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  • rmacculloch

No, Minister: Not a valid comparison.

Stuff News reports that Finance Minister [Grant Robertson] said today that the unemployment "peak" of 7.8 per cent in New Zealand compared well to “an expected peak of 10 per cent in Australia, while countries like the US and Canada have already recorded unemployment peaks above 13 per cent”.


But the US and NZ figures are not comparable - the US numbers include temporary layoff unemployment, which is where workers expect to return to their firm within a short period and maintain their connection with their employer (which includes "furloughed" workers during the virus lock-downs). Back in May, when the US was reporting a double digit unemployment rate, 78% of workers reported that their layoff was temporary.


In NZ most of those types were classified as being employed since they were on the wage subsidy scheme, even though many were not necessarily working at all.


For sources, see:


https://www.stuff.co.nz/national/politics/300107870/election-2020-rivers-of-red-as-government-warns-to-brace-for-longhaul-economic-shock



https://www.cnbc.com/2020/05/08/78percent-of-workers-say-their-layoff-is-temporary.html