Employment and earnings gaps: the disparity in labour market outcomes in New Zealand and the U.S.
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Maori and Pacific people have experienced high unemployment rates and low incomes when compared with Pakeha (European New Zealanders). Similarly, Afro-Americans and Hispanic-Americans in the United States of America have also experienced high unemployment rates and low incomes when compared with White-Americans. These common ethnic patterns of labour market inequality provide a motivation for exploring the explanatory factors underlying them. The study involved the collection of secondary data, guided by relevant theoretical perspectives and existing literature. The most recent demographic data related to the labour market outcomes among Maori were compared with those for Pacific people, Asian people, Afro-Americans, and Hispanic-Americans in order to discern patterns and similarities. Human capital theory, labour market discrimination theory, labour queue theory, and labour market segmentation theory all contribute potential explanations for poor labour market outcomes among Maori and Pacific people in New Zealand as well as among Afro-Americans and Hispanic-Americans in the U.S. Components of labour market segmentation theory also partially explain the lower personal income among Asian people compared with that of Pakeha. While age composition has weak explanatory power for the poor labour market outcomes among Maori, Pacific people, Afro-Americans, and Hispanic-Americans; poor labour market outcomes among Maori, Pacific people, and Afro-Americans may also be explained, at least partially, by illegal activities. There were similarities in the labour market outcomes between Maori and Pacific people in New Zealand, and Afro-Americans and Hispanic-Americans in the U.S. There were also some similarities between Maori and Asian people. Although Maori and Asian people concentrated in different occupations and industries, they were more likely to work in lower paid occupations and industries compared with Pakeha. They were also more likely to work in the industries that had experienced declines in the numbers of filled jobs. There is no evidence that a presence of new immigrants raised unemployment rates and drove down wages of current workers and Maori in New Zealand. There appears to be a vicious cycle in both the New Zealand and the U.S. labour markets, which may repeat endlessly unless employment and earnings gaps, as well as educational and health gaps are narrowed, and negative effects of labour market discrimination is minimised. This study attempts to understand the factors that account for poor labour market outcomes among Maori and other ethnic minorities: Pacific people and Asian people in New Zealand so that effective policies can be implemented to improve these outcomes. The study’s findings might also assist Maori to improve their employment and earnings, and enable a statistical model to be formulated for future research.