Sunday, 28 Nov 2021

As many as 45,000 missing from unemployment stats, Māori undercounted

The unemployment rate plunged to 3.4 per cent today, lower than it has been at any time since before the global financial crisis, but one group warns that official unemployment statistics may be undercounting Māori.

A report by Sense Partners has looked into how the unemployment rate has diverged from another measure for unemployment – the number of people collecting a benefit.

Normally, you would expect these two numbers to trend roughly in the same direction – as the unemployment rate goes down, you should see the same thing in jobseeker numbers.

Instead, the opposite has happened, Jobseeker numbers climbed and stayed high, while the unemployment rate fell to record lows following the first wave of Covid-19.

Sense Partners economist Shamubeel Eaqub said that just five years ago, benefit statistics registered 6,600 more people than the Household Labour Force Survey or HLFS, the official measure of unemployment collected by Stats NZ.

Today, the number of people on a benefit is 45,500 higher than the HLFS, suggesting a widening gap between what Stats NZ was surveying, and what is actually happening.

“Five years ago, jobseeker numbers and unemployment numbers were pretty much the same, and now they begin to diverge,” Eaqub said.

“It is concerning that benefit statistics and the official unemployment rate are telling such a different story,” he said.

While jobseeker numbers were high for all ethnicities, they were far higher for Māori, despite Māori making up far less of the population than other ethnicities like Pakeha.

“The divergence between HLFS and benefit statistics is acute across ethnic lines, and the largest for Māori,” he said.

“This is consistent with much larger survey errors in the HLFS for Māori, especially those who live away from larger urban areas”.

The report was commissioned by Te Pūtahitanga o Te Waipounamu, which works on behalf of South Island iwi and is the Whanau Ora commissioning agency for the island.

Sense also published a second report urging active labour market policies – meaning policies that drive employment and wage growth – to avoid “scarring” from the recession.

Scarring refers to the effect observed after financial shocks when people who have been laid off or struggled to find work fail to recover from the crisis. These people can be trapped on low wages and reduced hours even as the economy returns to normal.

Te Pūtahitanga o Te Waipounamu pouārahi [chief executive] Helen Leahy said the reports showed that the same urgency that was used to battle the pandemic should be directed towards Māori unemployment.

“We now need to see the same urgency and decisiveness directed to the development and implementation of a Māori employment strategy,” Leahy said.

Official unemployment statistics are not a strict measure of the number of people who are not in work.

It measures the supply of labour – essentially the number of people who are looking for work but cannot find it.

Eaqub said there were some serious questions to be answered about the official statistics, particularly when they were sliced and diced into more granular data – for example Māori unemployment by region.

“There’s some issue with the sampling- the awful census we had didn’t help either,” he said, referring to the controversial 2018 Census, which was acknowledged to be so flawed the chief statistician resigned over it.

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