Employment and income of Pacific peoples in New Zealand - article

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Key Statistics - article, December 2002, p. 9-14

Key information on the economic status of Pacific peoples in New Zealand. Recent years have seen positive trends among Pacific peoples including lower rates of unemployment; trends away from traditional bluecollar jobs in secondary industries and increasing representation in white-collar jobs in the growing service industries; greater levels of selfemployment; and increasing levels of real personal and household incomes.
 

Employment and income of Pacific Peoples in New Zealand¹

Introduction

A recent analytical report produced by Statistics New Zealand and the Ministry of Pacific Island Affairs, Pacific Progress, provided key information on the economic status of Pacific peoples in New Zealand. This article summarises the work, occupation and industry, and income chapters of that report.
 

Work 

The period since the mid-1980s has seen considerable change and upheaval in the labour force, which has had major consequences for employment patterns among Pacific peoples. Pacific workers were hard hit by economic restructuring and job losses in the 1980s and early 1990s, resulting in falling rates of labour force participation and employment, and sharp increases in unemployment. These trends have since reversed to some extent as economic conditions have stabilised, and new employment opportunities have emerged. However, while Pacific peoples’ labour force participation and employment rates have increased slightly and unemployment has fallen, they have not returned to the earlier levels. There are still disparities between rates in the Pacific population and the national population.
 

As figure 1 shows, Pacific peoples’ labour force participation rate fell from 70 percent to 59 percent between 1987 and 1996 when many jobs were lost in secondary industries and lower skilled manual occupations. It has since recovered slightly, peaking at 63 percent in 1998 before falling again slightly to 61 percent, but remains below the national rate of 66 percent in 2001.
 

The young age structure of the Pacific population influences their overall participation rates, as young people tend to have low rates of participation. However, Pacific peoples’ labour force participation rate is lower than that of the total population at all ages and for both sexes. The difference is smallest at the ages of 20–24 and greatest at the ages approaching retirement. In the 60–64 age group, participation rates were 45 percent for Pacific males and 29 percent for Pacific females, compared with 65 percent for all males and 42 percent for all females.
 

Pacific people who were born in New Zealand have higher rates of labour force participation than overseas-born Pacific people of similar ages. Overall, New Zealand-born males had a participation rate of 74 percent compared with 70 percent for overseas-born males, while New Zealand-born females had a participation rate of 66 percent compared with 55 percent for overseas-born females.
 

Figure 1 

The labour force participation rates include people who are unemployed and actively seeking work, and therefore conceal some of the effects of the job losses of the 1980s and early 1990s. Looking only at the proportion of the Pacific adult population in paid employment, this fell from 62 percent to 43 percent between 1986 and 1991. It subsequently recovered to 55 percent in 2001 but remains lower than the national rate of 62 percent. Employment rates for Pacific males are still below those of 1986 but Pacific women’s rates are now similar to, and at some ages higher than, those of 1986.
 

The effects of the economic reversals of the 1980s are clearly illustrated in the unemployment rates shown in figure 2, with Pacific unemployment increasing from 6.1 percent in 1987 to a peak of 28.8 percent in 1992. It has since fallen to 11.2 percent, but this is nearly twice as high as the total unemployment rate of 5.7 percent.
 

Unemployment is particularly high among young Pacific people at 36.7 percent for 15–19 year olds and 21.5 percent for 20–24 year olds in 2001. It is also higher for those born overseas when compared with New Zealand-born Pacific people of a similar age. However, unemployment rates for the overseas-born decline markedly the longer people have been living in New Zealand. Education also has a clear effect, with 20 percent of Pacific people without formal qualifications being unemployed in 2001, compared with 7.4 percent of those with university degrees, although this is higher than the national rate for people with degrees (4.1 percent).
 

Occupation and industry

Historically, Pacific people have not been evenly distributed throughout the New Zealand labour force, but have tended to be over-represented in less skilled manual jobs in secondary industries, and under-represented in the more skilled and higher status white-collar jobs in service industries, particularly in professional and managerial occupations. However, more recently, there has been some social mobility among the Pacific population as younger Pacific people have acquired more qualifications and skills. Increasing numbers have moved into white-collar jobs in service industries or have started their own businesses. Despite this, there are continuing disparities between the occupational and industrial distribution of the Pacific and total populations.
 

In 2001, the largest occupational categories for Pacific males were plant and machine operators and assemblers (25 percent) and elementary occupations (15 percent), while the most common categories for Pacific females were clerical (24 percent), and service and sales occupations (23 percent).
 

As figures 3 and 4 show, the proportion of Pacific workers employed in elementary occupations and as plant and machine operators and assemblers has been declining over recent censuses, while the proportion in the more highly skilled white-collar occupations has increased. By 2001, 18 percent of Pacific males and 27 percent of Pacific females were employed as legislators, administrators and managers; professionals; or technicians and associate professionals. However, these figures are still markedly lower than those for the total labour force, with 38 percent of all men and 42 percent of all women being employed in these categories.
 

Education, age and birthplace all have a strong influence on the occupational distribution of Pacific people, with the more qualified, younger, and New Zealand-born sections of the population being more likely to have white-collar occupations. Fifty percent of Pacific people with degrees have professional occupations, while a further 11 percent have legislative, administrative and managerial occupations. Almost half of young Pacific people aged 15–24 work in service and sales or clerical occupations, with relatively few working in plant and machine operating and assembly. New Zealand-born Pacific people are also less likely than the overseas-born to work as plant and machine operators and assemblers or in elementary occupations, and more likely to be in all types of white-collar work.
 

The industrial distribution of Pacific workers is also changing, with increasing proportions working in service industries, which employ the majority of Pacific workers, and fewer working in secondary industries, as figure 5 shows. In 2001, 66 percent of Pacific people worked in service industries, compared with 57 percent a decade earlier.
 

However, while the proportion working in secondary industries is falling, Pacific people are still over-represented in this sector. In 2001, 42 percent of Pacific men and 18 percent of Pacific women worked in secondary industries, compared with 29 percent of the total male workforce and 11 percent of the total female workforce. Manufacturing remains the most common industry group for Pacific workers, employing 33 percent of men and 17 percent of women.
 

As with occupation, age and birthplace have a marked influence on the industrial distribution of Pacific workers. Younger Pacific people are less likely than older Pacific people to work in manufacturing, with relatively high proportions working in the retail trade and accommodation, cafés and restaurants. New Zealand-born Pacific people are only half as likely as the overseas born to work in manufacturing, and more likely to work in most service industries.
 

Pacific people are also more likely to run their own businesses than in the past, with increasing proportions being employers or self-employed, although the proportions are still relatively small. In 2001, 1.9 percent of Pacific people in the paid workforce employed others, while 4.4 percent were self-employed without employees. However, the proportion of Pacific employers was just one-fifth that of the national figure, while the proportion of self-employed people was just over one-third of the national figure.
 

Income³

The younger age structure of the Pacific population, coupled with the lower overall qualification levels of Pacific peoples and their higher representation in less skilled occupations is reflected in the median annual personal and annual household incomes of Pacific peoples, which are relatively low.
 

The income disparity between the Pacific and national populations increased during the recession of the early to mid-1990s, which disproportionately affected lower income groups. Although Pacific peoples have recovered some of this lost ground in recent years, differences in personal and household income still remain between the Pacific and total New Zealand populations, as figure 6 illustrates. In real terms, the median annual income of Pacific peoples aged 15 years and over increased from $13,400 in 1996 to $14,600 in 2001 (age standardised), a recovery from the low of $12,100 in 1991, yet still below the 1986 median of $17,200. In 2001, the ratio of Pacific median annual income to national median annual income was 78 percent, compared with 89 percent in 1986.
 

The Pacific population is proportionately more likely than the national population to be in the lower income bands, even after age standardisation. In 2001, 61 percent of the Pacific population received less than $20,000, compared with 53 percent of the national population. At the other end of the spectrum, 7 percent of Pacific peoples received over $40,000 in 2001, compared with 18 percent of the national population.

Pacific women have a slightly lower annual median income than women in the national population, $14,900 compared with $15,700 respectively (a ratio of 95 percent). The gap for males was much greater, $20,300 compared with $26,100 respectively (a ratio of 78 percent).
 

Place of birth was also a factor in differences in personal income. In 2001, Pacific peoples born in New Zealand had a higher median annual income ($15,600) than those born overseas ($14,400). The higher qualifications levels among the New Zealand-born Pacific population contributed to this difference.
 

Among the younger age groups, the Pacific and total New Zealand populations have similar annual median incomes. In 2001, the median annual income of Pacific peoples aged 20–24 years was equivalent to 90 percent of that of the same age group among the national population, a reflection of the relatively high labour force participation rates among young Pacific people. The gap between the Pacific and national populations widens among those aged 25–29 years (a ratio of 80 percent), and further among those aged 45–49 years (a ratio of 75 percent). As figure 7 illustrates, there is a steady increase in annual median income among the national population between the prime working ages of 25–45 years. The relatively flat increase among these age groups in the Pacific population possibly reflects the increasing mobility of young Pacific people in the labour market.
 

Between 1997 and 2001,⁴ the median hourly wage and salary earnings of Pacific peoples have remained at a constant level, relative to the national population (a ratio of 84 percent). As figure 8 illustrates, Pacific peoples’ median hourly wage and salary earnings increased from $10.50 in 1997 to $11.70 in 2001, while the median hourly wage and salary earnings of the national population also increased over the period from $12.50 to $14.00. Over two-thirds (69 percent) of Pacific peoples earning wages and salaries were receiving less than the national median of $14.00.
 

Income sources 

Wages and salaries was the most common source of income in 2001. As figure 9 shows, 47 percent of Pacific peoples and 55 percent of the national population received income from this source. Income from interest, rent or investments was less common among the Pacific population (4 percent) than the national population (25 percent), as was income from self-employment (4 percent and 16 percent respectively).
 

In 2001, 9 percent of Pacific adults received the community wage-job seeker benefit and 6 percent received the domestic purposes benefit at some stage during the previous 12 months. Among the total New Zealand population, the equivalent proportions were 6 percent and 4 percent respectively. The overseas-born Pacific population was less likely than the New Zealand born Pacific population to receive income from government sources such as the community wage-job seeker benefit (9 percent and 14 percent respectively) and the domestic purposes benefit (6 percent and 9 percent respectively). The older age structure of the overseas-born Pacific population may have contributed to these differences.
 

Conclusion 

Recent years have seen positive trends among Pacific peoples including lower rates of unemployment; trends away from traditional bluecollar jobs in secondary industries and increasing representation in white-collar jobs in the growing service industries; greater levels of selfemployment; and increasing levels of real personal and household incomes. These trends have generally been more evident among younger Pacific people and those who were born in New Zealand. Given the projected rapid growth of the Pacific population over the next two decades, the social and economic position of Pacific peoples will be of increasing significance to New Zealand.

Footnotes

¹ This article was prepared by Patrick Ongley and Gary Blick of the Social Statistics Division of Statistics New Zealand.
² Data is sourced from the Census of Population and Dwellings, unless otherwise noted.
³ Data from the Census of Population and Dwellings and the New Zealand Income Survey refers to the amount of money received before tax, while all dollar values have been adjusted to constant prices (March 2001 dollar terms).
⁴ The New Zealand Income Survey is an annual survey first conducted in 1997. Figures are not age standardised as this made little difference to the data in 2001.

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