Unemployment declines as underutilisation rises
The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today.
Unemployment rates for men and women converged at 4.7 percent, as the male rate rose from 4.5 percent last quarter and the female rate fell from 5.3 percent.
“There have been some gains in labour market outcomes, especially for women, over the past two quarters. However, annual changes indicate the labour market still hasn’t returned to pre-COVID-19 levels for men or women,” work, wealth, and wellbeing statistics senior manager Sean Broughton said.
The seasonally adjusted number of people in unemployment fell by 5,000 over the quarter, with the number of unemployed women falling by 8,000, offset by an increase of 3,000 men. Over the year, 13,000 more people were unemployed – 9,000 more men and 4,000 more women.
“March 2020 was the last quarter before we saw major impacts of COVID-19 on the labour market. Looking at our annual changes, from March 2020 to March 2021, let us see what the labour market was like before and after the impacts of COVID-19,” Mr Broughton said.
Underutilisation bumps up
The seasonally adjusted underutilisation rate increased to 12.2 percent, up 0.4 percentage points quarterly and 1.8 percentage points annually.
Over the year, 56,000 more people were underutilised – equal numbers of whom were men and women – bringing the level up to 366,000.
Underutilisation is a broad measure of spare capacity in New Zealand’s labour market and is just as important as the unemployment rate, as it gives us a more detailed picture of the workforce.
Auckland (which was in alert levels 2 and 3 for parts of February and March 2021) was the only region with a statistically significant annual increase in the underutilisation rate.
Labour market statistics: March 2021 quarter has more detail on statistically significant regional movements for labour market measures annually in Auckland and Otago.
The main contributor to the annual increase in underutilisation was a 31,000 increase in underemployed people, slightly over half of whom were women (up 17,000). Underemployment refers to people who work part time, but both want and can work more hours.
Increases in underemployment over the quarter, however, came almost entirely from women (up 7,000), with little change for men.
"Women saw a much larger increase in the unemployment rate last year than men, and now we have seen that rate decline over the last two quarters," Mr Broughton said.
"However, they continue to have a much higher rate of underemployment than men.”
As the number of underemployed people grew over the year, there was a corresponding increase in the additional hours they wanted to work per week, up 520,000 to 1.9 million (unadjusted). If all these hours were able to be filled, it would be the equivalent of an extra 47,000 people working 40-hour weeks added to New Zealand’s economy.
Employment up over the quarter
The seasonally adjusted employment rate rose to 67.1 percent, up from 66.8 percent in the previous quarter, but remained down from 67.7 percent in the March 2020 quarter.
The fall in the annual change in employment rate reflected the number of people who were employed (up 9,000) increasing by a smaller amount than the working age population (up 49,000) over the year.
While national changes in employment were not statistically significant, there was a statistically significant increase in the number of self-employed people without employees (up 24,700). This rise came primarily from women (up 17,500).
Wages steady
The LCI increased 1.6 percent in the year to the March 2021 quarter, with wage inflation remaining steady from last quarter. This is the first quarter since the December 2019 quarter where annual wage inflation has not slowed.
“Typically, March quarters see more muted wage inflation but this quarter we saw modest wage growth as New Zealand continues to have travel restrictions and businesses aimed to retain and attract staff,” Mr Broughton said.
Over the year, the proportion of jobs receiving wage increases rose to 46 percent, up from 45 percent, but remained at historically low levels.
In the year to the March 2021 quarter, QES average ordinary time hourly earnings rose 2.6 percent to $34.52. Men saw a 1.7 percent increase over the year to $36.39, while women saw a 3.7 percent increase to $32.36.
New QES design
We have redeveloped the Quarterly Employment Survey to ensure the QES remains fit-for-purpose. Part of the redevelopment is a new representative sample which is integral to producing accurate measures.
The QES is a stratified sample representing most businesses in the New Zealand economy. While we have made every effort to ensure consistency between the different designs, the March 2021 quarter is the first quarter of the new sample design and, as expected, we saw some changes. A refresh of businesses and weights in the sample can cause larger movements than normal. Previous quarters have undergone back-casting to minimise inconsistencies in the time series. However, these are provisional and are not able to account for all changes. Therefore, comparisons between the March 2021 and earlier quarters should be used with caution.
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