In the end, it is the availability of secure jobs that determines people's economic and social wellbeing and this apparent recovery ain't generating any. As previous posts (see here and here) have noted, unemployment is not falling and labour market participation is declining. One way to assess distress in the labour maket is how long people have been unemployed. This data is available for other countries, notably the US, but not, so far as we're aware, for New Zealand. So we've had a look at the benefit data to try to get a proxy assessment of how long people have been unemployed: mostly people leave benefits when they find work so the two are closely - though not perfectly - matched.
As an aside, Spider and I are strictly amateurs when it comes to labour market economics which raises the question where are the real labour economists? Doesn't real-world research get funding, or are other-worldly problems more pressing?
But back to our story: In times of high unemployment people tend to be out of work for longer, and the longer people are unemployed the harder it is for them to re-enter the labour market. An analysis of benefit data at three different periods (December 2004, 2008 and 2012) is shown in the table below. These dates were randomly selected - you could pick any dates or more of them. What we're interested in here is to see if there is a pattern.
|Percent of beneficiaries on a benefit for <1 year, 1-4 years, and >45 years. (Figures for December quarter.)|
So what are these people doing for money? Who knows? But the longer periods people are spending on benefits, despite the enormous state and propaganda resources poured into getting them off welfare, suggests that the work is simply not there. Perhaps we need and actual job creation strategy and not the ideologically-driven deregulation agenda National has followed since coming into office. Having people fall through the social safety net can only contribute to New Zealand's infamous income inequality. Is this really what we want? Think carefully before you answer: the evidence shows high levels of soeconomic inequality mean your kids will find it easier to fall between the rungs of John Key's ladder of opportunity than to claw their way back up.