2000 people sign up for benefit in first days of lockdown

Friday, 27 August 2021

An extra 2022 people went on to Jobseeker Support in the first days of lockdown, new Ministry of Social Development data shows.

The data showed a 1 per cent increase in the number of people receiving the benefit last Friday compared to the Friday before.

Economist Brad Olsen, of Infometrics, said the increase was attributable to the alert level change on August 17.

'We’ve seen a continued fall in Jobseeker Support figures in 2021, and rising filled jobs numbers.'

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The labour market had been very strong, leading up to lockdown.

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He said wage subsidy payments seemed to be sitting at a lower-than-expected level and larger firms were not opting for support yet.

Finance Minister Grant Robertson said that, as of Monday, only one business with more than 500 employees had applied and $484 million had been paid out.

'The rise in Jobseeker Support is something to watch, given the tight labour market,” Olsen said.

'We expect the rise is due to a knee-jerk reaction from some employers, rather than a larger trend of job losses, but it’s still the first sizeable jump in Jobseeker numbers since the summer jump at the start of the year.'

Robertson said the Government was not ruling out reviving a scheme under which people made unemployed because of Delta might qualify for Covid income relief payments of $490 a week.

But he said that while that was among the extra support being looked at, the Government did not see a need to bring back the enhanced benefit scheme, assuming its level 4 lockdown worked.

Overall, the number of seasonally adjusted filled jobs rose by 0.8 per cent between June and July.

Olsen said there was slightly slower growth in urban areas but primary sector jobs were down 2.9 per cent due to the lack of workers.

Professional and financial services, healthcare and construction all had growth of more than 6 per cent a year.

“Lockdown 2.0 looks set to make August and possibly September figures a bit weaker, limiting hiring and possibly resulting in some job losses. However, labour market tightness is expected to reappear in a month or so, given the level of spending that will come back at lower alert levels.

'The immediate and not insignificant rise in Jobseeker Support is something to watch… it could indicate a larger-than-expected hit from the lockdown to job numbers.'