the country, economists say.
Surely all these people losing decent paying jobs will have no impact on the economy right? Definitely not a recession right?
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March quarter data from Stats NZ showed an increase in the unemployment rate, from 4 percent in December to 4.3 percent. It said 134,000 people were now unemployed.
If 134k is 4.3% then 4% is about 125k people. So 9k people lost their jobs since December and another 26k to go?
Is this the difference in roles or the total redundancies (a certain percentage of people made redundant will go into a new role, some of which would not have had someone in it before)?
Maybe they expect a peak of about 150k people unemployed?
Sounds like they expect it to peak at about 4.8% if my maths is right? Historically, that's still pretty low.
He said the number of people on the JobSeeker benefit had been trending higher since the start of 2023. In March there were 187,986 people receiving this benefit, up from 131,721 in March 2019 and 168,498 last year.
I get lost with the new benefits. Are the 187k people on Jobseeker not all considered "unemployed"? Is this a case of some people with part time work (underemployed) being counted in one but not the other?
I get lost with the new benefits. Are the 187k people on Jobseeker not all considered "unemployed"? Is this a case of some people with part time work (underemployed) being counted in one but not the other?
Yeah the unemployment rate and benefit rates don't match up for a whole bunch of reasons.
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you're only counted as unemployed if you're actively looking for work. Otherwise you're not part of the labour force
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Not all unemployed people will be on jobseeker. If you have a working partner/spouse you're not usually eligible, for example.
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'Jobseeker' rolled up all the old benefits into one, so there are people with disabilities who can't work at all counted in those figures.
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You can work a limited number of hours while on jobseeker before it starts to abate.
The underutilisation rate is arguably a better measure, as it includes unemployed but also people who want more work but can't find it. It's potentially a 'truer' measure to compare to when, as you say, 4.8% unemployment is relatively low compared to other times in the past. You can work a couple of hours a week and you don't show up in the unemployment stats, but it hasn't always been counted that way.
‘Jobseeker’ rolled up all the old benefits into one, so there are people with disabilities who can’t work at all counted in those figures.
Yeah this is the benefit confusion I alluded to, and I was wondering if this was the case. I think things like what I think was called the Sickness Benefit is now part of the Jobseeker support benefit, despite having no requirement to look for work.
The underutilisation rate is arguably a better measure, as it includes unemployed but also people who want more work but can’t find it.
Digging into this, the unemployment rate went from 3.4% to 4.3% between March 2023 and March 2024.
The underutilisation rate went from 9.1% to 11.2% in the same time period.
I haven't managed to find data from before 2010 for underutilisation so it's hard to see the historically normal level.
2010 was when underutilisation started being collected.
What I was getting at though was that a historically normal level of unemployment is tricky to work out as the measure itself has changed over time, in part because the labour market has changed.
There are far more part time, casual, flexible roles today so even when the labour market gets worse, people may still be working some hours so they don't show up in unemployment stats, but they do in underutilisation. Employment has only been counted like this since (I think) the late 90s so it's not directly comparable to before then.
That makes sense. It's tricky with any survey data really. Over time the helpful question to be asking changes, so you can't really compare points that are far apart in time.
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The article says "will be unemployed" meaning they are going to get fired or laid off or whatever the term they are using these days.
Sounds like they expect it to peak at about 4.8% if my maths is right? Historically, that’s still pretty low.
I don't know. Usually mass layoffs have carry over to the rest of the economy. All the businesses serving those government employees are probably also going to downsize somewhat. Some may even go out of business who knows.
I get lost with the new benefits. Are the 187k people on Jobseeker not all considered “unemployed”?
Most likely not everybody who is unemployed is getting a benefit so the number unemployed should be higher than those seeking jobseeker benefits.
I don’t know. Usually mass layoffs have carry over to the rest of the economy. All the businesses serving those government employees are probably also going to downsize somewhat. Some may even go out of business who knows.
But if these are in addition to the 26k, then the 26k wouldn't be the peak?
Most likely not everybody who is unemployed is getting a benefit so the number unemployed should be higher than those seeking jobseeker benefits.
The article says in March 134k people are unemployed and 187k people are on the Jobseeker benefit.
Note that "unemployed" isn't everyone who doesn't have a job, you have to be looking for work to be considered. So for example, you generally don't count a stay-at-home Dad whose partner works to support the family.
Yeah if 26k are dropped from the public service then there will definitely be businesses that supply the public sector that will also downsize as a result. Then there's the indirect impact - particularly in Wellington - of fewer public services spending money with local businesses that will then also cause a contraction in their profits.
But the article doesn't say 26k public service workers, it says 26k people total. So the 26k forecast must surely include flow on impacts of the 4k+ public service jobs lost?
Oh right, sorry I didn't catch that part.
I guess its hard to know - because 26k probably includes people made redundant as part of the general downturn triggered by the reserve bank.