Tuesday, 21 August 2018

A little light on a mystery

There's been something quite odd happening for quite a while. Employers are saying they are having a lot of difficulty finding staff, as this graph from the latest Monetary Policy Statement shows.

But at the same time there are large numbers of people telling the Household Labour Force Survey (HLFS) that they are currently part-timers but are available, and want, to work more hours. So how can we have employers tearing their hair out that they can't get people, and yet a whole bunch of people are saying "Pick me! Pick me!"?

Quite apart from being a mystery that it would be nice to unpick, it's also a reasonably important macroeconomic issue. If there really is a reserve army of people ready to take up jobs, or at the very least more hours in their current jobs, then the labour market mightn't really be as strong as it looks. Big wage increases wouldn't look terribly likely either if there are lots of people standing ready to take jobs at the current prevailing rates of pay. Conversely, if this reserve army isn't really there, then maybe employers' concerns are the thing to watch as an indicator of likely pay increases down the track, as employers bid against each other for the limited staff availability.

The regular HLFS tables don't shed a lot on these 'underemployed' people. We know from Table 12 of the HLFS that they are disproportionately women: of the 117,000 (seasonally adjusted) who were recorded as 'underemployed' in June, two-thirds (78,000) were female, compared to the roughly 50:50 male:female split of employment. And we know from Table 13 that of the 112,800 underemployed (not seasonally adjusted this time) in June, some 48,000 of them are not 'actively seeking' work.

That might suggest that they're not, actually, awfully interested in taking on full-time jobs, and maybe the employers' view is more descriptive of reality. But I'm not sure about that. I don't think it's the right thing to do, in these days of online job ads, to say that someone is not actively seeking work if all they've done is read the ads. But that's how Stats views things: you have to do more than scan Seek (or wherever) to be counted as 'actively seeking'. Not how I see today's world, but there we go.

Other than those little nuggets, though,we know nothing from the headline HLFS about these underemployed folk. So I asked Stats if they could break out the underemployed by industry or by occupation. And the ever-helpful people at Stats came up with the goods. Here are the answers. Stats would like me to say "Source: Statistics New Zealand, customised report and licensed by Statistics NZ for re-use under the Creative Commons Attribution 3.0 New Zealand licence", so there it is.

I'd love to say, Aha! Solved it! But the data, interesting and useful though they are, don't crack the puzzle.

You'd wonder, for example, when the housebuilding industry is desperate for anyone who can carry a hod, how 21,400 labourers say they can't get as many hours as they'd like.  That kinda points in the "yes, there's slack available" direction.

On the other hand the highish number of underemployed represented by retail trade and accommodation points another way. No matter how strongly business picks up at the motel, the motelier is very likely not going to add another full-time person: more likely, it'll be another person to do the 8.00am to 2.00pm shift to clean up the 10 extra units being occupied. The economy can pick up all it wants and won't make a blind bit of difference to motel cleaner-uppers (or peak-time sales assistants) who'd like longer hours.

And then you start asking yourself, why don't the motel and shop people move to other lines of business where there might well be a full week's work on offer? Is it because they have low level skills that aren't in demand? Unlikely, since demand for unskilled and low skilled staff is actually stronger than it is for skilled or highly skilled, as MBIE's latest online vacancies survey shows. Plus you look at the 7,400 managers (who you'd think have transferable generic skills) and the 17,000 professionals (a fair proportion ditto, you'd guess), and wonder why they don't move.

Still at least as many questions as answers, I'm afraid, but at least we've now got more data to be ignorant about.

You're welcome.

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