Stimulate Or Suffocate, In The Light Of Older Women's Spending?

Scoop

09-08-2025

In the wake of the recent release of labour force data (Household Labour Force Survey, HLFS, Nicola Willis bemoans 'glass half empty' view of unemployment figures, RNZ 6 August 2025), 1918-1920 National Party Leader Simon Bridges, has called for economic "stimulus" to rescue in particular the dire Auckland economy. (See Call for government to help Auckland as unemployment rises, RNZ; contrast the Minister of Finance Nicola Willis's retrospective and ongoing advocation of fiscal suffocation Dangers of Excessive Spending Highlighted, Scoop; both 7 August 2025.)
My focus here is to look at the historical and recent employment rates of older women (aged over 55), and to consider the importance of their spending to the health or otherwise of the New Zealand economy. My reference is the first chart highlighted in Employment in New Zealand – especially of women – at the Age Margins, Evening Report, 7 August 2025.
The chart shows that there is a huge increase in the percentage of older women who meet the official definition of employment. (This generous definition includes wage/salary workers – fulltime or part-time – self-employed workers, active employers, and people working without wages in a family business.) The data reveals a huge increase in the 'participation rate' of older women in the labour market.
The age group 60-64 had a particular impetus to retire later, namely the rise in the early 1990s of the age of entitlement to New Zealand Superannuation from age 60 to age 65. But the pattern is essentially the same also for women in their late fifties and in their late sixties.
The appropriate benchmark year is 1987, by time the HLFS was bedded in and before the economic consequences of the financial crash in late 1987. While the high period for employment of older women is 2022 or 2023, when jobs were plentiful, we can be sure that the actual participation rate has not fallen since 2022, and has probably continued to rise. (We can disregard participation rates published in the HLFS; they are based on definitions of unemployment which only realistically apply to men aged 30 to 60. There is much 'hidden unemployment' amongst older women.)
For women aged 55-59, we see a rise in labour market activity from 43 percent to 80% in 2018 and 2023. For women aged 60-64, we see a rise in labour market activity from 18 percent to 70% in 2022. (The dip for this early-sixties age group in the late 1980s and early 1990s is unemployment masquerading as 'retirement'.)
For women aged 65-69, we see a rise in labour market activity from 8 percent to 44% in 2022. For women aged over 70, we see a tenfold rise in labour market activity from 1995 to 2025. (We desperately need a '70-74' age category in the published data; this 'early-seventies' cohort is likely to now be New Zealand's fastest growing employment demographic.)
Overall, this truly massive labour force participation of older women in the last thirty years has been a barely noticed social revolution. The increase of employed older women is even more dramatic than these figures look, because New Zealand's highest birth numbers were in the late 1950s and the early 1960s. These women are now in their sixties, and born with higher life-expectancies than their parents.
It seems unlikely that this increased labour force participation is a result of the rise of feminism in the 1970s; an increased advocacy for paid work was one plank of that feminism. Though feminism may have played a significant but lesser role in this huge social change. It seems far more likely that the main driving force is economic pressure upon households; stresses that have increasingly required all adult household members to be attached to the labour force, rather than the pre-1980s' emphasis on an individual (typically male) 'breadwinner'.
The stresses initially hit households hardest in the late 1980s through massive rises in mortgage interest rates, and in the more frequent revision of interest rates by banks during the lifespans of home loans. To that we can add an increased reliance on other forms of personal debt, such as credit cards. The ongoing stresses relate to both the increased precarity of paid work for men and women – meaning women increasingly having to make significant contributions to household budgets – and the failure of hourly wages to keep up with gross domestic product per capita. In order to be able to buy the goods and services which made up our GDP, we needed ever more hours of household labour.
Older households were able to hold out for longer against these pressures, but not forever. Hence, most of the increases of labour force engagement for these households have taken place in the last thirty years.
Older Women's Spending
What all this means is that, in the 2020s, a critical component of consumer spending is done by older households, and in particular older women. Their spending is a major source of 'stimulus' in the 2020s' economy. It is already apparent that suburban cafes, for example, survive very much with the help of patronage from groups of older women.
By and large, most policymakers worldwide have now forgotten the lessons of the Great Depression of the 1930s. One of the most important lessons was that countries which had inbuilt means to keep incomeless households spending suffered much less in the peak years – the early 1930s – of that Depression. (These countries included the United Kingdom and Sweden; they contrast with France and the United States, which were still in Depression in 1939.)
France in particular could not get out of that Depression. In part because of World War One deaths and injuries, it relied very much on immigrant labour (mainly from North Africa). It also relied on female and male urban labour from people with rural connections. So, when the Depression hit, the redundant workers – having no access to benefit incomes – simply returned to either Africa or to their parents' small farms.
Most of Aotearoa's older women cannot emigrate if they lose their incomes. But most of them will not be able to draw on a benefit to offset their lost wages. Some are already receiving New Zealand Superannuation, and that will rise a little as the marginal tax rates on their 'Super' will come down. What of those under 65 who lose their incomes, noting that many employed women age 55-64 live in households which pay mortgages or rent? Most will not qualify for an MSD benefit; they will be fully reliant on their partners' or adult children's wages. Some, who do qualify for benefits, will face stand-downs of several weeks or months; and time engaging with MSD that would be better spent with their grandchildren or elderly parents.
One particular group of older women is those, mainly in their early sixties, who used to be able to get a 'non-qualifying spouse Superannuation benefit', ie if their partners were superannuitant pensioners with minimal other income. (With zero fanfare, one of the first things the Labour Government did, in October 2020, was to cancel these women's entitlement to what was an important form of transitional income support.) These women, grandmothers in large part, are the 'breadwinners' in their senior households. If they lose their jobs (or their 'roles' as we are now supposed to say), that means a potentially catastrophic loss of household income. (We should note as an example that the New Zealand Polytechnic sector, currently undergoing significant restructuring and financial downsizing, has a particularly important portfolio of older female employees; many of these workers have substantial institutional memory, keeping their organisations functioning more than many of the younger managers appreciate.)
MSD should be focussed on helping young people to find paid work, and not having their resources logjammed by older women who would have previously had access to income support without red tape.
The Laws of Stimulus
The First Law of Holes, is 'stop digging'. (We note that a 'depression' is, literally, a hole.) Finance Minister Nicola Willis is digging furiously, burying alive suffocating Kiwis.
The first law of stimulus is to stop public-sector retrenchment. That is the main single lesson from the near-forgotten Great Depression. The second law of stimulus is to have rights-based alternative sources of income that individuals of all ages can fall back on. The third law of stimulus is to stop pursuing a monetary policy that jacks-up interest rates; the 'cost-of-living crisis' is substantially a 'cost of jacked-up interest rates' crisis. (As I have already noted, debt is something that drives more people into the labour force; it's not just the amount of debt, it's also the cost of that debt.)
We may note that New Zealand got out of the Great Depression by adopting all three laws of stimulus. And a fourth law, by using the cheap money to embark upon a very successful 'state housing' program, New Zealand recovered in 1936 to 1938 with double-digit economic growth and near-zero inflation. Some of those houses, well-built, are worth a fortune now. Fletchers and other capitalists made a fortune, too; this is the kind of stimulus which would meet Simon Bridges' business-perspective criteria. Homelessness was not acceptable to New Zealanders back then, as it seems to be now. Are we looking at a coming decade of escalating homelessness for older women?
When just about every adult is 'in the labour force' – unhidden or hidden – desperately needing income while employment 'roles' are in decline, the social stresses cannot be contained forever. Younger people may revolt, turning to the underclass-politics of the street. Older people are more likely to die unseen, as too many did in July 2022 (many denied desperately-needed second-booster vaccines) when the Covid19 pandemic really hit Aotearoa New Zealand.
Do any groups of influential people out there have the imagination and capacity to answer the call for humane economic revival? Or is it a case of those who would can't, and those who could don't?
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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.
Keith Rankin
Political Economist, Scoop Columnist
Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.
Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.
Keith retired in 2020 and lives with his family in Glen Eden, Auckland.