Coronavirus: Year on from lockdown, how are New Zealand's employment statistics looking?

The number of people on the main unemployment benefit remains well above pre-COVID-19 levels.
The number of people on the main unemployment benefit remains well above pre-COVID-19 levels. Photo credit: Getty.

By Sarah Robson of RNZ

In the year since the country went into lockdown, job losses have been nowhere near as bad as feared in the early stages of the pandemic, but the number of people on the main unemployment benefit remains well above pre-COVID-19 levels.

Before New Zealand entered alert level 4 in March 2020, there were about 145,000 people on the jobseeker benefit - that's 4.7 percent of the working age population.

Four weeks later, that number had jumped to almost 175,000.

It now sits at about 205,000, or 6.5 percent of the working age population.

Callum was among the first wave of lockdown job losses.

Back in March last year, he had just started a new job.

"We went into lockdown and then basically a week later, I got a phone call saying that I was being let go."

Charlotte was in a similar situation - she had been pretty happy in her hospitality job that she had landed early last year, just before COVID-19 hit.

"And then about a week before [lockdown], my employer rang me and said, 'I'm really sorry, I can't keep you'," she said.

In the early stages of the pandemic, Treasury had forecast unemployment would peak at about 10 percent in September last year, easing gradually to about 8 percent by mid-2021.

Infometrics senior economist Brad Olsen said there were fears hundreds of thousands of people would be out of work.

"Businesses were going to have to shutter, there wasn't going to be enough money going through the system to keep those businesses going, to keep pay packets going out each week," he said.

In April 2020, a report to Cabinet said about 320,000 people could lose their jobs because of COVID-19 and be eligible for the government's 12-week income relief payment.

That number was subsequently revised down, with officials estimating in May that 230,000 people could be eligible.

But the number of people needing it ended up being significantly lower, with about 40,000 grants made over the duration of the scheme.

For Chrissy, who was made redundant in a Covid-related restructure, the $490-a-week payment was a godsend.

"Because I had that income relief payment, it sort of covered me to live, so I wasn't struggling in poverty and I could be not super fussy, but a little bit more fussy about what my next job was going to be."

While Chrissy landed a new job as the 12-week payment came to an end, Callum had a tougher time.

"For the rest of the year, I was basically either on the benefit, or doing very minor short-term work," he said.

But over lockdown, Callum got the chance to think about what he wanted to do next, and he's just started a pre-apprenticeship course at his local polytech.

Charlotte wasn't eligible for the benefit or the income relief payment. University work kept her busy last year, but now she's back on the job hunt.

"I have honestly lost count of the number of applications I've been putting in, it is pretty stressful."

In the December 2020 quarter, the unemployment rate was just 4.9 percent.

Infometrics' Brad Olsen said the $14 billion wage subsidy schemes prevented a wave of job losses sweeping the country.

Despite that support, he said there were still plenty of people suffering.

"We know that Māori and Pasifika unemployment continues to rise, even though the headline unemployment rate has dropped down to 4.9 percent in the December 2020 quarter, we also know that particularly young people and women are also most affected by this downturn," Olsen said.

With economic uncertainty continuing in 2021, Olsen said there was a chance unemployment could bounce back up again.

"Given we still don't have our borders open and that is harming some parts of our industries and also just given where the pandemic currently sits, we're certainly not through it yet and it remains quite an uncertain beast that could rear its head again at any point," Olsen said.

"Because of that, there is a worry the labour market strength we're currently seeing won't necessarily hold up."

Bank of New Zealand, Westpac and Kiwibank all believe the economy is shrinking and there is the possibility of a double-dip recession.