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.
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.