4. EMPLOYMENT

Summary

The 1986-91 period has been one during which labour market conditions have tightened and the economic health of the country has worsened, with large employment losses from a number of sectors, especially in the manufacturing sector. It is also a period which has coincided with low agricultural returns and reductions in agricultural employment. Between 1986 and 1991:

  • the relative contribution of community, social and personal services, business and financial services, and wholesale, retail, restaurants and hotels to total employment in both minor urban and rural areas increased
  • the relative contribution of agriculture and livestock production to total employment in rural areas declined
  • minor urban areas lost proportionally nearly three times as many jobs as rural areas
  • minor urban area job losses were high in the transport, storage and communication food processing, and utility industries
  • rural area job losses were high in the forestry and logging, hunting and trapping, and livestock and agricultural production industries
  • the majority of job losses in minor urban and rural areas were in full-time positions
  • the regions experiencing the greatest jobs losses from rural areas in absolute terms were Northland, Wanganui and Tongariro
  • the Northland, the East Cape and Westland regions lost proportionally more jobs from rural areas than any other region
  • regions containing large urban areas, including Auckland, Wellington and Canterbury, had increases in rural employment
  • there were large reductions in employment in food processing industries in the minor urban areas of a number of regions
  • the labourforce participation of youth (aged 15-19) decreased by more than 30% in both rural and minor urban areas
  • the 15-24 and the 40-60 year old age groups suffered a greater loss of jobs than other age groups in rural areas and minor urban areas

Please note that in the body of this chapter changes in employment and the distribution of employment across various industries are calculated in on a full-time and part-time combined basis. In some of the attached tables employment figures are calculated on a full-time equivalent basis with a part-time worker being counted as half a full-time worker.

4.1 Employment in Rural and Minor Urban Areas

Part one of this study examined the employment structures of rural areas in detail. Importantly it found that although the farming sector provided about a third of all employment in rural areas, the majority of employment was in service industries which constituted about half of all jobs. Despite a considerable reduction in employment between 1986 and 1991 in both minor urban and rural areas, the actual distribution of employment over the various industry sectors remained relatively unchanged. However, there was considerable increase in the contribution of community, social and personal services, business and financial services, and wholesale, retail, restaurants and hotels to total employment in both minor urban and rural areas. In contrast, the share of total employment in agriculture and livestock production in rural areas reduced dramatically.

The fact that minor urban centres are generally small rural service centres can be seen by comparing their employment structure with that of rural areas. Minor urban areas have a significantly higher percentage of employment in the various service sectors, and in the manufacturing industry sectors such as construction and food, beverages and tobacco which includes food processing, than rural areas. By contrast, rural areas have substantially higher percentages of employment in agricultural services and in agriculture and livestock production.

The contribution of agriculture and livestock production to total employment in rural areas is substantial. The industries employing the largest number of persons within this sector in 1991 were sheep farming (11.25%) and dairy farming (12.45%). Excluding the Auckland and Wellington regions, either sheep or dairy farming constituted more than 10% of rural employment in 1991.

The percentage of employment provided by the various agriculture and livestock production industries was mapped in part one of this study. The pattern of local concentrations of these industries has remained relatively unchanged in the 1986 to 1991 period and corresponds largely with climatic and topographical regions.

Areas with a high percentage of employment in dairy farming include the northern part of the West Coast, Horowhenua, Taranaki, Waikato, Hauraki Plains, Bay of Plenty, and Northland. Isolated pockets of dairying also occur near to Invercargill, to the south of Dunedin and around the Kaikoura coast. Beef farming is concentrated in similar areas, with high concentrations on the southern West Coast, in the Manawatu, in southern Hawke's Bay, in the Waikato, in northern Taranaki and in Northland. High concentrations of employment in sheep farming occur in the King Country, Hawke's Bay, southern Wairarapa, Southland and inland Canterbury.

Horticultural and fruit growing employment is generally concentrated in areas with large alluvial deposits. This includes the Waitaki and Clutha Valleys, the area to the north west of the Christchurch urban area, the Tasman Bay lowlands, the Horowhenua, Hawke's Bay, the Bay of Plenty and parts of Northland.

Generally the distribution of employment in agricultural services corresponds with the distribution of employment in agriculture. Employment in agricultural services is relatively high in the south west Waikato, the Manawatu, southern Hawke's Bay, East Cape, and in most parts of the South Island west of the Southern Alps. Particularly high concentrations of employment in agricultural services occur in Southland. The forestry and logging industry is one in which there is considerable spatial variation in employment. High concentrations of forestry related employment occur in the West Coast, Bay of Plenty, northern Hawke's Bay, and the north west of Northland.

In rural New Zealand the majority of manufacturing employment is concentrated in the paper and paper product, manufactured metal products including machinery, and food processing industries. In all three of these industries the highest concentration of employment occurs in small rural towns, rather than in rural areas in general. Employment in paper and paper product manufacturing corresponds with areas with relatively high levels of employment in forestry and logging. High levels of employment are found around Rangiora, in and around Tokoroa, in the south east Bay of Plenty and in the middle of the King Country. Employment in food processing is concentrated in towns located in areas with a relatively high percentage of employment in horticulture and fruit growing. This includes coastal south Otago, around Timaru, in southern Taranaki, in the Manawatu, in central Hawke's Bay and in the Hauraki Plains. The spatial distribution of employment in the paper and paper product, and food processing industries corresponds very closely with the spatial distribution of employment in the horticulture, fruit growing, and forestry and logging industries, i.e. the industries providing the raw inputs. Much of the manufacturing employment in the areas outside the main urban areas thus has strong links with the primary sector, and as such can be thought of as employment dependent on the primary sector.

Employment in the manufactured metal products (including the machinery and equipment) industry, tends to be high in localities in the vicinity of relatively large towns and cities. High concentrations occur on the peripheries of Dunedin, Invercargill, Timaru, Christchurch, Nelson, Picton, New Plymouth, and are extensive in many localities in the Waikato and northern Bay of Plenty. It is also probable that much of the employment in this type of manufacturing is related to equipment and machinery manufacture for the primary sector.

In general, employment in services tends to be higher in minor urban areas than in rural areas, as for manufacturing employment. In education and health services, high concentrations of employment occur in a number of areas, but particularly in the localities in the vicinity of relatively large towns or cities. This suggests that many of these persons commute to jobs in major centres while enjoying a rural residential lifestyle. High levels of employment in education and health services occur around Invercargill, Dunedin, Christchurch, Nelson, Palmerston North, Hamilton and Thames, among other towns and cities . Relatively high concentrations of employment in public administration and defence services occur in the areas which have low populations and are used for conservation purposes such as Fiordland, and in areas containing military bases such as around Waiouru (Wanganui region) and Burnham (Canterbury region). Central government employment contributes to high levels of employment in public administration and defence services in the main urban areas. In other service industries which are relatively large employers, such as real estate and business services, and retailing, there is less regional variation in the contribution of the industry to total employment.

4.2 Changes in Employment by Industry

The depressed economic nature of the rural sector in the late 1980s is reflected in the fact that between 1986 and 1991 total employment (full-time and part-time employment combined) in both minor urban areas and rural areas declined dramatically. In total 16,377 jobs were lost in net from minor urban areas, and a total of 8,298 from rural areas. Proportionally the declines were considerably higher in minor urban areas (-13.2%) than in rural areas (-3.5%). Compared with employment reductions in urban areas (-6.1%) however, rural areas (-3.5%) lost proportionally less jobs between 1986 and 1991, while minor urban (-13.2%) areas lost proportionally twice as many jobs.

The large proportional differences in job losses between minor urban and rural areas occurred in a number of industries. Minor urban areas experienced larger declines than rural areas in the transport, storage and communication, the construction, the electricity gas and water, the textiles, clothing and leather, and the food beverages and tobacco industries. This reflects the fact that many industries servicing the primary sector located in minor urban areas were detrimentally affected by the economic downturn in the rural sector, but also experienced the effects of deregulation on the manufacturing sector as a whole. Job losses in the transport, storage and communications sector reflect the rationalisation of substantial state enterprises, including the conversion of the postal system to a state owned enterprise, the modernisation and rationalisation of the telecommunication industry associated with its privatisation, and the restructuring of the railways. In contrast, rural areas experienced greater proportional declines in employment in the forestry and logging, hunting and trapping and agricultural services industries, although this was from a very low base.

While most industries in minor urban and rural areas experienced declines in employment between 1986 and 1991, this was not the case in the business and financial services sector which experienced employment increases. Similarly, employment in the community, social and personal services sector in rural areas increased.

4.3 Changes in Part-Time and Full-Time employment.

When the net changes in employment by industry are split into part-time and full-time jobs, it is apparent that the majority of net employment loss and gain has been in full-time positions both in rural and in minor urban areas. Particularly large absolute losses of full-time jobs occurred in sheep farming in rural areas, and in various manufacturing and construction industries in minor urban areas. There was also a loss of part-time jobs from a number of industries, with particularly large absolute losses from the food processing industry in minor urban areas (net reduction of 714 jobs between 1986 and 1991). The loss of part-time jobs from both minor urban and rural areas has serious implications given that traditionally many rural households have relied on income obtained from part-time off farm employment to supplement their on farm income. It is possible that the large net losses in full-time jobs, particularly in farming and similarly in other family based industries, reflect the increased substitution of unpaid family labour for paid labour in a period of economic recession. More likely however, they reflect the trend towards the use of agricultural servicing contractors, and a decline in permanent full-time agricultural employment.

While both rural and minor urban areas in net lost more full-time jobs than part-time jobs between 1986 and 1991, they had different patterns of employment growth. In rural areas the majority of employment growth was in full-time positions, while in minor urban areas there was a much higher level of growth in part-time positions.

Changes in full-time employment in both rural and minor urban areas between 1986 and 1991 have differentially impacted on men and women. For example, in minor urban areas percentage increases in the number of women occupying jobs in the business professional and laboratory, research science institute, air transport and horticulture industries, exceeded those for men. The industries in minor urban areas in which women experienced a proportionately greater decline than men tended to be those in which women were already under represented. These include the beef farming, building construction, and transport industries. A similar pattern of changes in full-time employment by sex and industry occurred in rural areas.

With regard to part-time employment in rural areas between 1986 and 1991, proportional increases in the number of women employed exceeded those for men in the welfare service industries and in the research science institute, insurance and finance industries in minor urban areas. Proportional decreases in the number of women exceeded those of men in the communications industry in both minor urban and rural areas, as well as in a number of other industries. It is probable that this reflects the over representation of women in relatively low skilled jobs in the communications sector, and that these jobs represented the majority of those lost from the sector under its restructuring.

4.4 Changes in Employment by Region

The rural areas of all and the minor urban areas of most regions had a net loss of jobs between 1986 and 1991. The region which had the largest decrease in the number of jobs from rural and minor urban areas in absolute terms was Northland. In fact, the decrease in employment in rural Northland was nearly four times that of any other region. There were large absolute decreases in numbers employed in minor urban areas of the Southland and East Cape regions.

Absolute measures of net changes in jobs mask the impact of the changes relative to a region's total supply of jobs. When the net changes in jobs between 1986 and 1991 are expressed as a percentage relative to the total number of jobs in each region, a slightly different picture emerges. The large net loss of jobs in Northland is not so significant when the region's total number of jobs is considered. In contrast the proportional net loss of jobs from rural areas was very high in the East Cape, Northland and West Coast regions with net decreases of more than 11%, while the net gain of jobs to rural areas was high in the Wellington, Marlborough, Canterbury and Auckland regions. In minor urban areas, large proportional decreases occurred in the Wanganui, Taranaki, East Cape and Tongariro regions.

The large decline in employment in the rural areas of the Northland, West Coast and East Cape regions is certainly a factor in their high rates of out migration of young persons, and is due to large absolute declines in employment in agriculture and livestock production, and in particular in employment in sheep, beef and dairy farming. Large absolute declines in various manufacturing industries, and in particular food processing, have also contributed significantly to the reduction in employment.

Substantial absolute declines in rural employment in the food processing industries also occurred in the Southland, Clutha-Central Otago and Hawke's Bay regions. This is probably a result of the closures and modernisation of meat works and dairy factories associated with the rationalisation of both the meat processing and dairy industries.

In proportional terms, reductions in rural employment in the various agriculture and livestock production industries excluding forestry, and in the various manufacturing industries, were not as high as the reductions in forestry related employment which exceeded 50% in most regions. For example, Hawke's Bay and East Cape both experienced net losses in full time equivalents in forestry of more than 70% between 1986 and 1991. In contrast, large absolute and proportional increases in employment in the other farming industry category occurred in the rural areas of all regions between 1986 and 1991. This reflects the generally increasing diversification of agricultural production.

In general, regions with high levels of employment growth in rural areas also had net in migration of young working age persons. This employment growth occurred in a number of different sectors. In the Marlborough region much of the growth in jobs was from the food processing industry, probably related to the processing of fish and shell fish and the growth of horticulture. In Canterbury and Auckland much of the increase was in the other agricultural services, while in the Wellington and Horowhenua regions the increases in employment were somewhat more diversified, and included increases in a number of service sector industries such as wholesaling, restaurants, and cleaning and sanitary services.

At the more local level, areas experiencing large decreases in employment between 1986 and 1991 included the inland rural areas of the East Cape, mid Westland, and various small rural communities including those in the southern Bay of Plenty, inland Wanganui and Rangitikei, and scattered communities throughout south Canterbury, Otago and Southland. In contrast, areas experiencing large increases include the northern Bay of Plenty and eastern Coromandel, the Kapiti and Horowhenua coastal areas, the Marlborough region in general, mid Canterbury and the Queenstown area. In the case of Queenstown, most of the increase can be attributed to the expansion of leisure based industries, and to the employment generated by the needs of a very fast growing population.

4.5 Changes in Labourforce Participation

As the supply of jobs has diminished with economic recession, restructuring of the state sector, and increasing commercialisation of the public sector between 1986 and 1991, the labourforce participation rate of the population decreased in every age group in both minor urban and rural areas. The labourforce participation rate is the number of people in the work force in a particular age group as a decimal fraction of the total number of persons in that age group. With the exclusion of the 15-19 year old age group, minor urban areas had a lower labourforce participation rate than rural areas in every age group in both 1986 and in 1991. More importantly however, the labourforce participation rate decreased more in every age group in minor urban areas than in rural areas over the period.

The most dramatic reduction in labour force participation rate of any age group occurred in the 15-19 year age group. In both minor urban and rural areas the reduction in the participation rate of this age group was approximately 30%, and reflects youth's increasing difficulty in gaining access into the job market, as well as increasing numbers of persons staying on at secondary, and going on to tertiary education.

When participation rates are examined by gender, some interesting trends emerge. Firstly, men had a much higher labourforce participation rate than women in minor urban and rural areas in both 1986 and 1991. Secondly, in both rural and minor urban areas the female labourforce participation rate declined less than that for men between 1986 and 1991. In fact in some age groups the female participation rate actually increased between 1986 and 1991 while decreasing for men. This was the case in the age groups between 45 and 65 in minor urban areas and in the age groups between 55 and 65 in rural areas.

In 1991 the area units with the lowest labour force participation rate were those in north Northland, the southern Bay of Plenty, the East Cape, particularly north coastal East Cape, north west Nelson, and the West Coast. A number of small rural settlements also had very low participation rates, particularly those in the Horowhenua.

While most rural area units experienced a decline in the labourforce participation rates of their working age populations between 1986 and 1991, there was considerable variability in the level of this decline. The area units with the greatest declines tend to be those which in 1991 had a low level of labourforce participation. These include those in the vicinity of Kaitaia, those in the southern Bay of Plenty, those in north coastal East Cape, and a number of settlements in Southland, Taranaki and the Waikato. It seems probable that the effects of declining labourforce participation may be cumulative, as they result in less demand for services etc. However, it is not clear if such a cumulative spiral explains why areas with low labourforce participation rates experienced such large declines.

4.6 Employment Changes by Sex

In the rural areas of all regions women experienced higher job growth, or lower rates of decrease in employment than men between 1986 and 1991. In fact, in a number of regions the male population experienced a decrease in the number of jobs in rural areas while the female population experienced increases. The differentials were the highest in the regions adjacent to, or containing large urban areas.

A similar difference between the sexes occurred in minor urban areas, although more regions experienced decreases in the number of jobs for both sexes than for rural areas. Generally speaking the proportional decreases in the number of female occupied jobs in minor urban areas ranged between one third to two thirds of the decreases for males.

The long term increasing female labour force participation rate is contributing to gender differences in the rates of employment growth and decrease. It is unclear why women have fared more favourably than men in employment terms under the exceptionally tight labour market conditions experienced in rural and minor urban areas over the 1986 to 1991 period. Women's lower representation in the manufacturing and agricultural sector and their better representation in service industries than men, is a probable explanation. The fact that rural women are typically better educated than rural men may also play a part, as women were better qualified for to fill the new positions that became available. This seems likely given that much of the employment growth was in the service sector areas such as community, social and personal services where women have traditionally been over represented.

4.7 Employment Changes by Age Group

With the exception of the 40-44 and 65+ year age groups, all age groups in minor urban areas experienced decreases in the numbers employed (full-time and part-time combined) between 1986 and 1991. Very large decreases occurred in the age groups between 15 and 35 years. In rural areas employment fell dramatically in the young age groups (15-30 years) but increased significantly in the 40-54 year age groups. Large reductions in youth and young adult employment do not just reflect general population trends, but also the fact that the young have suffered disproportionately higher rates of job loss than other age groups between 1986 and 1991. Unfortunately this is a main reason for the migration of this age group away from rural and minor urban areas.

As a generalisation the age groups which have experienced the largest decreases in employment in most industries between 1986 and 1991 are the 15-24 year age groups and the middle aged age groups between 40 and 60 years. Restructuring and depressed economic conditions resulted in enterprises, including government organisations, shedding labour. Initially this manifested itself in the form of not hiring new labour, thus the decline in the youth and young adult age groups, and later in the form of making existing workers redundant. Redundancy is typically concentrated in the middle aged and above age groups because some people can be convinced of taking early retirement, because typically older workers earn more than young workers, and because of the conception that older workers' skills may be dated.

4.8 Conclusion

The period between 1986 and 1991 was one of economy wide restructuring and recession. Rural areas, and minor urban areas lost a considerable number of jobs as a result. Large loss of jobs in manufacturing industries associated with the rural sector were experienced in minor urban areas, while rural areas suffered major job loss resulting from unfavourable trading in traditional sheep, beef and dairy farming industries. Proportional reductions in total employment were less in rural areas than the national average, and higher in minor urban areas than the national average. It is minor urban areas, and not rural areas per se, which have borne the brunt of major employment losses over the 1986 to 1991 period.

Changes in employment were not uniform throughout the regions. Regions which suffered very high proportional losses of rural employment were Northland, the East Cape and the West Coast. Employment gains did, however, occur in the rural and minor urban areas of regions containing large urban areas such as Auckland and Wellington.

Young adults have suffered disproportionately from employment losses in both rural and minor urban areas. While the labourforce participation rates of all age groups fell in both minor urban and rural areas between 1986 and 1991, young adults (20-24 years) suffered most acutely from lack of employment opportunities resulting from the recession.

It is quite possible that the contrasts in the effect of the economic recession over 1986 to 1991 on rural and minor urban areas would find an echo in a comparison of the changes experienced by the new 1991 rural areas and rural centres (small localities of less than 1000 population). However, because these localities have been classified as part of rural areas in our data, it is not possible to investigate this.

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