Productivity Commission research over a three-decade period shows Kiwis have experienced big changes in the jobs they do and the places they live and work, including the transport sector.
Employment in manufacturing declined from 25% to 10% of the workforce between 1976 and 2013.
At the same time there was significant employment expansion in professional services, health and education, accommodation and hospitality, and financial services.
Similar trends have been seen in most developing countries, with manufacturing employment declining from 32% of the workforce in 1950 to 9% in 2010 in the United States.
The recently released report, New jobs, old jobs: the evolution of work in New Zealand’s cities and towns, shows the decline of manufacturing and the rise of service sectors since 1976 has had important regional implications.
The fastest growing service industries “disproportionally favoured larger urban areas”. The effect was most noticeable in the financial services, wholesale, utility, and the professional services sectors, but it also occurred in the transport sector.
“While workers in large and smaller areas alike suffered job losses as manufacturing declined, reemployment opportunities in new growth industries opened up fastest in large urban areas,” the report says.
Employment in the wholesale, financial services, professional services and utility sectors increased much faster in Auckland than in medium or small sized urban areas.
Between 1976 and 2013, employment in these sectors increased from 16% to 31% of total employment in Auckland but only from 15% to 18% in medium sized areas.
The biggest increases in the size of these sectors occurred between 1976 and 1996, but Auckland has continued to increase its relative performance in these sectors since 1996.
Auckland also had more rapid than expected employment in the transport and administrative services sectors.
For smaller cities and towns, the presence of good amenities, such as a good climate or attractive scenery, became more important as manufacturing and primary production became smaller shares of the economy, the report says.
“New Zealand today is a very different place to 40 years ago”, economics and research director Dr Patrick Nolan says.
“In 1976, one-in-four Kiwis worked in manufacturing, whereas now that is around one-in-ten. These changes have had a real impact on our cities and towns and while some have thrived others have struggled.”
The report shows that between 1976 and 2013 employment in New Zealand’s 30 largest cities and towns increased by 48%, or an average of 1.1% per year.
However, there was significant variation, with nine urban areas having employment growth of 65% over the period. Employment decreased in four areas, including in Tokoroa where employment shrunk by 44%.
The economies of most cities and towns have also become less reliant on specialist industries and more like each other. As migration between areas is easier when all areas have similar jobs, the reducing importance of city-specific industries may have catalysed the shift of jobs from slow-growing areas to climate-favoured fast-growing areas, the report says.
“By studying the past this research provides lessons for the future. There is much that can be done to help New Zealanders adjust to changes in work and employment and this is something that the commission is investigating in its inquiry into Technological change and the future of work.”
