The Evolving Work Environment in New Zealand: Implications for Occupational Health and Safety - NOHSAC Technical Report 10
3. Key Trends in Work and the Workforce in New Zealand
This chapter looks at the key trends in New Zealand’s workforce over the past 15 years. This sets the scene for understanding emerging issues in work in later chapters. The chapter ends by reviewing existing international academic and policy literature to establish the key emerging risks and existing policies to manage them.
The workforce in New Zealand has been undergoing significant growth and many substantial interrelated changes in the last few decades. The Employment Contracts Act 1991 has had a significant impact on the working arrangements of New Zealanders. Permanent employment has become less common, as temporary and casual work becomes more prominent.
As with the experience of several other western (and many developing) economies, the growing labour demand has placed increasing pressure on the existing labour supply. This has encouraged employers to tap new sources of labour. Currently, there are about 3.3 million working-age people in New Zealand of which 2.3 million are in the labour force, either engaged in paid work of looking for work. Figure 3.1 shows the breakdown of the working-age population in New Zealand.
FIGURE 3.1 Labour market for the year to December 2007
Figure 3.2 shows the extraordinary growth that the New Zealand labour force has undergone in the last 15 years. The number of people employed in New Zealand grew by nearly half a million between 1991 and 2005 – a growth of 29 per cent. In comparison, between 1991 and 2006, the New Zealand working-age population experienced a growth of only 22 per cent. The strong rate of growth of employment has outpaced population growth despite strong immigration and an increase in the overall participation rate of the working-age population. Increases in both employment and the participation rate have also resulted in rapid growth in demand for labour and skills in the New Zealand labour market, resulting in record high skill and labour shortages.
FIGURE 3.2 Employed labour force in New Zealand, 1991–2006
The strong growth in labour demand over the last half decade has resulted in more people being drawn into the labour force in both full-time and part-time forms of employment (see Figures 3.3 and 3.4). We are not only seeing an increase in earlier trends in labour force participation (such as the continuing growth in labour force participation of women), but a redrawing of traditional boundaries of the labour market (especially the strong growth of older workers in the paid workforce). Analysis of the Linked Employer-Employee Data (LEED) indicates that the growth in the labour force participation rate is coming primarily from people who were absent from the New Zealand tax system, rather than people moving from being on benefits into the labour force. They attribute this to four groups: young people transitioning into the labour market, older people coming out of retirement, people returning to the labour force after child rearing and people migrating into New Zealand.
FIGURE 3.3 People employed full-time, 1991–2006
FIGURE 3.4 People employed part-time, 1991–2006
Figure 3.5 represents the growth in labour demand, which has seen unemployment fall to an historical low (as of August 2007, when unemployment was at an unprecedented 3.6 per cent). Quite apart from any other changes in the world of work (and, as the remainder of the report shows, there are many), this historic growth in labour demand and participation rates and the decline in unemployment is an extraordinary development, with implications for future supplies of productive labour and, importantly, for OHS regulation and policy.
FIGURE 3.5 Rate of unemployment in New Zealand, 1992–2007
New Zealand has also been experiencing important changes in demographic and social patterns, and many of these changes have flowed through to altering the age, gender and ethnic structure of the workforce. These will be discussed in more detail in Chapter 4.