Jobseeker numbers topped 201,000 in June, and more job-losses expected

Friday, 10 July 2020

Work and Income’s jobseeker support client roll has increased to over 190,000 people.

The number of people receiving Jobseeker Support or Covid-19 Income Support edged up in June to just over 201,000.

At the end of the month 190,456 people were getting Jobseeker Support, up from 136,233 at the end of June last year, figures released by the Ministry of Social Development show.

But there were also 10,579 people receiving the more generous Covid-19 Income Support benefit, which was introduced on June 8 for people who lost their job after March 1, getting them higher weekly support payments than people who joined the unemployment queue at an earlier date.

The number of people surviving on main benefits was 353,440 at the end of June, up 21.1 per cent compared to this time last year, said MSD, the parent ministry for Work and Income.

* Wilson Parking receives more than $1m in wage subsidy

Speaking ahead of the the Government’s economic response to the global COVID-19 pandemic, Finance Minister Grant Robertson said New Zealand was “well and truly” in recession planning.

* More than 200,000 New Zealanders now on unemployment benefits

The impact of Covid-19 on the economy has resulted a raft of redundancies, and more job losses were expected when the Government wage subsidy scheme comes to an end on September 1, but Brad Olsen, senior economist from Infometrics, said more jobs would have been lost without the post-lockdown rebound in economic activity, or the Government wage subsidy.

More job losses will come, said Brad Olsen, senior economist at Infometrics.

It’s not only headline benefit numbers that show the hardship caused by Covid-19’s hit to the economy.

June saw Work and Income make 71,137 benefits advances to people experiencing hardship, up from 57,479 in May.

It also made 156,985 special needs grants, 66.6 per cent more than in June last year.

Just over 130,000 of the special needs grants were for households to buy food.

Olsen said: “The number of additional people supported by government benefit assistance plateaued last week.

“These latest figures reinforce the recent cautious optimism in the economy, with activity seemingly holding up,” he said.

A queue outside the Glen Innes Work and Income office on July 4.

“The economy seems to be in a wait-and-see period, with near-term activity doing better than many were expecting, which has stopped unemployment jumping higher in recent months.

“However, the economy isn’t out of the woods yet, with an economic readjustment expected after September when the wage subsidy runs out.

“There will be further job losses, but the extent of these losses will be less than if there was never a wage subsidy,” he said.

“It's important to highlight that in the week ending July 3, there were nearly 81,000 additional jobs covered under the wage subsidy extension, taking the total under the extension to 372,000 jobs.”

“The additions to the wage subsidy extension underscore that some businesses are still struggling,” he said.

“I’d expect there will be some tough decisions for businesses that re-emerge into the market without government assistance in September, and who are still showing lower revenue.

Young workers have suffered a disproportionate hit during the Covid-19 economic crisis, MSD benefits data shows.

At the end of June there had been a 65.6 per cent rise in the number of people aged 18-24 receiving Jobseeker Support compared to June 2019.

For people aged 25-64, the increase was 33.4 per cent.

The scarcity of work opportunities has been felt hardest in Northland and Gisborne, followed by the Bay of Plenty and the West Coast of the South Island.

At the end of June the proportion of 15-64 year-olds receiving Jobseeker Support in Northland was 10.2 per cent compared to just under 8 per cent in June last year.

In Gisborne 9.6 per cent of people aged 15-64 were receiving Jobseeker Support compared to 7.4 per cent in June 2019.