Less work, less pay for Kiwis

Written By: - Date published: 5:00 am, August 6th, 2009 - 5 comments
Categories: economy, unemployment, wages - Tags:

Today the Household Labour Force Survey, which includes the official measure of unemployment, will be out. The headline number is expected to be around 5.6%, up from record lows below 4% just nine months ago.

The HLFS has a few limitations though. It only measures the percentage of people who are ‘in the work-force’ (ie in work of actively looking for it) who don’t have work as unemployed. During a long recession, a lot of people drop out of the work-force altogther and they’re not counted as unemployed. The other major limitation is that you count as employed whether you are in full-time work or part-time – if a person loses their full-time job and picks up 10 hours a week somewhere else, it looks like nothing has changed if you just look at the headline unemployment number.

That’s why the Quarterly Employment Survey, which came out on Tuesday, is a great resource. It measures, among other things, the total number of paid hours worked by New Zealanders in the average week and the total pay we receive for it. I graphed the data for the last five years (and inflation-adjusted the pay). For all those green-shoot proponents, these should make sober reading.

hours worked and gross earnings

Collectively we worked 1.6 millions hours per week less (3.5%) than the same time last year (and don’t forget the population keeps growing). Total gross earnings are down ‘only’ $12 million a week (1%) but, like unemployment lags behind growth, wages lag behind unemployment. Treasury projects wages will keep falling until 2012. All this shows that even when we do return to GDP growth it will be a long time until working Kiwis feel the benefits.

5 comments on “Less work, less pay for Kiwis”

  1. Deciduous 1

    Yes, “All this shows that even when we do return to GDP growth it will be a long time until working Kiwis feel the benefits.”, there are a lot less tax revenues funding the bene’ classes these days.

  2. Deciduous 2

    Ahem?

  3. Peter Johns - bigoted troll in jerkoff mode 3

    I am lucky, I got a raise of just over 10%.
    I feel sorry for ple who have lost their jobs, but we are in the worst downturn for 80 years so it is to be expected. What we need is employer flexibility to help with the job losses. Lower work weeks are better than being laid off.

  4. vto 4

    sobering indeed.

    recessions simply suck. kiwis are inherently hard-working enthusiasts who love getting into something and giving it a go. which is perhaps why we tend to get carried away. Recessions simply make that very difficult, which is unfortunate.

    This downturn has had dramatic effects on many people around us through losing jobs or businesses and the flow-on effects. Including us – squashed flat and skidding along the bottom on the smell of an oily rag.

    It sucks.

  5. Interesting that “hours worked” has dropped faster than gross earnings. Means that it’s definitely those on lower incomes who are losing their jobs.

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