The Implications of a Recession for the Māori Economy

Māori Employment

Summary: For the September 2008 quarter, of the 229,300 Māori in the labour force, 7.9 percent (or 18,100) were unemployed, an increase of 0.9% from the previous quarter. Māori are over-represented in the export-focused industries (agriculture, forestry, fishing, and manufacturing) and in lower skilled occupations.

Background

  1. For the September 2008 quarter, the Māori working age population (i.e. Māori aged 15 years and over) was estimated to be 340,200:
    • 67.4 percent of the working age population were in the labour force;11
    • 92.1 percent of Māori in the labour force were employed and 7.9 percent were unemployed.12
  2. Māori are over-represented in the export-focused industries (agriculture, forestry, fishing, and manufacturing) but the proportion of all Māori employed in these industries has fallen from 29.1% to 23.3% from 2002 to 2008. Māori employment growth has been strongest in construction over the past five years. The percentage of all Māori employed in construction has risen from 6.5% in June 2002 to 9.8% by June 2008.13
  3. Māori remain over-represented in the lower skilled occupations and under-represented in the higher skilled occupations. Over the past five years most of the increase in Māori employment has been in the two medium skilled categories, the skilled and semi-skilled occupation groups, which cover a large cluster of occupations such as technicians, trades, and sales and service workers.14

 

11 Household Labour Force Survey, Statistics New Zealand 2008
12 Ibid.
13 Ibid.
14 Ibid.

Risks

  1. Historically, recessions have had a disproportionately negative impact on Māori compared to non-Māori. The Treasury (2005) makes the point that:

    “…in the economic restructuring of the late 1980s and early 1990s…Maori were adversely affected to a greater extent because of where they were concentrated in the labour market and industry sectors (for example, in the manufacturing sector and in low-skilled occupations)…”15
  2. This is still largely the case today. Although, there has been some shift by Māori towards sustainable, higher-paid forms of employment, a relatively high share remains employed in lower-skilled, lesser paid occupations. Similarly, Māori still remain over-represented in manufacturing as well as in other export-oriented industries which are more susceptible to global fluctuations in demand and commodity prices. This also includes those in retail and services that may be exposed to reductions in tourisms spending arising from international conditions.
  3. Given the current Māori employment profile it is expected that Māori will be disproportionately negatively impacted by the recession as compared to non-Māori. Te Puni Kōkiri considers that a likely scenario is for a rise in Māori unemployment to 12-15% by mid 2010.16

 

15 Whitehead, J. and B. Annesley (2005) The Context for Māori Economic Development: A background paper for the 2005 Hui Taumata, New Zealand Treasury.

16 This forecast is based on a Treasury forecast of a rise in general unemployment to 5.7% over the next two years with an assumption that Māori unemployment will continue to be at least double the general rate. There are also initial signs of an economic slowdown in construction, tourism and primary industries. Māori are strongly represented in each of these sectors.

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