January 27, 2013

N jobs destroyed?

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So. 3News reports that the changes to the warrant of fitness rules are going to lead to 2000 jobs being destroyed.  Since this number comes from opponents of the change, it’s almost certainly exaggerated, but how does it compare to the  general rate of job creation and destruction?

According to Stats NZ, in 2009 there were 252 360 jobs lost. Fortunately, there were 223 860 jobs created, even in the depths of the recession.  In 2008, there were 259 920 jobs created and 205 170 jobs destroyed.  So, the WoF change amounts to about 3 days worth of normal background job destruction.  As this shows, jobs always turn over quite rapidly. If we (or, rather, those of you who have cars) stop spending money on WoFs, the money saved will mostly get spent on something else, and will create broadly the same number of jobs there.

Specific job creation or destruction matters a lot in towns that depend on a single employer or industry, but otherwise the headline numbers are rarely as bad as they sound, unless you have one of the jobs.

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Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »

Comments

  • avatar
    Nick Iversen

    Those 2000 people who were deemed to be doing unproductive work (and wasting motorists’ time thereby making them unproductive too) will now get jobs being productive. And motorists will be slightly more productive.

    So a net gain to the economy.

    12 years ago

    • avatar
      Thomas Lumley

      In the long run, and on average, yes.

      You’d expect roughly 2000 jobs to be created elsewhere, but it’s not necessarily the same people who get those jobs, and even if it is, they will be unemployed for a while. That’s unpleasant for them and bad for the whole economy (unemployment is one of our least productive industrial sectors). And the WoF tests weren’t completely useless.

      But, yes, it will be a small benefit to the economy. A very small benefit. Even ignoring the costs, and taking the government’s figures at face value, $1.8 billion over 30 years is 4/100ths of a percent of NZ GDP.

      12 years ago