Unemployment up a notch to 4.5% as participation increases

Employment of women reaches a record.
Labour market manager Sean Broughton says “Women account for nearly half of total employed people.”

The unemployment rate rose a notch to 4.5% in the June quarter as the participation rate also ticked up slightly.

Economists had expected the unemployment rate to remain steady at 4.4% but many of the components, such as the labour cost index (LCI), were in line with expectations.

Reflecting the government-mandated rise in the minimum wage, the LCI rose 0.5% in the quarter and was 1.9% higher than a year earlier.

The minimum wage rose 75c to $16.50 an hour from April 1 and will continue to rise to $20 by 2021.

“About 3% of all wages were influenced at least partly by the minimum wage increase,” says Sarah Johnson, Statistics New Zealand's business prices delivery manager, adding that 17% of all surveyed salary and wages showed a rise in the latest quarter.

The data is based on a representative survey of the workforce and Statistics NZ doesn't measure what proportion of the workforce actually receives the minimum wage.

If the rise in the minimum wage hadn't happened, the LCI would have risen 0.4% in the quarter and 1.8% in the year.

In the private sector, salary and wage rates, including overtime, rose 2.1% in the year ended June with the pay equity settlement for care workers also contributing to the increase.

Average ordinary time hourly earnings rose 0.1% to $31 in the quarter while average weekly paid hours for fulltime equivalent jobs rose 0.1% to 38, or to 38.78 including overtime.

Increasing jobs
Filled jobs increased 0.8% in the quarter and were 1.2% higher than in the June quarter last year while the participation rate rose 0.1% to 70.9%.

The government statistician's measure of underutilisation of labour, a broad gauge of the untapped capacity in the labour market, rose to 12% from 11.9% in March.

The overall employment rate rose to 67.7%, with the employment rate for women rising to a record 62.8% from 62.6% three months earlier.

“The overall employment rate has remained unchanged at 67.7% for three consecutive quarters. However, the employment rate for women is the highest since records began over 30 years ago and represents 1.25 million women at work,” labour market manager Sean Broughton says.

The total number of employed people rose 13,000 to 2.63 million in the three months, with most of the growth due to women between the ages of 25 to 39 gaining jobs.

“Actually, there were more than 50,000 more women employed. Women account for nearly half of total employed people,” Mr Broughton says.

That was partly due to the 26,200 increase in people employed in healthcare and social assistance, “possibly in response to New Zealand's ageing population.” Women accounted for 80% of the increased jobs in the sector, matching its make-up.

The unemployment rate for women fell to 4.7%, a nine-year low, from 4.9% in the March quarter, while the unemployment rate for men rose slightly to 4.3%.

Wellington Bureau Reporter