Understanding New Zealand: Demographics of Industry

Some stereotypes are true; others are not. One of those that is not true is that Maoris dominate all working-class industries. Although (as described elsewhere) many working-class industries and occupations are heavily populated by Maoris, this isn’t the full story.

The correlation between working in the agriculture, forestry and fishing industry and being of European descent (0.37) was stronger than the correlation between working in that industry and being Maori (0.22). Part of the reason for this is the number of family-run farms, especially on the South Island, that are run by Pakeha.

Working in the mining industry was also much more strongly correlated with being of European descent (0.25) than with being Maori (0.08). This is a consequence of that a large proportion of the Maori population lives in Auckland and thus far from where most of the mining takes place.

Being Maori did have significant positive correlations with a number of generally working-class industries, in particular transport, postal and warehousing (0.47), manufacturing (0.44), education and training (0.43), electricity, gas, water and waste services (0.42) and administrative and support services (0.37).

One point to note here is that these industries are not so much working class as they are people-focused. It might be that much of the association between being Maori and being working class is because many people-focused jobs happen to be working class ones and Maori gravitate towards people-focused jobs.

The correlations with median personal income give us a good indication of which industries in New Zealand are the best paid.

The strongest positive correlations between median personal income and working in a particular industry were 0.76 for professional, scientific and technical services, 0.69 for financial and insurance services, 0.54 for information media and telecommunications and 0.49 for rental, hiring and real estate services.

The strongest negative correlations between median personal income and working in a particular industry were -0.40 for manufacturing, -0.29 for transport, postal and warehousing, -0.23 for agriculture, forestry and fishing and -0.15 for mining.

The negative correlations were weaker than the positive ones for the reason that anyone in gainful employment – in any industry – is almost guaranteed to be wealthier than all beneficiaries and the majority of pensioners.

The correlations with education reflected that the highest paying industries were also the ones that generally required the greatest degree of previous training and therefore education.

The strongest of all was the correlation between working in scientific, technical and professional services and having a Master’s degree – this was 0.94. There is nothing suprising about this because often a Master’s degree minimum is necessary for a professional job.

The correlations between working in a particular industry and being born in New Zealand are interesting because they can tell us what sort of person is most likely to successfully get through our immigration system. Because our immigration system prioritises the sort of person who has a skill that New Zealand has a shortage of, these people will be disproportionately many in some industries.

Foremost of these was scientific, technical and professional services. The correlation between working in this industry and being born in New Zealand was -0.47, which tells us that a fair number of these workers have moved here from overseas.

The correlation between being born in New Zealand and working in financial and insurance services was even more strongly negative, at -0.56. The main reason for this is probably because the bulk of this industry in New Zealand is based in Auckland and that’s also where most foreign-born people are.

Many of the people who own their own farms work at home in a family business. This is evident from the strong positive correlation between working at home and working in the agriculture, fishing and forestry industries, which was 0.81, and the very strong positive correlation between working unpaid in the family business and working in the agriculture, fishing and forestry industries, which was 0.90.

One trend that makes sense if considered from an economic psychology perspective is that the better paid a person’s job is, the more likely they are to work full time.

The industries that had the strongest positive correlation with working full-time were professional, scientific and technical services (0.52), financial and insurance services (0.48) and information media and telecommunications (0.44).

There are several reasons for this, but the major one is that anyone of a mind to learn the skills necessary to do jobs in these industries are usually also of a mind to work full-time and to earn as much money as possible during this time.

The other major one is that anyone with the capital to employ a person with these skills is likely to be a serious operator and consequently will be looking to get full productivity out of their employees.

Perhaps the best way to determine which industries are the best paid are to see which of them have the strongest correlations with high income bands.

The industries that had the strongest correlations with low income bands were hospitality in the $5-10K band; mining in the $15-20K band; healthcare and social assistance in the $20-25K band; agriculture, forestry and fishing in the $25-30K band; electricity, gas, water and waste services in the $30-35K band; and manufacturing and transport, postal and warehousing in the $35-40K band.

These are the industries for people who are generally doing it hard. The jobs are not well paid, and they are insecure, and they are often seasonal. Usually they are also jobs that have a high turnover (hospitality is particularly well known for this).

Where jobs are more stable, regular and predictable, we can also see a rise in which income band their workers belong in.

The industries that had the strongest correlations with medium income bands were construction and retail trade in the $40-50K band; administrative and support services in the $50-60K band; education and training in the $60-70K band; and wholesale trade, public administration and safety and arts and recreation services in the $70-100K band.

Construction is arguably the top of the working class industries, because even though the majority of the labour is manual it involves very high amounts of capital. The other five industries in this group (leaving aside retail trade) are the start of the knowledge industries, in that they generally demand a higher level of prior education.

The industries that had the strongest correlations with the high income bands were information, media and telecommunications, finanical and insurance services and professional, scientific and technical services at $100-150K, and rental, hiring and real estate services at $150K+.

In other words, if a New Zealander works in any of these industries, the odds are that they have a six figure salary. This is because these industries all, like construction, involve gigantic amounts of capital, but unlike construction they are knowledge industries and the workers in these industries are in higher demand and shorter supply.

Rental, hiring and real estate services involves not only big money but employees that work on a commission and not a salary. This explains why working in this industry has its strongest correlation with the highest income band.

*

This article is an excerpt from Understanding New Zealand, by Dan McGlashan, due to be published by VJM Publishing this winter.

Leave a Reply

Your email address will not be published. Required fields are marked *