About 125,000 people were underemployed in the June quarter, largely due to complications from the Covid-19 crisis, Stats NZ said. 

StatsNZ labour market and household statistics senior manager Sean Broughton noted the rise, from 10.4 per cent to 12 per cent, is the largest since the series began.

“Many businesses were faced with financial pressure because of temporary COVID-19 related closures. They may have cut workers’ hours of pay in response and only ended their employment as a last resort,” Broughton said.

“This reduction in hours could have been one factor for the rise in underemployment this quarter.”

And the unemployment rate fell to 4 per cent, from 4.2 per cent last month. However, to be considered unemployed a New Zealander needs to be actively looking for work.

The Council of Trade Unions praised the result, saying that they are “better than expected”.

“Unemployment is now 4 per cent of the labour force, compared with Treasury’s projection for the period of 8.3 per cent, which is where it was at the beginning of the year,” CTU economist Andrea Black said.

“[Underemployment], which is when people don’t get enough hours or facing barriers to getting into paid work but want it, is at 12% which has increased by 2 percentage points from the start of the year.”

“Unions are telling us first hand that some employers are making people redundant – so it is possible that the next quarter will paint a different picture.”