Jobs in Australia: From bad to disastrous with no relief in sight

Let's call it for what it is - the Turnbull Government is lying to us about jobs and growth. Just as the "budget emergency" went missing so, too, is poor old Jobson Growth now MIA.  

Australia’s employment situation has worsened significantly according to Thursday’s April numbers from the Australian Bureau of Statistics (ABS). Media outlets which describe it as “steady” or “flat” are spinning like Nathan Lyon. Those suggesting “jobs growth”, “jobs rise”, “an encouraging outcome” or an “upbeat” result are lying to you.

Yes, the headline number for the jobless was 5.7%, which seems relatively benign. But it ignores the reality that 5.7% today is equivalent to 6.3% three years ago. Or 10.8% twenty years ago. (Seasonally adjusted figures are used throughout.)

This is because there has been a significant shift among Australian employers away from full-time employees to part-timers and casuals.

To illustrate this, imagine a company employing 100 full time staff on 40 hours a week. That’s 4000 hours paid work contributing to the economy. And generating wages. Imagine then, that a restructure replaces those 100 with 200 part timers working 15 hours a week.

What happens to the actual work the company is providing? Down from 4000 to 3000 hours per week. But what happens to the ABS job numbers? Doubled!

This has been happening across the economy gradually for many years. It has accelerated in recent months. It is not highlighted in the ABS data, but can be measured by tracking the ABS part-timer numbers over time.

Through the 1950s, 60s, 70s and early 80s part-timers and casuals made up less than 17.5% of the workforce. This climbed to 20% through the Hawke/Keating period when the economy was restructured, then just above 24% by the time Labor yielded to John Howard in 1996. The rise continued until 2001 when it plateaued for several years around 28%. It clicked over 29% in 2009, and fluctuated within two points of that until last September.

About then, the shift to part-timers and casuals appears to have accelerated, with new all-time highs reached in September and again in every month this year. The April number, based on ABS data released this week, is 31.35%.

So clearly, the paid work the economy is generating today with 5.7% of the population unemployed is not the same as it was in mid-2013 when the rate was also 5.7%, or in mid-2009, let alone earlier decades.

Is there a more accurate measure of real employment? Yes, there is - although the ABS does not go out of its way to present it. The ABS does show monthly hours worked (Table 19, column C) and also the number of working age people. (Table 1, column DI). By collating the two we can get a pretty accurate measure of hours worked per month per adult in the population.

This reveals the current situation is actually the most dismal since September 1993, when the headline unemployment rate was 10.8%. It shows the average monthly hours worked is now down to just 82.78.

Throughout the Rudd/Gillard/Rudd period, monthly hours worked per adult ranged between 90.5 and 84.5. The range in the headline jobless rate back then was between 4.0% and 5.9%. Since then, the hours worked per adult has dropped steadily. It dipped below 84 for the first time since 1994 last September, then below 83 for the first time since 1993 in April.

Triangulation suggests that the rate today is equivalent to about 6.3% during the Labor years.

Meanwhile, most of the rest of the world is steadily generating more and more work as recovery from the global financial crisis gathers pace. Tradingeconomics.com records the monthly jobless rates for 29 developed OECD economies. Of these, 19 had lower jobless rates in the latest month compared with the month before. Only three had higher figures, while seven, including Australia, recorded no change.

Hence when Turnbull Government ministers assure us that they are delivering “jobs and growth” – as Mathias Cormann did yesterday and most Coalition MPS do daily – they are lying.

The mantra “jobs and growth” may well be a noble ambition for the future. It has not been Australia’s reality for the last two and a half years.

Jobs in Australia: From bad to disastrous with no relief in sight