Question 11: How many people became unemployed in the 87-93 recession? Who did it affect most severely?

8 Aug

Official unemployment rates went from less than 4% in 1987 to a peak of 11% in 1993. For Maori and Pacific people official unemployment rates hit 25-30 percent. The numbers forced onto benefits more than doubled.

Nearly every working family was affected in some way. Economist Brian Easton calculated that “In the three and three quarter years from 1988, the equivalent of 43% of the labour force registered with the Department of Labour as unemployed (multiple registrations not included).” Clearly there wasn’t a sudden explosion of some mass laziness psychosis that made us all quit our jobs and go on the dole. We had been hit by an economic hurricane imposed on us by a big business elite that controlled both major political parties.

The number of people forced onto benefits exploded in the early 1990s from around 140,000 on all forms of means tested benefits (unemployed, sole parent, Invalids & sickness) in 1985 to 340,000 by the mid 90s (about 13% of the working age population from 16-64). Total numbers remained high until peaking in absolute terms in 1999 with 370,000 on these benefits. Numbers dropped to 260,000 by the end of the 2000s (or 8% of the working age population) with the modest economic recovery. Today the numbers are climbing again as the recession kicks in. At the end of 2009 there were over 315,000 on these benefits – 66,000 on the unemployment benefit, 109,000 on the DBP and 140,000 on either the Sickness or Invalid benefits (9.5% of the working age population).

The extreme policing of access to the unemployment benefit by WINZ in recent years was designed to make the figures look good for the government. The number receiving it dropped to below 20,000 in March 2008. At the same time, according to the Household Labour Force Survey there were a total of 96,000 unemployed.

It is not surprising that during a period when numbers on the unemployment benefit were falling much faster than measured unemployment, the numbers on Sickness and Invalid benefits continued to rise significantly. Among the main drivers of these latter benefits has been the raising of the age for national superannuation, the elimination of the transitional retirement benefit that had been available to older workers from 1994 to 2003, ACC using any pretext to remove anyone from their responsibility (and on to benefits) if they could, and the casualised work environment that has intensified work to the point that few can survive if they have any disability. I have personally witnessed major hotels driving elderly cleaners with years of service out of work because they couldn’t keep up with the growing targets they were required to meet.

The official unemployment figure is itself is a conservative measure. You are only counted as unemployed if in the survey period you didn’t work at all – not even one hour, unpaid, in your parents’ dairy. You are not counted as unemployed if you are too ill, in training, or had done no more than look in the newspapers for work during the previous month.

There is a broader measure of unemployment called the “Jobless” that is a more accurate measure of actual unemployment in society. This counts the workers who have given up looking for a job, those not working but who hadn’t “actively” sought work, and those who are working part time but want more hours. At the end of 2009 this number was over 276,000 or 12% of the workforce. The Jobless number is usually nearly twice the official unemployment figure.

(Part of a series of extracts from “Exposing Right Wing Lies” by Mike Treen, Unite National Director)


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