How has COVID-19 impacted unemployment levels in New Zealand?


  • COVID-19 impacted unemployment levels in most parts of the world, whereas New Zealand surprisingly witnessed a decline of only 4% in June 2020 quarter.
  • The government announced a NZ$50bn fund with the aim of stabilising the economy to prevent maximum people from becoming unemployed.
  • During 2020, Air New Zealand, the National Carrier had to lay off over 1400 employees, due to the COVID-19 related travel restrictions.

With the unfurling of the pandemic, the entire world witnessed ups and downs never seen before. Right from being cooped up at homes due to the fear of infection, to the novel routines of social distancing and wearing masks, the disease brought with itself a lot of implications.

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Several industries across the globe suffered immensely due to the pandemic and are only now looking to recover to pre-COVID levels, with robust planning and contingencies. Numerous people across the world lost their jobs due to COVID-19 and many were forced to work at minimal wages due to companies downsizing in the absence of usual business.

NZ recorded low unemployment rate in June 2020

Surprisingly, the unemployment rates in New Zealand saw a lesser decline as opposed to several parts of the world.  The government announced that the unemployment rates declined from 4.2% recorded during March quarter to 4% in the June quarter in 2020, when COVID-related lockdown and other restrictions took place.  


How did NZ Government manage to retain low unemployment rate?

Also, it was predicted in May 2020 that the unemployment rates in June could surge up to 8.3%. While the month of March last year witnessed one of the most strictly followed lockdowns in the world across New Zealand, the restrictions began to relax by the end of April to the beginning of June 2020.

NZ Finance Minister, Grant Robertson revealed how they were able to save several jobs due to opening the economy sooner than most countries. With robust techniques and measures followed by the government, people were able to retain their jobs, unlike thousands of people across the world who had lost their respective sources of income during the testing times.

$50 billion COVID-19 Response and Recovery Fund

It was announced in May during the announcements of Budget2020, that the government would release a NZ$50bn fund in order to reduce the impact of COVID-19 on unemployment. It was said to be one of the most significant financial commitments made in the recent history.

Such a huge amount dedicated to the stabilisation of employment in the country meant the government was looking for viable solutions to actually help people maintain a source of income, as well as help the economy normalise. The plan was aimed towards normalising employment to Pre-COVID levels in the two years to come.

Reason behind NZ’s unemployment

As found in the month of August 2020, the labour market witnessed a lull due to COVID-19 related restrictions. Labourers were getting little or no work. As many as 35,700 people were reportedly jobless in the month of June.

Being asked to leave from their previous job, not wanting to risk working in the pandemic, leaving the previous job or not being able to work as many hours as they would have wanted were some of the major reasons discovered behind unemployment rate.

While COVID-19 itself was not found to be the main reason for unemployment, the restrictions in the lockdown period was one of the biggest reasons for the same.

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With the tourism industry taking the hardest hit due to the onset of COVID-19 there were massive lay offs announced by organisations due to lack of business.

One such example is the National Carier Air New Zealand (NZX:AIR) that had to lay off over 1400 employees in the absence of regular business. While things have got better in terms of restrictions after the lockdown was relaxed, the main goal here is to be able to survive the worst  financial challenge that the airline has faced, as stated by AIR’s General Manager of Cabin Crew Ms. Leeanne Langridge.

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How does the year 2021 look in terms of employment in New Zealand?

With the economy witnessing growth in the last quarter of the year 2020, things have now started to appear promising in terms of employment opportunities during 2021.

It was witnessed that almost all sectors are substantially rising in different parts of New Zealand. Cities like Wellington witnessed a 20% rise whereas Auckland saw a 24% upscale. While there was a 17% rise witnessed in Canterbury. The need of the hour is to focus on bringing the economy back to its previous levels in the future, whilst creating more and more employment opportunities for people.