Monday, October 28, 2019

Is The Unemployment Rate in New Zealand Really Low?

Statistics NZ published the latest unemployment rate; it is 3.9 percent (June 2019). Excellent. 

However, higher for females, 4.2 percent. Male unemployment rate is 3.6 percent.

So even in New Zealand, which is a very progressive liberal country, the unemployment rate is higher for women; it always has been.

Female wage rate is also lower than males. Male and female get paid the same, on average, up to age 30 or so, then males get paid more. Pay equalized again later in life. I have not seen much research on this in NZ. It could be the effect of child-rearing or something else, i.e., some might say discrimination. 

That's not the whole story.

Minorities such as Maori, Pacific People, and Asians have higher unemployment rates than Europeans. Here is the full picture.



The rates in 2019 are 3.4, 8.7, 8.2 and 4.2 percent for Europeans, Maori, Pacific People, and Asians respectively. Much higher than 3.9 percent! Maori and Pacific People unemployment rates are more than double the rate of the Europeans?

The averages over the past 10 years, are worse: 4.2, 11.6, 11.4 and 6.3 percent for Europeans, Maori, Pacific People, and Asians respectively.

Maoris and Pacific People participation rate is not significantly different from the rest.

The participation rate trend for these groups is constant. However, participation rates have been always, slightly, lower for the minorities than the Europeans. Really, if Maori and Pacific People are not looking for jobs, their unemployment rate might even be higher than the posted numbers.

So they look for jobs and don't get any, how do they live?

The Ministry of Social Development's Benefit Fact Sheet for 2019 shows that the total recipients of benefits, as a percent of working age population, are 37.9 percent Europeans, 36.9 percent are Maori, and 8.2 percent are Pacific People!

On average over the past 5 years, Europeans are 39.9 and Maori and 35.5 percent. Pacific Islanders are receiving much less benefits. Puzzling. Again, how do they get by?

Remember that Maoris make up less than 17 percent of the total population but they receive just as much benefit as the Europeans!Pacific People make up about 7.5 percent of the population. Problem.

Maori and Pacific People unemployment rates have been higher than 8 percent for decades. These are problems?

New Zealand is not a high-tech country really. We are a farming,  commodity-exporting, and services economy. Does it make sense that Maori and Pacific People cannot find jobs in such economy? How come their unemployment rates are persistently high?

On the other hand, work is a European concept, hence the importance of the statistics about the labor market such as unemployment and participation rates. The Polynesian culture has been a hunting and fishing then an agricultural culture. Maybe Polynesians do not enjoy a 9-5 type of work in an office, a warehouse, bank, factory or hospital...etc.Could that be part of the story? I don't know. Is there research on these issue? I could not find any.

Using a European yard-stick to measure their labor market performance might be useless. Of course I am not talking about all people of such heritage; I am talking in general. Either way one need to know what is going on with the high unemployment rate. 

          







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