National exploits fudged Statistics NZ unemployment figures
On 3 July, this blogger reported how Statistics NZ had radically changed the manner in which it defined a jobseeker;
“Change: Looking at job advertisements on the internet is correctly classified as not actively seeking work. This change brings the classification in line with international standards and will make international comparability possible.
Improvement: Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.”
Statistics NZ explained the ramifications of the “revised” definition of unemployment ;
Decreases in the number of people unemployed and the unemployment rate
Changes to the seasonally adjusted unemployment rate range from 0.1 to 0.6 percentage points. In the most recent published quarter (March 2016), the unemployment rate is revised down from 5.7 percent to 5.2 percent
Increases in the number of people not in the labour force
Decreases in the size of the labour force and the labour force participation rate
A person job-searching using the internet was “not actively seeking work“. Predictably, at the stroke of a pen, unemployment “fell” over-night from 5.7% to 5.2%.
It was “manna from heaven” for the incumbent government which has been besieged on several fronts for worsening social and economic indicators.
Despite being little more than a dressed-up “accounting trick”, politicians could claim with a straight-face that “unemployment was falling”.
Which did not take long.
Statistics NZ announced it’s changes on 29 June 2016.
Four days later, our esteemed Dear Leader, John Key, gloated on TVNZ’s Q+A to Corin Dann;
“The unemployment rate in New Zealand is now falling pretty dramatically.”
Of course unemployment was falling “pretty dramatically”. Government statisticians were ‘cooking’ the numbers.
By August, both Key and Bill English were joyfully quoting the “new unemployment stats”.
On 8 August, Key was quoted on Interest.co.nz;
“On the other side, we need these people in an environment where unemployment is 5.2% and where growth is still very, very strong. You’ve just got to be careful when you play around with these things that you don’t hamstring certain industries that need these workers.”
So not only was Key quoting the”new, revised” unemployment stats – but his government was now actively predicating their immigration policy on the bogus data.
Three days later, in Parliament, English also gleefully congratulated himself on the “fall” in unemployment;
“The Reserve Bank is forecasting an increase of about 1 percent more growth in the economy over the next 3 years, compared with what it thought 3 months ago. It is forecasting that unemployment is going to continue falling from 5.2 percent this year to 4.5 percent by 2019 and that job numbers will increase by more than 2 percent on average over the next 2 years. A significant component of that, of course, will be the construction boom, where thousands of houses will be built over the next 2 or 3 years. These forecasts are in line with Treasury’s forecast for the labour market and show an economy that is delivering more jobs, lower unemployment, and real increases in incomes when in many developed countries that is not happening.”
Whilst it is expected for politicians to mis-use questionable data for their own self-aggrandisement (and re-election chances), worse was to come.
On 10 August, Radio NZ‘s
“The unemployment rate stood at 5.2 percent for the three months ended in March.”
Bonnett did not
It is unfortunate that some journalists seem unaware of the new ‘regime’ which portrays unemployment lower than it actually is. The fact that Statistics NZ has ‘fudged’ their data which now skews unemployment should be common knowledge throughout the mainstream media.
Especially when government ministers are now “patting themselves on the back” for a “fall” in unemployment that never happened.
The new unemployment figures are not factual. They are a fiction.
Journalists need to know the difference.
Addendum1 – a letter to the public
from: Frank Macskasy <email@example.com>
to: Listener <firstname.lastname@example.org>
date: Sun, Aug 14, 2016
subject: Letter to the editor
On 29 June, Statistics NZ announced that it would be “revising” the definition of unemployment. It stated that “looking at job advertisements on the internet is … not actively seeking work”.
The consequence, as Statistics NZ pointed out, would be a “decrease in the number of people unemployed and the unemployment rate”. Accordingly, SNZ revised down the March Quarter unemployment rate from 5.7% to 5.2%.
It did not take long for politicians to realise and exploit the benefits of this revision. On August 8, our esteemed Prime Minister cited the “fall” in unemployment;
“On the other side, we need these people in an environment where unemployment is 5.2% and where growth is still very, very strong…”
Three days later, Bill English also referenced the new figure;
“The Reserve Bank… is forecasting that unemployment is going to continue falling from 5.2 percent this year to 4.5 percent by 2019…”
Even Radio NZ’s Gill Bonnett quoted the “revised” figure in a story on 10 August;
“The unemployment rate stood at 5.2 percent for the three months ended in March.”
The irony is that whilst Statistics NZ plays with phantom numbers to suit itself, the unemployed do not find their circumstances improved one iota.
Changing the numbers does not change people’s real lives.
[address & phone number supplied]
Addendum2 – Statistics NZ’s other Dodgy Definitions
According to Statistics NZ, you are deemed to be employed if you;
- 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
How many people are deemed to be “employed” by Statistics NZ, even though they may be working one hour per week, with or without pay?
Statistics NZ’s employment/unemployment figures are utterly unreliable.
At best, they show the minimum number of unemployed in this country and most likely do not reflect reality.
As this blogger reported back on 12 February 2014;
A Roy Morgan poll has un-employment in New Zealand steady at 8.5%, with a further 11.3% under-employed. Collectively, 19.8% of the workforce (519,000, up 69,000) were either unemployed or under-employed. For the December Quarter 2013, according to Roy Morgan:
Roy Morgan’s polling to determine New Zealand’s unemployment rate yielded a figure 2.3 percentage-points higher than Statistics NZ’s Household Labour Force Survey.
Roy Morgan’s polling for the previous December Quarter for 2012 yielded a similar story. Polling revealed a staggering 9.4% unemployed, with a further 11.6% under-employed. By contrast, Statistics NZ’s figures for the December 2012 Quarter was 6.9% – 2.5 percentage points lower than Roy Morgan’s.
Curiously, Statistics NZ reports – but does not appear to analyse or question – their own conflicting data;
- The number of people employed decreased by 23,000 (down 1.0 percent).
- The labour force participation rate fell 1.2 percentage points, to 67.2 percent.
- The number of people in the labour force decreased by 33,000.
So despite the unemployment rate for the December 2012 Quarter apparently falling “0.4 percentage points, to 6.9 percent” – the actual number of people in work did not increase – it also fell.
There appears to be a solid disconnect between Statistics NZ’s own figures.
Considering the dodgy definitions being used by Statistics NZ, Roy Morgan may prove to be closer to reality than we realise.
Clearly our real unemployment rate is being masked by unrealistic definitions.
Scoop media: Parliament – Questions & Answers – 11 August 2016
Statistics NZ: Household Labour Force Survey
Statistics NZ: 2013 Census QuickStats about national highlights
Statistics NZ: Household Labour Force Survey – December 2012 quarter
Statistics NZ: Household Labour Force Survey – September 2013 quarter
Previous related blogposts
This blogpost was first published on The Daily Blog on 15 August 2016.
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