Discouraged workers are those who
have actively searched for jobs in the past 12 months but believe that there
are no jobs for them. OECD publishes data on what they call marginally
attached workers. They are defined “Marginally attached are persons aged 15 and over, neither
employed, nor actively looking for work, but are willing/desire to
work and are available for taking a job during the survey reference
week. Additionally, when this applies, they have looked for work during the
past 12 months. This measure is broader in scope than the discouraged worker
data-set and may be used to produce alternative measures of labor
underutilization.”
The figure below plots New Zealand,
Australia (shorter sample), and the United States OECD data as a percent of
working age population (15-64) from 2000. New Zealand and Australia are on the
primary axis and the U.S. is on the secondary axis. The picture is rather
dramatic and alarming. The trend is rising in New Zealand and falling in
Australia and the United States. We have nearly 300,000 marginally attached
workers in New Zealand. Given the relatively smaller size of New Zealand labor
market, that amount to more than 10 percent of the working age population. The
number of workers in the U.S. is really a small relative to the size of the
working age population. On average, Australia’s rate of marginally attached
workers is more than 10 times as large as that of the U.S. New Zealand’s is
more than three times as large as Australia’s.[1]
These workers could have been unemployed
for a long time; or do not have the updated skills needed to get a job; or have
suffered from sort of discrimination. These people would take a job if it were
offered. Usually the number of such workers falls during the recovery as in the
case of the U.S. and Australia in the figure below. Surprisingly, the number
increased in New Zealand. Discouraged workers do not include those who have
dropped out of the labor force because they went back to school, disables, and
women who are on maternity leave.
New Zealand's labor statistics
appear healthy, except for this strange statistic. The upward trend is alarming
because there might be thousands of highly skilled and productive workers who
are discounted for other reasons. I did not find any papers on the
subject in New Zealand Ministry of Business, Innovation, and Employment.
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