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Women workers dominate the beleaguered hospitality sector. (Photo: Getty Images)
Women workers dominate the beleaguered hospitality sector. (Photo: Getty Images)

BusinessAugust 5, 2020

11,000 New Zealanders have lost their jobs – and 10,000 of them were women

Women workers dominate the beleaguered hospitality sector. (Photo: Getty Images)
Women workers dominate the beleaguered hospitality sector. (Photo: Getty Images)

Data released by Stats NZ today shows the impact of Covid-19 on New Zealand jobs during the June quarter was disproportionately felt by women. Mary Jo Vergara from KiwiEconomics breaks down what it all means.

Women have historically fared well in times of war and crisis. During the Second World War, there was a dramatic rise in female employment as men were called to arms and women were called to the factories. There was an increasing demand for female labour to fill job vacancies left by servicemen. In September 1939, the female labour force was estimated at 180,000. In peacetime, it would have been expected to increase by 5000 every four years. But by December 1943, 228,000 women were employed in New Zealand.

And again, female labour was in demand during the economic recovery period in the 1990s. The recovery phase following the Rogernomics era was tentative, and employers sought flexible workforces. With part-time employment a popular option among women, female employment was barely disrupted. In fact, female employment was left relatively unscathed during the extensive restructuring in the 1970s and 1980s. And it all boiled down to the positioning of women in the labour market and the fact that finance minister Roger Douglas’ reforms targeted heavily male-dominated industries such as manufacturing.

Similarly, with the GFC, the financial sector was hardest hit, with redundancies left, right and centre. Because it was predominately male-dominated sector, the hit to employment in the recession that followed was softer on women than men. But the Covid-19 pandemic has created a recession like no other.

New Zealand was under level four and three lockdown for 50 days. With stay-at-home orders issued, businesses shut up shop and the service industry bore the brunt. And for the same reasons that male employment was hardest hit in previous crises, women are especially vulnerable this time around – over 60% of sales workers and over 70% of hospitality workers are female.

Today’s June quarter labour market statistics reflect how the lockdown has disproportionately impacted the women in the workforce. The female underutilisation rate shot up to 14.9% from 12.7% – a 29,000 increase – while the unemployment rate rose to 4.4% – a 1,000 increase. The numbers for men were more modest.

The female underutilisation rate shot up to 14.9%, up from 12.7% (Image: Stats NZ)

More striking is the gender breakdown of those no longer employed. Employment fell 0.4% over the period, which equated to an 11,000 fewer people in paid employment. And of those 11,000, 10,000 were women. That’s 90%! While it’s hard to believe such huge numbers, it’s clear that more women have been in the firing line.

Since lockdown, the hospitality sector has bounced back. Our proprietary transactional data shows spending at restaurants, cafes and bars have lifted from lockdown lows. But social distancing early on meant it was costly to maintain a full staff rotation. Despite now being at level one, some firms may make their smaller workforces permanent. It may take a while for female employment to return to pre-Covid levels. Because of the fiscal support to date, the numbers could have been worse, and the wage subsidy has helped many businesses remain in business, and employees remain employed. But for others, the subsidy payout may just be delaying the inevitable. Once the lifeline comes to an end, job losses will surely mount – and women are bound to be over-represented.

The war years were a turning point for women in the workforce. More women joined and more women moved into jobs traditionally carried out by men. The current recession may offer another opportunity to address the gender composition of the labour force. It may be that some women are looking to re-train to be redeployed into other industries. The door to the manufacturing and construction industries is open and these are sectors where women are largely underrepresented. Like how women were encouraged to enter the factories in the 1940s, the government’s $1.6b trade and apprenticeship training package might encourage more women to pick up the tools in the 2020s.

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Unemployment-GettyImages-456895380

BusinessAugust 5, 2020

Why the hell has New Zealand’s unemployment rate just gone down?

Unemployment-GettyImages-456895380

New Zealand’s unemployment rate has just fallen, defying experts and flying in the face of everything we expected. But according to Stats NZ, the devil is in the detail.

What’s all this then?

In a bizarre turn of events, New Zealand’s seasonally adjusted unemployment rate has actually fallen from 4.2% to 4% for the June quarter, according to the Household Labour Force Survey released by Stats NZ today.

The survey, which polls 15,000 to 16,000 households, provided the first official employment statistics from across April, May and June – the months including and immediately following New Zealand’s level four lockdown.

The figure has defied many expert predictions, which had forecasted the rate to rise to between 5% and 6% as a result of the massive economic impacts from Covid-19.

According to Stats NZ, the number of people not in the labour force has risen 37,000 this quarter. The number of employed people fell 11,000.

Why has it gone down?

While the lower rate seems like fantastic news, it doesn’t paint a complete picture due to the way Stats NZ has calculated the data. To be counted as unemployed, a person must not have a job, have been actively seeking work in the last four weeks, or be due to start a new job in the next four weeks.

This means that people who weren’t actively seeking work weren’t counted as unemployed in the survey, including those on the wage subsidy who, for whatever reason, weren’t utilised in actual work.

The underutilisation rate has increased to 12% (Image: Stats NZ)

These people were therefore captured in the underutilisation rate, which has increased from 10.4% to 12%. According to Stats NZ, underutilisation includes three other groups of people in the labour market:

  • Underemployed – those who are employed part time (working fewer than 30 hours a week) and have both the desire and availability to increase the number of hours they work
  • Available potential jobseekers – people who would like a job but are not currently actively seeking one. For example, a university student who’s just graduated and wants a job but isn’t actively applying for one yet
  • Unavailable jobseekers – people who are currently looking for a job but aren’t available to start just yet. For example, a mother who’s recently been looking after a child and in the next month will be able to start working again.

Stats NZ’s labour market and household statistics senior manager Sean Broughton said the underutilisation rate along with hours worked provided a more detailed picture of New Zealand’s labour market than the unemployment rate alone.

Composition of the underutilised workforce (Image: Stats NZ)

“At the end of June, there were around 39,000 more recipients of Jobseeker Support than at the end of March, but Jobseeker Support recipients are not necessarily unemployed.”

“This quarter, underutilisation rose from 10.4% to 12.0% – the largest quarterly rise since the series began, while hours worked were down by over 10% – another record.”

What about the “hours worked” figures?

Along with the underutilisation rate, the hours worked figures collected in the survey provide a more comprehensive insight into the degree people are actually being employed working.

Stats NZ has reported that the total number of hours actually worked in the June 2020 quarter fell 9.3 million hours (or 10.3%) compared with the last quarter and decreased 8.2 million hours (or 9.1%) compared with a year ago. These were the largest decreases recorded since the series began in 1986.

Will the unemployment rate get worse?

Because the unemployment figures have omitted those still on the wage subsidy but not actually working, unemployment is bound to increase and more people will move from underutilised to officially unemployed once the wage subsidy extension ends in August and September.

“The government’s extended wage subsidy is on track to end next month. And the situation offshore has deteriorated in recent weeks. We’re still forecasting an unemployment rate that will peak above 9% by the end of 2020,” said Kiwibank chief economist Jarrod Kerr.

Labour market summary (Image: Stats NZ)

Many New Zealand businesses have also enjoyed a surge in spending and retail activity through the June quarter, which experts say is the result of pent up demand from the lockdown.

With the spending spree expected to eventually fizzle out, more businesses may be forced to lay off staff to get through the slump, adding to overall unemployment.

“The initial sugar rush as we came out of lockdown has meant that many businesses have seen a spike in activity,” economist Benje Patterson told RNZ.

“As we move into the second half of 2020 many people are going to begin to roll off the wage subsidies, and it’s at that point that some businesses are going to have to make tough decisions.”

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