Rise in number of people receiving Job Seeker benefit unsurprising - Economist


A seemingly surprising divergence in the jobseeker and unemployment numbers reflects the fact not all those who are unemployed receive the benefit, an economist says.

The National Party has been questioning why there has been a rise in the number of people receiving a Job Seeker benefit when unemployment numbers are so low.

However, ANZ economist Finn Robinson told Morning Report it was not so surprising.

"Only 32 percent of people who were unemployed according to Stats New Zealand last year were actually receiving the unemployment benefit," he said.

"So there's actually quite a few differences between those two concepts, which mean that it is quite common to see divergences over time."

slight rise in the most recent unemployment figures to 3.3 percent this week - up from 3.2 percent the previous quarter - went against expectations of a further fall.

The number of work-ready people on jobseeker support to the end of June was 100,086, about 60 percent higher than the 63,030 when Labour took office in 2017 but down from the peak 2020 year when the number was 123,966 people.

Robinson said in some cases, people who were not working were members of a household that received too much income to allow them to receive a benefit.

"That's one of the biggest reasons why people who are counted as unemployed by Stats New Zealand aren't then receiving the unemployment benefit."

He said people could also be "under-employed", meaning they did not work enough hours to put them over the threshold that ruled them out of receiving a benefit.

"So you can still receive the unemployment benefit there to help you look for a job that gives you more hours, but in Stats NZ's data you have to work for just one hour to no longer be counted as unemployed," he said.

"It's been one of the biggest surprises - and a good surprise to be fair - that we've seen how resilient the labour market has been and I think a lot of credit there goes to the job - or the policy - response over 2020 in keeping everybody attached to their jobs."

Robinson said the damage to New Zealand's labour market as it "came out of COVID" was accordingly less than it could have been.

"The result is we've seen record low unemployment."