(Image: Getty Images; additional design: Archi Banal)

PoliticsFebruary 9, 2022

The winners and losers in the latest jobs data

Guest writer

(Image: Getty Images; additional design: Archi Banal)

Craig Renney, the economist for the Council of Trade Unions, looks at the latest employment stats and finds that for all we should be celebrating, there’s still work to be done.

Unemployment fell to a record low of 3.2% in the latest data from Stats NZ, which places New Zealand fifth in the OECD and well ahead of the UK and Australia. Clearly, this is good news. Fewer unemployed people mean more people in work, suggests that we have a healthy economy, and means more money in workers’ pockets, right?

However, if we look closely at the data, it’s clear there are still winners and losers in the labour market. It also suggests there’s still work to do to support a goal of full employment in New Zealand.

So, who’s winning? Well, we could start with the 48,000 fewer people unemployed than a year ago. Two years ago, when Covid-19 first struck, we thought that unemployment would be double the rate it is today. Compared to this time last year, there are an additional 101,000 people in employment – during which time the labour force grew by only 53,000. Job growth outstripped population growth.

Female workers are winning the employment race right now as well. There were 66,000 new female employees last year – nearly twice the 35,000 new male employees. The fact this went into reverse last quarter, with a small fall in female employment, does bring into question how long this improvement will last, however. Women are also getting better at gaining permanent employment. Over the last nine months an additional 52,000 female workers got permanent employment – against 26,000 men.

Perceived job security for workers also appears to have improved. About 46% of workers now say there is “almost no chance” of losing their jobs in the next 12 months. This is up from 35% in June 2020 and up 4% from a year ago. Job security continues to be an issue for temporary and casual workers, who are far less confident – only 29% of whom think there is “almost no chance” of losing their jobs in the next 12 months. Union members are far more confident than the general workforce in their continued employment, with 56% thinking that there is “almost no chance” of job loss.

Where we have not seen as much strength in the labour market is in what is called underemployment, when people want to work more hours but can’t get them. There were still more than 100,000 people in this situation in New Zealand. Adding together the number of people who are looking for work with the number wanting more work finds 256,000 New Zealanders who want work. That’s bigger than the population of Wellington, suggesting that we are not yet at full employment just yet.

That is also borne out in the employment data for young people. While the number of 15 to 24-year-olds not in education, training or employment fell by 12,000 over the year, progress in the last nine months has been painfully slow. Since June that number has actually increased. The unemployment rate for Māori and Pacific peoples is also still a matter of concern, running at 7% and 5.4% respectively. That’s better than in the recent past, but still shows huge untapped potential in these communities is being missed.

So, who else is losing in this data? Well, one obvious place to look would be in workers’ pockets. Despite strong economic growth and strong employment growth, we are not seeing strong wage growth. The labour cost index showed an increase of 2.6% in wages. Inflation is 5.9%. Private sector workers saw a slightly higher rise than public sector workers, at 2.8% and 2.3% respectively. Looking across the workforce, 38% of workers saw no pay rise at all this year. This is the same as in December 2019, just before Covid. At least 80% of workers saw a pay rise lower than the current inflation rate, and two-thirds of workers got less than 3%.

When we look at the situation using a different dataset also released last week, the quarterly employment survey, we can see that increases in wages came increasingly from overtime payments. Overtime payments increased 11.2% annually on one measure. That dataset also shows that the number of paid hours of work increased, rising 6.6% in a year. New Zealanders seem to be working longer and harder but are not yet seeing the results in their pay packet.

At this point, we should think about the recent data in its wider context. This is the lowest rate of recorded unemployment since the current records began in 1986. And yes, despite some recent press, you can broadly trust these numbers – they are not the result of some recent tricks or new sleight of hand. The data is well ahead of where we thought we would be just a year or two ago. More people are in work. People feel more secure in work. The number of people out of work for six months or more fell 25% last year. These things are good and should be celebrated.

But we shouldn’t get too excited just yet. Wages are not catching up with the increased demand for work. Work is unequally divided, with many wanting more work and many working overtime. Young people, Māori and Pacific peoples still face poorer labour market outcomes. People in non-traditional forms of work feel more insecure about their employment prospects. It’s why fair pay agreements are needed. It’s why employment insurance is needed. We have plenty of work to do to make sure that there is good work available for everyone who wants it.

Keep going!

The polls paint a picture (Image: Tina Tiller)

PoliticsFebruary 9, 2022

Polls set stage for a box-office year in New Zealand politics

Toby Manhire

Editor-at-large

The polls paint a picture (Image: Tina Tiller)

The third major poll of the year has landed, and the lay of the land as we approach an election year is becoming clear.

Call it a blessing, call it a curse, but the three-year term means an election is constantly lurking. In New Zealand it is always election year, the year after an election, or the year before an election. We’re in that last category now. Though we may not yet be halfway through the term, every time the words “next year’s election” are used, the minds of politicians will tighten in focus. And as the parliamentary year begins, three publicly released polls across recent weeks offer a useful summary of the terrain ahead.

On Monday night the first Newshub/Reid Research poll for the year was published. That came a week or so after the first poll by Kantar (formerly Colmar Brunton) for 1News. On January 21, results from a Curia poll for the Taxpayers’ Union lobby group were revealed. Each of the polls surveyed 1,000 voters and between them covered the periods January 10-17 (Curia), January 22-26 (Kantar), and January 22 to February 4 (Reid), meaning they provide a good glimpse between them of the lay of the land.

What do they say? The table below includes the change in support from each organisation’s previous poll. In the case of both the broadcasters, that was in November last year; for the TPU/Curia, it was mid-December.

The first and most obvious conclusion to draw is that Labour is not – barring some miracle – going to win another single-party majority. The 2022 result was an MMP aberration, born of (a) overwhelming popular backing for pandemic management and (b) overwhelming despair at the state of the main opposition party. To varying degrees, neither is true today. It is inconceivable at this point that either of the two biggest parties could govern alone.

In that light, compare the sides of the house. On the above numbers, Labour and the Greens are sitting on 51.6%, a lead of about nine points over National and Act, which are on a combined 42.3%. A comfortable gap, but hardly a yawning chasm. It’s a lot less, certainly, than that 2020 blowout, when there was a distance of almost 25 points between the two blocs.

The leaders

The challenge for the centre-right, therefore, is clear enough: add at least five percentage points, and take them off the centre-left, not each other.

Some preliminary thoughts on the task ahead for the parties below, but first, let’s repeat the poll-average exercise in the preferred prime minister stakes.

The big leaps in the Luxon change for the broadcast polls are explained by the fact that he was a backbench, relatively low-profile MP when they last surveyed, in November 2021.

In her package on Sunday evening, Newshub political editor Jenna Lynch measured Luxon’s popularity today (17.8% picked him as preferred PM in the Reid poll) against his predecessors at the same early stage of their leaderships. She said:

When you compare Luxon's first preferred prime minister poll as leader with Judith Collins' first as leader back in late 2020 – 14.6% – and Simon Bridges' 9%, Luxon looks pretty good.

But prime minister Jacinda Ardern and former prime minister Sir John Key are the ones he'll want to be compared with. When Ardern took over as Labour leader, her preferred prime minister result was 26.3%, while Key debuted on 24%.

As Luxon acknowledges, he faces a year of presenting himself to the electorate – a very long job interview – to hoist that.

The Kantar/1News, meanwhile, had a headline-grabbing finding: that Luxon had beaten Ardern on net approval rating. His net approval was plus-22; hers plus-15. That’s a big boost to National spirits, but should come with a grain of salt – the numbers look slightly different when you add in those who didn’t take a view. Luxon’s numbers were 42% approve, 20% disapprove and 37% don’t know/refused to answer 37%. Ardern’s were, respectively, 52%, 37% and 11%. For Luxon, the coming months are a critical opportunity to win that approval from those who are on the fence.

Labour

In her “opening up” speech last week and her statement to parliament yesterday, Jacinda Ardern attempted to cast her gaze beyond the pandemic, with a laundry list of policy priorities and a lot of use of the word “future”. The election, very likely, hopefully, will be fought on alternative post-Covid prospectuses. But the virus is not going anywhere in a hurry.

The government’s Covid management has attracted more criticism in the last weeks than probably ever before, particularly in relation to the steel ramparts of the MIQ system – an issue that found a casus Bellis and exploded – as well as the sluggish at best efforts to secure timely stores of rapid antigen tests. The government will hope the "opening up" announcement last week has taken some of the air out of the MIQ rancour, though Newshub polling was almost complete when it happen, so doesn't measure its impact.

The broadly positive polling for Labour may also come down to the simple fact that, for most of us (or at least those who are vaccinated and not involved in sectors that depend on large gatherings or international tourists), it was a classic Aotearoa summer. We may get a shock when omicron seeps properly through the population, bringing risk to the unvaccinated and the vulnerable, applying pressure to the health system and disrupting work and home lives in a whole lot of ways. If the anecdata about people eschewing tests despite symptoms is true, by the way, then the government will need to move sooner rather than later to reduce isolation periods.

But the catastrophising in parts of the media, whether in the UK or in New Zealand, where one broadcast anchor yesterday lamented “scandal after scandal after scandal”, is just plain overblown, especially compared with the plight and popularity of so many of Ardern’s counterparts around the world.

For those demonstratively scratching their heads over the failure of Ardern and Labour’s numbers to nosedive, the most compelling answer lies in these two charts, which measure, first, Covid-19 deaths and, second, the severity of restrictions over the course of the pandemic. Neither will be enough to win the 2023 election, but they tell a story that is not easily forgotten.

National

There was a discernible skip in the step of National MPs when they gathered for their summer retreat in Queenstown, enabled presumably because they no longer have such stiff necks from constantly looking over their shoulders. Luxon may not be the finished article, but he is intelligent, relatively optimistic, and doesn’t walk around lighting fuses. His speech on day one at parliament yesterday was cogent, and he has assembled a capable team around him. As he is at pains to remind everyone, however, there is a long way to go, and – especially on his favoured issues like productivity and education – the bone could use some flesh. The task of the National Party is not just to hold the government to account, but to propose an alternative vision of this country so that come the next election New Zealand people will be able to see a National government in waiting, ready to go. Don’t take my word for it – those are the verbatim words of Luxon in the house yesterday.

Luxon has in recent times sought to stress that National isn’t just economically focused, but cares about people, about issues of social justice, equality and wellbeing. The international speaker at National’s getaway in Queenstown was David Cameron – or would have been, had he not had to withdraw after coming down with omicron. The choice was no accident, however: the former UK Tory prime minister sought to define himself as champion of Modern Compassionate Conservatism, the Big Society and climate-friendly husky-hugging. Instead, National MPs ended up with an address from Cameron’s once-right-hand man, George Osborne, who is best remembered for an altogether less cuddly advancement of austerity when he was in charge of the UK finances.

And while that is absolutely not the image in which Luxon and Simon Bridges would wish to be cast, it remains, as ever, true that the National Party vote relies on putting back together a reputation for sound economic stewardship, particularly as the country deals with the rising cost of living. Luxon evinces an admiration for Barack Obama, but 2023 success is better defined by the message famously pasted on the wall of Bill Clinton’s 1992 campaign HQ: It's the economy, stupid.

Act

If spinning is an important skill for government, then Act could not be more ready. In an email sent out after the Newshub poll on Monday night, Seymour told supporters that it “has Act on 8%, up on our 2020 election result”, before observing that “Act plus National are down four”. Curiously, there was no mention of Act’s number being cut in half.

Seymour is right, however, to emphasise that Act remains above its election result of 7.6%. Seymour and his indefatigable backroom team have successfully erased any shred of the long running impression that Act’s existence relied on the Epsom beneficence of National. For a good stretch there, David Seymour was single-handedly the most effective opposition party.

And yet the rules of political gravity remain: if the trend continues, MPs will get ants in their pants. In that light, it was notable that Seymour in parliament yesterday chose to name-check and big-up each member of his caucus. The exercise went well, apart from when he introduced one of his MPs as “Simon Bridges”.

Greens

The Greens’ support has so far proved more solid than anyone’s, sitting just under 10%, up from an election result just shy of 8%. That’s despite the sometimes uncomfortable place the party takes, sort of kind of maybe in government but also not. And despite the fact they've had a low profile in media of late. It’s a fair assumption that while Act picks up voters on the right dissatisfied with National, the Greens are scooping up voters who think Labour too centrist. Even if their MPs or members wanted to (they almost all don’t), the chances of the Green Party declaring that they could work in government with National ahead of the next election are close to zero.

In his speech to parliament yesterday, co-leader James Shaw hinted at some of the wealth transfer to the rich that emerged from the Covid response but stopped short of going directly there. He made a case, however, that the Greens’ mixture of environmental and social priorities stemmed from the same place. “The root cause of all of these crises ... is an economic system that privatises benefit and socialises cost. It will not be transformed by incremental action,” he said.

In the short term, Shaw’s priority will be getting as wide as possible cross-party support for the Emissions Reduction Plan, which was kicked from last year to this May.

Te Pāti Māori

As long as the Māori Party can secure an electorate seat, it’s tracking to bring two MPs at least to parliament again. As witnessed in the “divorce the royalty” call on Waitangi weekend, the party has found a fresh energy with Rawiri Waititi and Debbie Ngarewa-Packer at the helm. It’s not at all out of the question that they could end up with an important, pivotal even, share of the house after the next election.

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