by Jim Rose in business cycles, econometerics, economic growth, economic history, job search and matching, labour economics, labour supply, macroeconomics, politics - New Zealand, Public Choice, unemployment, unions, welfare reform Tags: antimarket bias, Don Brash, economic reform, expressive voting, Homer Simpson, Leftover Left, lost decades, makework bias, neoliberalism, rational ignorance, rational irrationality, Sir Roger Douglas, Twitter left

Today, Closing The Gap – The Income Inequality Project boldly claimed today that there was next to no unemployment in New Zealand prior to the onset of the curse of neoliberalism.

There is an Internet on computers now where it is easy to find data showing that the unemployment rate was rising rapidly in New Zealand in the 1970s and in double digits by the end of the 1980s – see figure 1.

Figure 1: harmonised unemployment rates, Australia and New Zealand, 1956-2014

Source: OECD StatExtract.

Figure 1 shows unemployment was rising rapidly in the 1970s and wasn’t much different by the end of the 1970s to the unemployment rates recorded after about 2000 in New Zealand.

One of the reasons that Sir Roger Douglas wrote There’s Got To Be A Better Way was the rapidly rising unemployment in New Zealand and the stagnant economic growth in the late 1970s and early 1980s.

New Zealand was one of the most regulated economies, so much so that Prime Minister David Lange said:

We ended up being run very similarly to a Polish shipyard.

As for those jobs on the railways, the then Reserve Bank Governor Don Brash said in 1996:

Railways cut its freight rates by 50 percent in real terms between 1983 and 1990, reduced its staff by 60 percent, and made an operating profit in 1989/90, the first for six years.

More on unemployment: In 1955 the New Zealand’s prime minister knew all unemployed personally. – Atkinson’s new book http://t.co/x37Vxya97C—

Max Roser (@MaxCRoser) July 24, 2015