This journalist/commentator gets it 100% right...

...so why can't other journalists/commentators?

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On Saturday morning (16 May), RNZ’s Mihingarangi Forbes spoke with Business Editor at Large for the New Zealand Herald, Liam Dann.

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It was a mildly interesting chat which touched on various economic issues and problems. Mentioned were housing prices in Australia (rising) compared to housing prices in Aotearoa New Zealand (steady, or falling). Very little mention as to the causes, including 62,717 New Zealand citizens departing long-term for the year ending February 2026. (There were an estimated 25,173 people net gain for the country, but that simply speaks to a “high churn” of arrivals/departures and not to stability. There is no telling how long those arrivals intend to stay, or leave, and subsequently appear to have little or no impact on housing purchases/prices.)

However, at one point Dann did mention something of importance:

@7:06, he said:

“…and of course, yeah, if those people, if they work one hour, they don’t count as unemployed, they count as under-employed if they want more work…”

It has been a long-standing bugbear of mine since I started blogging on labour-employment-unemployment issues: Statistics NZ’s definition of unemployment is so wildly unrealistic that it makes a mockery of unemployment statistics.

It may surprise people that Liam Dann is spot on. If you work ONE HOUR per week, paid or unpaid, you are officially moved from being unemployed, to being employed. You may well be under-employed, but that is an issue rarely addressed by politicians or media.

To be precise, this is Stats NZ’s definition page:

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Description

People in the working-age population who, during the reference week, did one of the following:

• worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment

• worked without pay for one hour or more in work which contributed directly to the operation of a farm, business, or professional practice owned or operated by a relative

• had a job but were not at work due to own illness or injury, personal or family responsibilities, bad weather or mechanical breakdown, direct involvement in an industrial dispute, or leave or holiday.

The first two paragraphs are salient. If you work for ONE HOUR FOR AN EMPLOYER, or worked WITHOUT PAY FOR ONE HOUR FOR A RELATIVE, you are officially added to the Employed numbers and Unemployment numbers drop accordingly.

This make our unemployment statistics wholly meaningless.

The stark reality is that Unemployment rates in this country are most likely much higher than official statistics show. (Which no doubt makes politicians deliriously happy.)

The current Unemployment rate is 5.3% - officially.

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But the Under-utilisation Rate is a whopping 12.9% - two and a half times the official unemployment rate:

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This suggests that the true Unemployment Rate sits somewhere between 5.3% and 12.9%. The average of the two figures is 9.1%.

Congratulations to Liam Dann for being one of the few business/economy journalists or commentators to refer to this misleading statistic. It’s a shame he didn’t delve further into it.

But it raises questions as to why others in the media also fail to raise this critical distinction. It may suit politicians - but it leaves the public badly misinformed.

Is it laziness? Is it lack of knowledge on the subject? Or perhaps media commentators want to keep the narrative misleadingly simple, because, well… too much hard work?

It would be like a History teacher bringing up World War II and explaining it thusly, in just three sentences:

“World War II started in 1939 and finished in 1945. All the super powers were involved. People died.

Lesson completed. Now let’s get onto the next subject.”

How much would that tell those students? Nothing.

So why do it with Employment stats?

Even Stats NZ advises us;

The underutilisation rate is equally as important as the unemployment rate. It gives a broader measure of untapped capacity in the labour market.

At least Under-employment/Under-utilisation is now being openly counted by Statistics NZ. The change happened in March/April 2013 - perhaps after questions were raised about how Employed/Unemployed stats were omitting to consider those in a ‘grey zone’ between being fully employed or fully unemployed.

In the ‘Gig Economy’ of the 21st Century, this is a substantial number of people that cannot be ignored (as much as politicians might want to, for obvious reasons).

As a side note, Stats NZ used to label the employed definition as “Description”. From a 2017 website page":

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Currently, it’s referred to as a “Concept”:

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References

RNZ: Saturday

Interest.co.nz: Fewer New Zealand citizens are leaving long-term and more are returning after an extended absence

Stats NZ: Concept Name Employed

Stats NZ: Unemployment rate

Stats NZ: Under-utilisation Rate

Stats NZ: Introducing new measures of underemployment

Previous related blogposts

2016 – Ongoing jobless tally and why unemployment statistics will no longer be used (November 2016)

The Labour interns – ACT exposes hypocrisy! (July 2017)

MSM catches up on Unemployment stats rort (August 2017)

The “free” market can’t even build a bloody hotel?! (March 2018)

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Acknowledgement: Sharon Murdoch

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Have your own thoughts? Leave a comment. (Trolls and conspiracists need not bother.)

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