6.3 The labour market | Covid-19 Lessons Learned

Covid by the Numbers Report

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6.3. The labour market | Te kāhui kaimahi

One of the great concerns at the onset of the COVID-19 pandemic was that it would lead to high levels of unemployment, due to falling business revenues as people voluntarily avoided contact with others or were prevented from working and shopping by public health measures. This was ultimately not the case, due in part to the Government's financial support policies (discussed below in chapter 7).

6.3.1. The pandemic had a minor impact on the number of jobs | He iti noa te pānga o te mate urutā ki te maha o ngā tūranga mahi

The number of filled jobs grew consistently between 2010 and 2019 but fell slightly in the second and third quarters of 2020 (Figure 88).²⁹ Jobs grew over the next three years, reaching an all-time peak of 2.215 million in the third quarter of 2023.

Figure 88: Long-run growth in jobs in New Zealand

Total filled jobs, full-time and part time, millions, seasonally adjusted, Q1 1990 to Q2 2025

Source: Stats NZ, Quarterly Employment Survey
Notes: Total filled jobs equals the number employer-employee matches, and so will be larger than the total number of people in employment, as employees can have multiple jobs. See SNZ, Employment Indicators, at https://datainfoplus.stats.govt.nz/Item/nz.govt.stats/fe39918b-ed28-4775-bad4-eaab6bbea68f

Compared with other economic shocks New Zealand has experienced over the past 40 years, the COVID-19 pandemic did not have a major impact on overall employment (Figure 89).

Figure 89: Economic shocks and change in employment in New Zealand

Percentage change in people employed from same quarter previous year, Q1 1987 to Q2 2025

Source: Stats NZ, Household Labour Force Survey

International comparison

Historically, New Zealand has had high rates of employment as a share of its working-age population compared with other OECD countries. This continued through the pandemic (Figure 90).

Figure 90: Employment rates across the OECD

Employment as a percentage of the working age population, 2019–2021

Source: Organisation for Economic Co-operation and Development Data Explorer

6.3.2. Hours worked declined during the pandemic | I heke ngā hāora mahi i te wā o te mate urutā

Figure 82 reported results from the Business Operations Survey showing that businesses responded to COVID-19 restrictions by reducing the numbers of hours worked by their existing staff.

This can be seen at the aggregate level in Figure 91, in the context of other economic shocks.

Figure 91 shows results from the Household Labour Force Survey, covering the impact of COVID-19 and the government response on employment and hours worked. It shows an upward trend in the seasonally adjusted number of people employed (orange dashed line) and the hours they worked (green line).

The initial lockdown, which started on 26 March 2020, resulted in a large drop in actual hours worked – over 9 million hours (per week). Because of government financial support, the impact on numbers employed was small. Hours worked bounced back in the third quarter – although not completely, because of a second outbreak in Auckland in August 2020. Hours worked returned to trend levels in the last quarter of 2020. The Auckland lockdown, starting in August 2021, resulted in a drop of over 6 million hours worked.

These fluctuations in hours worked (green line) are substantially greater than those seen for the Global Financial Crisis and the Canterbury earthquakes. However, the overall impact of COVID-19 on employment was more muted than for those events.

Figure 91: Hours worked and employment in New Zealand

Weekly hours worked per week and employment, quarterly, seasonally adjusted, Q1 2000 Q1 to Q4 2024

Source: Stats NZ, Household Labour Force Survey

6.3.3. Employment by age, occupation and industry | Te whai mahi mā te pakeke, te momo mahi me te rāngai

Although overall employment growth during the pandemic was strong, employment outcomes varied depending on worker age, occupation and industry.

Employment of young workers (that is those aged 15–24) fell in 2020, possibly reflecting that this cohort was overrepresented in industries that were particularly affected by lockdowns (for example, retail trade, accommodation and hospitality). Employment of workers aged 65+ also dropped in 2020. Employment in both younger and older age groups rebounded in 2021 (Figure 92).

Figure 92: Change in employment by age group in New Zealand

Change in employment relative to same quarter previous year, by age group, Q2 2017 to Q2 2025

Source: Stats NZ, Household Labour Force Survey

The pandemic did not disrupt the distribution of occupations within the New Zealand labour market. Professionals and managers remained the two largest occupational groups. Growth in both groups continued during and after the pandemic, albeit with temporary variations (Figure 93).

Figure 93: Occupational makeup of the New Zealand workforce

Persons employed by occupational category (000s), Q1 2017 to Q2 2025

Source: Stats NZ, Household Labour Force Survey

Retail trade and accommodation is the largest-employing industry in New Zealand, with over 300,000 employees. This industry saw a big drop in employment in 2020, but this rebounded in 2021 and 2022 (Figure 94). Information media and telecommunications saw the largest proportional drop in employment.

Employment in construction grew every year between 2019 and 2022. Employment in the industries in which government is the main employer (for example, public administration and safety, health care and social assistance) also grew over the period 2019–2021.

Figure 94: Employment by industry in New Zealand

Employment (000s) 2019–2022, and change in employment (%) 2019–2021

Source: Stats NZ, Household Labour Force Survey

6.3.4. Recruitment became easier in 2020, then harder in 2021 and 2022 | I māmā ake te kimi kaimahi i te tau 2020, ā, i uaua ake i 2021 me 2022

Firms found it easier to find new employees in 2020, but harder in 2021 and 2022. Close to 60% of firms in 2022 reported severe difficulty hiring tradespeople and related workers such as apprentices, and a further 30% reported moderate difficulty (Figure 95).

Figure 95: Difficulty recruiting in New Zealand, 2018–2022

Percentage of businesses reporting difficulty recruiting, by occupational group and degree of difficulty

Source: Stats NZ, Business Operations Survey

6.3.5. Migration | Te hekenga tāngata

Disruptions to migration flows contributed to the increased difficulty in hiring in 2021 and 2022 (see Figure 95).

New Zealand closed its border to non-citizens and non-residents from 2020 to 2022 and required arriving travellers to enter managed isolation and quarantine (MIQ). The closure was announced on 19 March 2020, taking immediate effect. Only those who qualified for 'border exceptions' were able to enter New Zealand.³⁰

Prior to the pandemic, net monthly migrant arrivals had been positive and rising from the mid-2010s, reaching a peak of over 20,000 just before the border was closed. With the closure of the border, net monthly arrivals initially fell to just over 1,000 before settling at around 5,000 until the staged reopening of international travel in 2022. Migrant arrivals then jumped to around 25,000, before moving back towards longer-term trends (Figure 96).

Figure 96: Immigration to New Zealand

Estimated monthly migrant arrivals, 12/16-month rule, 2005–2025

Source: Stats NZ, Infoshare
Notes: The 12/16-month rule is a way of classifying border crossings as short-term or long-term based on whether travellers spend 12 months (or more) of the following 16 months in New Zealand. A migrant arrival is an overseas resident who arrives in New Zealand and cumulatively spends 12 out of the next 16 months in New Zealand.

During the period of the border closure, most arrivals were Australian or New Zealand citizens. This reflected that New Zealand citizens (and permanent residents) and Australian citizens (and permanent residents) ordinarily resident in New Zealand were the majority qualifying for border exemptions. Additionally, quarantine-free travel between Australia and New Zealand was possible for a brief period during 2021 (Figure 97).

Figure 97: Migrant arrivals by citizenship or visa type into New Zealand, 2019–2022

Estimated monthly migrant arrivals, 12/16-month rule

Source: Stats NZ, NZ Royal Commission of Inquiry into COVID-19 Lessons Learned: Phase One Main Report (2024)
Notes:
1. The 12/16-month rule is an overseas resident who arrives in New Zealand and cumulatively spends 12 out of the next 16 months in New Zealand. Data points placed on first day of month for all events.
2. Some seasonal and temporary workers arrived between April 2020 and April 2022, and they may have stayed long enough to meet the 12/1-month rule.

6.3.6. Unemployment | Te kore mahi

Unemployment increased in the aftermath of the first national lockdown, reaching 5.0% in the third quarter of 2020 (Figure 98). It then fell to 3.2% at the end of 2021 and remained low over the following year. Unemployment during and since the pandemic has not reached the peaks that followed the GFC and earlier economic crises.

Figure 98: Economic shocks and unemployment

Percentage unemployed, Q1 1985 to Q2 2025

Source: Stats NZ, Household Labour Force Survey

Vacancies

Job vacancies during the pandemic fell in 2020, perhaps reflecting initial uncertainty about the economic impact of COVID-19. However, they quickly rebounded, reaching their highest levels in August 2022 (Figure 99). Vacancies subsequently declined, before plateauing in 2024–2025.

Figure 99: Online job vacancies in New Zealand

Jobs Online index, May 2007=100, January 2007 to January 2025

Source: Ministry of Business, Innovation and Employment, Jobs Online monthly data release
Notes: Jobs Online is a regular data series that measures changes in online job advertisements from 4 internet job boards – Seek, Trade Me Jobs, Education Gazette and Kiwi Health Jobs.

Demand for unskilled workers grew particularly quickly over 2021–2023 (Figure 100). Because of the border closure, there was limited immigration for work purposes during this period (see Figure 97).

Figure 100: Online job vacancies for skilled and unskilled workers

Jobs Online index, May 2007=100, January 2017 to January 2025

International comparison

The small and short-lived increase in unemployment over 2020 in New Zealand was below the average for OECD countries (Figure 101).

Not visible in Figure 101 is the particularly high, but brief, increase in unemployment in 2020 in the United States. Unemployment peaked at 14.8% in April 2020, before falling to 6.7% by December 2020 and 3.9% by December 2021.³² This reflected both the very flexible nature of the United States labour market, and the fact that government financial supports in the United States were paid to unemployed workers and to households, rather than to employers to preserve jobs.³³

Figure 101: Unemployment rates across the OECD

Unemployment as a percentage of the workforce, 2020–2023

Source: Organisation for Economic Co-operation and Development

Jobseeker Support for the unemployed

Another perspective on unemployment is to consider the people receiving government benefits. Jobseeker Support is a benefit provided to people who are actively looking for or are preparing for work.³⁴ The numbers of people receiving Jobseeker Support grew rapidly in 2020 (Figure 102).

Not all people who experience unemployment receive a benefit. Some people find new work on their own, and others do not qualify because they have partners who are still working or because they have enough resources in the meantime.

Other types of benefits, for example, Sole Parent Support and Supported Living Payment, did not show the same increase in 2020.

Figure 102: Working age people receiving main benefits

Working aged people receiving main benefits (000s), by benefit type, May 2009 to June 2025

Source: Ministry of Social Development, Benefit Fact Sheets, https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/benefit/

²⁹ Note that because workers can have more than one job, 'total filled jobs' will be slightly higher than the number of people employed. These data are derived from surveys, so a small increase or decline may not reflect reality.

³⁰ NZ Royal Commission of Inquiry into COVID-19 Lessons Learned: Phase One, Main Report (2024), Part 2 Chapter 4.2 What Happened, https://www.covid19lessons.royalcommission.nz/reports-lessons-learned/main-report/part-two/4-2-what-happened

³¹ United States Bureau of Labor Statistics, 'Civilian unemployment rate', https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm

³² Alex Bell, Early evidence on federal government income supports for U.S. individuals, workers, and families during the COVID-19 pandemic, Washington Center for Equitable Growth, December 2022, https://equitablegrowth.org/wp-content/uploads/2023/01/121222-Alex-Bell-Wyss-Report.pdf

³³ Ministry of Social Development, Benefit Fact Sheets, https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/benefit/