Unemployment

Relevance

This is a key indicator of labour market outcomes and the lack of access to employment.

The unemployment rate is an important reflection of overall economic conditions and it gives some sense of the ease with which people are able to move into employment.

Current level and trends

In the year to March 2009, 4.5 per cent of the labour force (or 103,300 people) were unemployed and actively seeking work, an increase from 3.7 per cent (or 82,600 people) in the year to March 2008. This reflects the economic recession over the year to March 2009.

The unemployment rate reached a peak of 10.9 per cent in the year to March 1992 (184,200 people unemployed), then declined steadily between 1999 and 2008. The 2009 unemployment rate was slightly higher than the rate in the year to March 1987 (4.1 per cent or 69,700 people unemployed).

In the year to March 2009, 16 per cent of the surveyed unemployed who specified their duration of unemployment had been unemployed for a continuous period of six months or more, a decline from 17 per cent in 2008. The 2008 level of long-term unemployment was below that recorded in 1987 (26 per cent) and substantially lower than the peak of 54 per cent in the year ended March 1993.

Figure PW1.1 Unemployment rate, 1987–2009

Source: Statistics New Zealand, Household Labour Force Survey

Age and sex differences

Unemployment rates for different age groups have followed similar trends, but the rates for those aged 15–24 years have consistently been more than twice the rates for those aged 25–64 years.

Unemployment rates were the same for males and females in the year ended March 2009, after being higher for females than for males between 2003 and 2008, and higher for males than for females in the peak years of unemployment.

Table PW1.1 Unemployment rates (%), by age and sex, selected years, 1987–2009

Source: Statistics New Zealand, Household Labour Force Survey
Note: Average for March years

Ethnic differences

The Māori unemployment rate rose from 11.2 per cent in the year to March 1987 to a peak of 26.1 per cent in 1992. It fell to a record low of 7.9 per cent in 2007, increased slightly to 8.0 per cent in the year to March 2008, then rose to 8.8 per cent in the year to March 2009. Between 1987 and 1992, the unemployment rate for Pacific peoples rose from 6.1 per cent to 28.8 per cent, the highest rate for any ethnic group. After falling to 6.3 per cent in 2006, the Pacific peoples’ unemployment rate increased slightly over the following two years, then rose sharply from 6.5 per cent in the year to March 2008 to 8.5 per cent in the year to March 2009.

The unemployment rate is lowest among people of European ethnicity. Their unemployment rate rose from 3.3 per cent in the year to March 1987 to a peak of 8.1 per cent in 1992, before declining to 3.3 per cent in the year to March 2009 (up from the record low of 2.6 per cent in the years to March 2006–2008). The unemployment rate of the Other ethnic group category (made up mainly of Asians, but includes many recent migrants) increased from 3.5 per cent in the year to March 1987 to peak at 14.4 per cent in 1992 and 1993, fell to 5.2 per cent in the year to March 2008 and increased to 5.9 per cent in the year to March 2009.

Figure PW1.2 Unemployment rate, by ethnic group, 1987–2009

Source: Statistics New Zealand, Household Labour Force Survey
Note: Other includes Asian

International comparison

In the year ended December 2008, New Zealand’s harmonised unemployment rate of 4.2 per cent was the 10th equal lowest (along with Australia’s) out of 30 OECD countries and lower than the OECD average of 6.0 per cent. New Zealand’s rate was lower than those of the United Kingdom (5.6 per cent), the United States (5.8 per cent) and Canada (6.1 per cent). Since the mid-1980s, New Zealand’s unemployment rate relative to other OECD countries has ranged from one of the lowest (fifth out of 19 countries in 1986 with a rate of 4.2 per cent) to one of the highest (21st out of 25 countries in 1992 with a rate of 10.6 per cent).⁵⁷ In 2007, New Zealand had the fifth lowest proportion of people unemployed who had been unemployed for six months or longer.⁵⁸

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