Māori, Pasifika, young people and small regions hardest hit in job downturns

The Reserve Bank’s Monetary Policy Committee (MPC) uses monetary policy to maintain price stability and support maximum sustainable employment (MSE). This Analytical Note research builds on our understanding of dynamics in New Zealand’s labour market.

This knowledge helps us interpret how new developments in the labour market will affect the New Zealand economy. It also helps us advise the MPC on the current state of the labour market, and how close we are to maximum sustainable employment.

COVID-19 and the associated lockdown and travel restrictions resulted in a severe recession in New Zealand in 2020, and employment dropped below its maximum sustainable level (MSE). The recovery to date has been stronger and faster than first expected, however, its effect on employment remains uneven across regions, sexes, and other groups.

To put these developments into context, we analyse the past experiences of different ethnicities, age groups, sexes, and regions during past recessions in New Zealand in a series of three Analytical Notes.

In the first research Note we analyse how previous labour market cycles between 1986 and early 2020 have impacted Māori, Pasifika, and European peoples.

Labour market cycles across different groups: What does history tell us? Part I: Theory, ethnicities

The second research Note shows unemployment among young people (under 25 years) is likely to be higher and more long-lasting than others in a jobs downturn.

Labour market cycles across different groups: What does history tell us? Part II: Age and sex

The third research Note shows jobs in smaller regions such as Northland tend to be more vulnerable to downturns than other regions, such as big cities with more diverse industries that are less susceptible to economic shocks.

Labour market cycles across different groups: What does history tell us? Part III: Regions

About the data:

The papers look back at jobs data from 1986 when current labour market data (HLFS) was first collected, to just before the COVID-19 pandemic started in early 2020.

Most recent figures show an unemployment rate of 3.2% in the December 2021 quarter.

Labour market statistics: December 2021 quarter

Since the Covid-19 pandemic began, unemployment rates for Māori have dropped from 8.6% in the March 2020 quarter to 7.0% in the December 2021 quarter, after rising only slightly in late 2020. The unemployment rate for Pasifika has also fallen from 7.8% to 5.4% in the same period, despite briefly rising in late 2020 and early 2021.

Latest unemployment rates (December 2021 quarter) for younger people (15-19 years) are much higher than people in the mid-twenties or older. The unemployment rate is currently low, below 5%, across all regions.

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