4 Feb 2021

Unemployment rate falls but women, Pasifika and Māori still 'over-represented' - CTU

6:46 am on 4 February 2021

Despite the latest unemployment figures being better than expected, there are warnings that for Māori, Pasifika, and women the economic revival is not that rosy.

A Hamilton woman says her ten year search for work has uncovered employers bad attitudes to disabled job hunters.

Photo: 123rf

Bucking economists' predictions of a rise, the December quarter jobless rate in fact dropped from 5.3 percent to 4.9 percent.

Westpac chief economist Dominick Stephens said he was "absolutely flabbergasted" unemployment fell to that extent.

"Clearly Covid did less damage to the economy than anticipated and the government and Reserve Bank's efforts to stimulate the economy have just had a roaring impact," he said.

Madison Recruitment general manager Christian Brown was also initially surprised.

"I, like everybody else, was expecting the unemployment rate to go up. But, in saying that, once I reflected on it the fact that it's gone down is actually probably consistent with what we're seeing across the market," he said.

While the figures show the tourism sector is still suffering, that was offset by an increase of 21,000 jobs in construction.

"It has just been a big boom time for them, so certainly it's a lot easier to find jobs out there, there's a lot of work out there, but it's still harder to find the right people to go into those jobs," Brown said.

He said the closed border presented a big challenge for filling highly skilled roles, and meant there were fewer good candidates for temporary roles.

However, with confidence picking up, he expected companies would press go on their growth plans, leading to even more job opportunities in the coming months.

Finance Minister Grant Robertson said while there was still work to do, New Zealanders should be proud of these figures.

He said they illustrated "a strong economy that has been resilient through an incredibly difficult time", and he credited the government's Covid-19 response.

"The wage subsidy gave employers the confidence to keep people on, and I think we're still seeing the impact of that in these numbers.

"4.9 percent is still higher than we would like and so we will continue to work hard to make sure that comes down, but the predictions that we had of up around 10 percent by this period of time have not eventuated," he said.

National's social development spokesperson Louise Upston was not terribly impressed by the data.

"Yes it shows that the wage subsidy, which National supported, was useful, but there are still 60,000 more people than this time a year ago who are on the JobSeeker benefit and the government needs to prioritise helping them into work," she said.

Council of Trade Unions economist Craig Renney warned that while the headline figures looked great - if you dug a little deeper, it was not such a great news story.

"Female unemployment is higher than general unemployment. Māori and Pasifika unemployment actually rose according to the data, youth unemployment went up from where it was last year.

"So for those groups who were perhaps more represented in terms of unemployment [they] continue to be over-represented and their challenges seem to be getting a bit more stark," he said.

Renney said lifting the hood on wage growth figures showed more than half of workers did not get a pay increase last year and private sector wages barely kept up with inflation.

"If we're going to 'build back better', to use that phrase, then we really need to tackle the problems of how do we have systematic disadvantage in access to employment, but also, do we have systematic disadvantage in terms of wages, and who is benefiting from wage growth in the economy," he said.

Renney said the government needed to turbo-boost programmes that supported vulnerable groups, such as Mana in Mahi - something Robertson said he acknowledged.

"We can't be satisfied when Māori unemployment is higher than the rest of the population.

"I'm not for a moment pretending we've done the job here, we've got a long way to go and Covid's got a long way to go, but we can take confidence from where we are," Robertson said.

Stephens said with the vaccine on the horizon he expected things would only keep improving.

However, he pointed out a flip side of these surprising figures.

"The government and Reserve Bank's efforts to shore up the economy in the face of Covid, perhaps, were overdone.

"The Reserve Bank in particular may, with the benefit of hindsight, be regretting some of the stimulus measures that it put in place late last year, which have after all really reduced interest rates resulting in a big lift in house prices that is perhaps looking unnecessary at this point," he said.

Stephens speculated that the Reserve Bank would now look to pull back some of its stimulus earlier than expected.

Get the RNZ app

for ad-free news and current affairs