ISSUE #4: Unemployment
KPI: Adults (18-64) on a Main Benefit
Source: Ministry of Social Development
AKA: employment, jobs
Key notes
- The official unemployment rate contains multiple flaws that result in it undercounting the true levels, so should NOT be used as the definitive rate of unemployment. We have included it for i) comparison to the Jobseeker Support rate to show the stark contrast and ii) since it remains the lead measure for most politicians, economists, and media. Those flaws include:
- If you’re on a benefit and able to work, but not actively looking, then you don’t meet the criteria to be classified as unemployed. This is contrary to the layman view.
- Someone actively looking, but not available for the next 4 weeks is also not considered unemployed.
- "To be counted as 'employed' a person need only be working one or more hours a week", and that can include unpaid work. So, if you work for just 1 hour mowing a friend's lawn, for free, then you are rounded up and considered 100% employed, not 2.5% employed (1/40 hours) and 97.5% unemployed (39/40 hours) for a more accurate representation. There is no weighting, only a binary classification of either 'employed' or 'unemployed'.
- 30 hours is used to determine a full working week, not the standard 40 hours. Again, we believe this should be pro-rated where 30 hours = 75% employed and 25% either unemployed if you're on a benefit and want a full 40 hours, or underutilised if you're not on a benefit and don't want 40 hours.
- As of June 2025,12.5% of Kiwi adults (18-64) were claiming a main benefit, while the official employment was was just 5.2%. While some part time workers can also receive a benefit, a significant number of unemployed Kiwis also don't claim a benefit as they don't qualify. As such, it's hard to believe the true unemployment rate is just 5% when 12.5% are on main benefits, and there are others who are unemployed and don't get a benefit at all.
- As you can see from the graph, the unemployment rate had always tracked higher than the Jobseeker Support rate from 2008 as we'd expect, until 2018 when the numbers reversed and the number on Jobseeker benefits far exceeded those officially unemployed. This further eroded confidence in the official unemployment rate.
- The seasonality spikes around summer are in large part due to students finishing their secondary or tertiary study years who then move onto a main benefit, and sometimes, unemployment.
