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Graphic: An Encyclopaedia of New Zealand 1966.


This information was published in 1966 in An Encyclopaedia of New Zealand, edited by A. H. McLintock. It has not been corrected and will not be updated.

Up-to-date information can be found elsewhere in Te Ara.




Early records of unemployment in New Zealand are sketchy. Between 1865 and 1870 there were many references to unemployment, the position being at its worst in 1868. From 1870, with Vogel's vigorous public works' programme, the position improved, although even in the boom years of the 1870s with their strong demand for immigrant labour, there were problems of winter unemployment.

Economic depression again appeared in the late 1880s and by September 1888 it was estimated that there were several thousand persons unemployed throughout the country. At this time (and, indeed, until 1930) the only Government measure available for reducing unemployment was the provision of relief work for a limited number of men on public works and other Government projects. In 1888 the number of men on special unemployment relief works reached 727. After 1888 conditions again improved and by 1890 no men were employed on relief works. In June 1891 the Bureau of Industries (later, Labour Department) was established for the sole purpose of assisting unemployed persons to find work. In 1900, and in the years immediately following, there were increasingly frequent references to shortages of labour although a problem of seasonal unemployment continued. The Labour Department's records show that between 1892 and 1905 it placed some 2,000 to 3,000 unemployed workers in employment each year.

Depressed conditions accompanied by increasing unemployment occurred again in the years 1906 to 1911, the Labour Department's figure for unemployed workers assisted into employment in each year rising to over 10,000 for 1909 and remaining above 5,000 until after 1916 when wartime conditions began to reflect in labour shortages. Apart from a slight increase in 1920 and again in 1922, unemployment remained fairly constant and of relatively small dimensions from 1917 until 1926. For most of these years the number of persons assisted into employment by the Labour Department remained below 3,000, with a winter peak of less than 1,000 registered unemployed.

In 1927, however, the total of persons assisted into employment rose sharply to over 10,000, with a winter peak of 2,928 registered unemployed. Throughout the following summer the number of registered unemployed remained above 1,200 and reached a peak of 3,414 in June 1928. In October 1928 the Government, troubled by the increasing unemployment, set up a Committee to report on the problem. The Committee made its first report in August 1929 (see Appendix to Journals of the House of Representatives, H. 11B, 1929) just after registered unemployment had reached a new winter peak of 3,896. Until the end of September 1929 the usual downward movement set in, but was abruptly upset following a Government announcement in September that work would be offered to all unemployed registered with the Labour Department. The announcement induced some 4,000 additional registrations and brought unemployment to a fresh peak of 6,264 in mid October. The uptake of seasonal activities and the expansion of relief works reduced this figure to 1,242 in December 1929, but the cost of relief works had risen from some £256,000 in 1926–27 to some £915,000 in 1928–29.

In January 1930 the Committee on Unemployment made its second report to Government. Its two reports represented the first comprehensive studies of the unemployment problem. A considerable body of information was brought together although relatively little attention was given to the relationship between crests of unemployment and falling overseas prices for farm products. The Committee examined various measures which might create additional employment. As a result of the Committee's recommendations, the Unemployment Act 1930 was enacted. All male persons 20 years of age and over were required to register and, with some exceptions, to pay a levy of £1 10s. a year, payable quarterly. The proceeds of this levy went into an Unemployment Fund which was also subsidised from the Consolidated Fund. An Unemployment Board was appointed to assist in the administration of the Act and in particular to make arrangements with employers for the employment of unemployed persons, to promote the growth of industries, and to make recommendations for the sustenance allowances to be paid to unemployed persons. In conjunction with the Labour Department the Board was to operate labour exchanges known as Labour Bureaus. Initially, the maximum rates of sustenance were £1 1s. per week for each contributor to the Fund, plus 17s. 6d. per week for a dependent wife and 4s. per week each for dependent children.

In 1931 the Unemployment Act was amended. The levy was reduced to 5s. per quarter supplemented by a tax on earnings at a rate of 3d. in each pound, increased in 1932 to 1s. in each pound. The Unemployment Board was reconstituted and other changes were made in financial and administrative procedures. The levy was later abolished.

At the end of 1930 there was a sudden collapse in prices of exports, particularly wool, accompanied by an equally sudden and quite unforeseen increase in unemployment, viz.:

Date Number Registered as Unemployed Date Number Registered as Unemployed
18 Aug 1930 5,639 26 Jan 1931 18,607
22 Sep 1930 6,099 16 Feb 1931 22,842
24 Oct 1930 6,055 23 Feb 1931 27,662
24 Nov 1930 7,402 16 Mar 1931 31,678
29 Dec 1930 13,096 30 Mar 1931 38,028

By September 1932 registered unemployed and persons on relief work exceeded 73,000. This figure did not again come below 50,000 until September 1936. By the middle of 1939 it had been reduced to below 20,000.

At the end of March 1931 there were 24,941 registered unemployed then being provided with part-time relief work and a further 13,087 without any work. At this time two relief work schemes were operating. Under the first of these schemes local authorities were subsidised to undertake maintenance, improvement, and development work which they would not otherwise have embarked upon – fencing, ditching, drainage works, land clearing, river-protection works, street formation, etc. – the Board subsidising such work on the basis of £2 for 1. The second scheme, on a pound-for-pound basis of subsidy, enabled private individuals to put in hand works mainly of similar types which would not otherwise have been undertaken. A third scheme of assistance had also operated as a stopgap for a brief period before Christmas 1930. From March 1931 onwards various further schemes were introduced, some as temporary measures and others of greater permanency. A main emphasis in the early schemes was on subsidised farm employment (on such work as bushfelling, scrub cutting, drainage, etc.), on afforestation, land reclamation, and farm settlement. In addition, various public works were commenced or expanded to provide employment with camp accommodation, mainly for single men, and a scheme for subsidising building and construction activities was introduced. By the end of 1933 there were 29,870 men in full-time employment subsidised by the Unemployment Board, and 37,870 men in receipt of part-time relief work or on sustenance allowances. The numbers of unemployed were reduced slowly in the following years, but the pattern of handling unemployment remained substantially the same until 1936. (See Reports of the Unemployment Board, H. 35, 1931, and following years.)

Following the change of Government at the end of 1935, the Unemployment Act was replaced by the Employment Promotion Act 1936, the Unemployment Board was abolished, the handling of unemployment was placed in the hands of a State Placement Service operating within the Labour Department, and sustenance and relief work rates were increased substantially. All relief camps were converted to standard works at standard full-time rates of pay. On 1 April 1939 the provisions of the Social Security Act 1938 became operative and unemployment benefit was placed on a new basis within the social security scheme as a payment which the worker was entitled to of right where he fulfilled the eligibility requirements. Registration for employment and the placement of workers in employment remained functions of the Labour Department.

During the war period, 1939–45, unemployment disappeared as a significant problem. In 1946 a National Employment Service was established under the Employment Act 1945 with the principal function of promoting and maintaining full employment. A year later this organisation was amalgamated with the Department of Labour. Throughout the postwar years the main feature of the employment situation has been acute labour shortage, particularly of skilled workers, rather than unemployment. From 1948 to 1955 the monthly average of disengaged persons registered for employment did not exceed 100. From 1955 to 1959 the figure increased until it reached 1,656 in July 1959. Since then it has again fallen. Even the peak figure in 1959 represented a negligible percentage of unemployment.

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