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Another 26,000 'will be unemployed' before peak reached (www.rnz.co.nz)

submitted 5 months ago by [email protected] to c/[email protected]

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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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[–] [email protected] 4 points 5 months ago (1 children)

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.

you're only counted as unemployed if you're actively looking for work. Otherwise you're not part of the labour force
Not all unemployed people will be on jobseeker. If you have a working partner/spouse you're not usually eligible, for example.
'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.
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.

[–] [email protected] 1 points 5 months ago (1 children)

‘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.

[–] [email protected] 2 points 5 months ago (1 children)

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.

[–] [email protected] 2 points 5 months ago

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.