Record shift off benefit 'sign of improving job market'

Thursday, 15 April 2021

Unemployment rate falls, and economic outlook brightens.

A record number of people moved from a benefit into employment in the March quarter, Social Development Minister Carmel Sepuloni says.

There were 32,880 people who shifted from a benefit into work in the first three months of 2021. That was 10,670 more than in the same period of 2019. The number of people on the main benefits fell by 23,568.

“More people moved into work last quarter than any time since the Ministry of Social Development (MSD) began keeping electronic records in 1996,” Sepuloni said.

“The investment the Government has made during our response to Covid-19 is working and has led to lower than predicted unemployment.

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

* Coronavirus: Jobseeker obligations suspended as unemployment climbs

Job losses increased from March last year, when the first lockdown forced businesses to close their doors.

“The longer people remain on a benefit the more difficult it becomes for them to re-enter the labour market, so early interventions are vital. That’s why the Government invested in the wage subsidy to keep people in work, and invested an additional $150 million to increase MSD’s employment and financial services as part of our Covid-19 recovery package.”

There are now 365,937 people receiving a main benefit.

Infometrics economist Brad Olsen said it was positive, but there was always a seasonal shift off the benefit at this time of year. With greater numbers of people receiving a benefit, it was reasonable to expect that movement would involve more people, he said.

There are about 55,000 more people receiving a Jobseeker benefit than there were before the alert level 4 lockdown last year. “We are making progress, but we’re not there yet,” he said.

Olsen said the week ending February 26 was the first time in two years that were more people moving from a Jobseeker benefit into work than vice versa. “We haven't seen that repeated since then but it highlighted that people are getting back into jobs and the labour market is strengthening.”

Economist Shamubeel Eaqub said seasonal patterns meant the number of benefits should have fallen by 27,584.

“The underlying rate, excluding seasonal effects, rose by 4016. The caution here is that seasonal patterns may be affected by the extreme volatility of Covid.

“The interpretation should be, in my opinion, that there was big surge in the job losses and hardship when Covid hit. Things are still tough, but the rate of increase in benefit number (particularly Jobseeker) has slowed. There is more work to be done to help people into stable jobs or training over the coming months.”

Sepuloni said the statistics for the next quarter would provide a more complete insight.

“But indications are positive. This positivity is reflected in the latest jobs online data which shows vacancies increased 73.7 per cent compared to a year earlier.

“While these figures are encouraging we cannot rest on our laurels. MSD will continue to prioritise linking Jobseekers into work and supporting businesses who are looking for new staff.”

Trade Me data on Thursday showed the number of job listings on the site increased by 22 per cent in the first three months of 2021 when compared with the same period in 2020.

In February, Stats NZ reported a surprise fall in unemployment to 4.9 per cent.