Forty years of change in the jobs Kiwis do and the places they call home

Over the last 40 years, New Zealanders – and people in other countries – have experienced big changes in the jobs they do and where they live and work. These changes include:

• a decline in manufacturing jobs
• an increase in jobs in ‘information-intensive’ industries (which are better paid and require a tertiary qualification)
• increasing participation of women in the labour market
• the rapid growth of large ‘super’ cities (of which ours is Auckland) and
• people moving to locations with desirable amenities, such as those with a favourable climate (think Tauranga and the Kapiti Coast).

In a new Productivity Commission working paper released today, New jobs, old jobs: The evolution of work in New Zealand’s cities and towns, census data is used to document and analyse some of these changes in New Zealand between 1976 and 2013.

The paper is co-authored by the Commission’s Guanyu Zheng (Fish)¹, together with Andrew Coleman (Otago University, ex-Commission, and currently a Visiting Associate Professor in Economics at Al Akhawayn University in Morocco) and Dave Maré (Motu Economic and Public Policy Research).

A big shift away from manufacturing …

In 1976, manufacturing accounted for a quarter of all jobs in New Zealand. Manufacturing jobs were also widespread – in all but two small towns more than 15% of the workforce were employed in manufacturing. However, by 2013, manufacturing accounted for less than one job in ten, and only a handful of small towns had more than 15% of their workforce employed in manufacturing industries.

Employment share by industry in New Zealand, 1976, 1996 and 2013

Source: Calculations based on Stats NZ Census data, 1976–2013

… and a rise in the financial sector, especially in Auckland

While only a third of the financial sector workforce worked in Auckland in 1976, its growth had somewhat of a vortex-like effect. Census data shows that two thirds of the national increase in employment in the finance sector between 1976 and 2013 took place in Auckland.

Smaller cities also experienced a growing share of jobs in sectors like professional services, but on a much smaller scale than in Auckland.

Greater homogeneity in employment offerings across New Zealand

Another finding is that most cities have become more diversified, and more like each other. Small and medium sized cities with specialised industries and jobs are much less common. This means that finding work by moving cities is easier than it once was.

The value of a nice climate

Many of the smaller cities that have had large increases in their populations and workforces have desirable attributes, such as a favourable climate. Some of these places, like Tauranga (176% growth in employment over the period 1976-2013) or Kapiti (129% growth), do not have particularly high paying jobs, but they provide jobs that service the local population – in industries such as retailing, construction, education and health care.

Queenstown has had employment growth of 361% over the same period – that’s mostly due to its development as a tourism hub with growth in industries like accommodation, hospitality and recreation.

Some cities and towns have found it harder than others

Cities and towns that specialised in agricultural processing have found it more difficult to develop new industries than other places. However, while the cities and towns that did not make the transition to new industries particularly well didn’t shrink in size, they didn’t expand much either. Such places experienced little employment or population growth over the period even though the population of the whole country expanded by nearly 50 percent.

What do I take out of this for the future of work?

• The New Zealand economy looks very different from forty years ago. New Zealanders have had to respond to big changes in the types of jobs and where jobs have been located.
• Structural change in the New Zealand economy has followed global trends.
• Future change, as a result of tech change (or from other global forces), should be viewed in the context of the magnitude and scale of change that has already taken place over the last 40 years.
• If current trends continue, we could expect to see further growth in ‘information-intensive’ sectors in large cities, and a continued demand for people with high levels of skill and tertiary qualifications.
• We know that New Zealand today has high labour force participation and low unemployment. We can count ourselves fortunate on that front, but do we have a labour market that facilitates labour mobility, good job matching and good job-to-job-transitions² for workers?
• A dynamic labour market combined with good social policies can help people to adapt and adjust to labour market changes of the future.

Image: Jack MacCormick

Notes
1. Check out some of Fish’s other papers here, here and here
2. Watch out for Andrew and Fish’s next paper on job-to-job transitions in New Zealand, coming out next month!