So, are we being misled by statistics boasting low unemployment rates?



Bill Rosenberg, economist at the Council of Trade Unions, says when people read headlines saying New Zealand has a 4.8 percent unemployment rate, they are not getting the full picture.

"When [people] look at that figure, they get a false sense of wellbeing. Actually, there's a lot more people out there who are still wanting work."

He said he's never been particularly happy with the exclusion of people who have stopped looking for work.

"It's a fairly brutal definition, really. It's what's used internationally, but it really doesn't take into account the nature of the jobs that are out there and the difficulties people can have in finding those jobs."

"There are a lot of people who are not getting what they need from employment," he said, be it enough hours or enough pay.

The same measure of unemployment is used in the United Kingdom, where the statistic was labelled a 'lie' by the editor of Business Insider Jim Edwards last week.

"The statistical definition of 'unemployment' relies on a fiction that economists tell themselves about the nature of work," he wrote.

He argues people voted for Jeremy Corbyn's Labour Party and Brexit because despite what seems like a record low unemployment rate, "people still feel poor, their wages are not rising, and one in seven workers is out of work".

Statistics NZ documents explicitly state the unemployment rate should not be considered a sole measure of the state of the labour market. They are using a standard unemployment measure that allows the rate to be compared across time and across the world.

As ANZ economist Nick Tuffey explains, the unemployment rate measures "people who are making a defined amount of effort to [look for work] so they have to have done more than just read a job ad".

"The emphasis is on actively seeking work, rather than a more passive approach," he says.

Statistics NZ acknowledges criticism of the unemployment rate measurement, including its failure to "fit with common perceptions of 'lack of work'" and for that reason, releases a somewhat clinically-named measure called 'underutilisation rates'. This is the number of people who are working less than 30 hours a week but want more work, combined with the number of people who are unemployed - including the disheartened - those who are not working and haven't applied for anything in the past month.



At 11.8 percent, New Zealand's underutilisation rate is more than double the unemployment rate. And it's much worse for women, who are 'underutilised' - underemployed or jobless - at a rate of 14.5 percent, compared to 9.4 percent for men.

When contacted for comment, Minister of Tertiary Education, Skills and Employment Paul Goldsmith said "the Government has confidence that the Household Labour Force Survey provides a comprehensive picture of the labour market."



Newshub.