Geoff Bascand: Making sense of job statistics

Photo / Christine Cornege

Opinion

A recent comment from a reader on the New Zealand Herald website read: "According to the Household Labour Force Survey, if you worked more than one hour - with or without pay - you count as being employed. You have to be an idiot to call that employment, yet the Government manages to do just that."

As the Government Statistician, I am responsible for ensuring our official statistics tell the truth about New Zealand and support public understanding and decision-making. One of my most important tasks is to define what we are trying to measure, and for what purpose. Typically, a statistic is good for one purpose but less so for another, and we therefore need multiple measures to complete the picture.

Statistics NZ completes the Household Labour Force Survey (HLFS) to international standards. It is by far the best and most comprehensive measure of employment and unemployment. We survey 30,000 New Zealanders every quarter.

People might question whether one hour's work a week means that somebody is employed, but a line in the sand must be drawn, and in this case we draw it in a place that enables us to benchmark our unemployment and employment against other countries.

We supplement this measure with others, such as jobless statistics, which include counts of people looking for work but not available, or available but not looking.

We also ask people about under-employment - whether they would like to work more hours than they can find. That's how we address whether they are happy working only one or two hours a week, or whether they want more.

Our most recent estimate put the unemployment rate at 6.8 per cent in the three months until June this year, with 162,000 unemployed. That gave New Zealand the 14th-lowest unemployment rate among the 34 OECD countries that produce this statistic. The HLFS is the best, and only, measure we can use to make this comparison.

There's been heated debate over the number of new jobs in the economy. According to our Linked Employer-Employee Data (LEED), there were 13,050 fewer jobs at June 2011 than there were in March 2008. But there's also been a figure quoted that according to the HLFS, there were around 57,000 more people employed in June 2012 than there were in June 2010. Which one of these is right? Are there more or fewer jobs?

The first thing I'd note is that these figures cover different time periods and one is measuring people employed (the number of people who have jobs) while the other is measuring the number of jobs. They're both right in that they both help to analyse what's happening. We have multiple labour market measures because they tell us different things. This can appear confusing, but when used together, they provide a strong evidence-based picture of the inner workings of the country's labour market.

If the question is "how many people are employed or unemployed", then the HLFS provides the answer. If information about the number of jobs people have (they might have one, two, three or more) or the churn of people starting and finishing jobs is required, then LEED will provide that. HLFS provides the helicopter view of the labour market, whereas LEED puts the information under the microscope.

The final piece of the labour market jigsaw comes from the Quarterly Employment Survey (QES). This measures jobs rather than people, but enable us to estimate the quantity of labour that firms are using, average hours of work, and average earnings. All of this is incredibly useful for government decision-makers when it comes to things like setting New Zealand Superannuation and the minimum wage. Though I stress that these measures are different, over a long time period they track very similarly, confirming they're all very robust and reliable measures of the labour market.

At Statistics NZ, we are striving to make sure New Zealand gets the information it needs to grow. All of our own labour market statistics contribute to this, as do others from the wider Official Statistics System, like the Ministry of Business, Innovation and Employment's job vacancies, and the Ministry of Social Development's welfare figures. Indeed, we use tax data to calculate our LEED measures. It's fantastic that we can reuse information collected for one purpose and extract more value out of it. There's more information available on our website.

I would encourage people to see these statistics in the context of a multi-faceted and ever-changing labour market, and accept - as I do - that while they're all great statistics, they're not all the same and neither should they be.

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Geoff Bascand is the Government Statistician, Statistics New Zealand.