New Zealand has 103,000 underemployed people, according to the Greens.

A rising tide of "underemployment" is creating a new social underclass, say the Greens in accusing the Government of "massaging" unemployment figures.

Since 2013 March Quarter, the number of people classified as underemployed had risen from 82,400 to 103,600 in the same quarter in 2015.

The statistics in the latest Household Labour Force Survey show that while unemployment had dropped to 5.8 per cent, underemployment had risen by 21,200 in two years.

Statistics New Zealand began measuring underemployment in 2013, defining it as the "grey area" where people have a job but have similarities to unemployed people because they face a "partial lack of work".

It is when a part-time worker is willing and available to work more hours than they usually do. The statistics are limited to part-time workers.

"We know have 103,000 underemployed, but Government treats them as employed for their figures," said Green Party co-leader Metiria Turei.

"The Government is massaging their employment figures in order for them to look like they're doing way better, when in fact these are people looking for more work and many of them are unpaid."

Turei said the group was a "growing underclass of New Zealanders," which widened the gap "between the haves and have-nots".

Finance Minister Bill English will deliver his seventh budget on Thursday and is likely to place a heavy focus on inequality.

"There's plenty of people who would like to get more hours of work, and more days of work," he said.

"In a growing economy that possibility is there, but for some it's hard to realise it. We're always keen to help support businesses and remove blockages to people getting opportunities to work."

The labour force figures highlighted implications for children living in poverty, whose parents might be "employed", but not working enough hours to qualify for the full Working for Families payments.

The Government has acknowledged there is a group of "working poor" in New Zealand.

Citing labour force survey figures, Economic Development Minister Steven Joyce said in early May that the number of people employed grew 16,000 in the March quarter and 74,000 over the year.

The participation rate - working-age people who say they're willing and want work - was also the highest ever recorded for New Zealand, at 69.6 per cent.





