Keep Australia working... for less money in more insecure jobs

The Coalition's catch phrases are all about creating more and better jobs for Australians — but how good is its record really? John Haly looks at the numbers.

The Turnbull Goverment, which has cut penalty rates, public services and taxes for corporations, have come up with a slogan to replace “Jobs and growth”. The new mantra is: “Let’s keep Australia working”.

The implication being a vote for Labor is a vote against your job. The question we need to ask is: “Has the liberal agenda succeeded in keeping Australia working or are job numbers declining and wages diminishing?”

Full-time / Part-time

In October 2017, Michaelia Cash promoted job growth as she claimed there were “371,500 jobs created over the last year, 315,900 were full time."

Referencing the ABS’s next month’s stats, Malcolm Turnbull later said:

New data shows another 61,600 jobs were created in November, lifting the number of new jobs this year to 383,300.” 

That may sound convincing and consistent. Of course, as other authors, such as Alan Austin, note: it is all a matter of strategically timing your announcement so the figures fit your case. Such as choosing a month where historically low employment featured the previous year to be compared with a better statistic this year. A slightly different choice of month or period may produce a different result. Statistical variations depend on the accuracy of the collection methods, such as the underlying definitions of employment and what dates are being compared. The ABS statistical methods for employment issues have come under considerable criticism, even from within its ranks. The ABS, however, does not engage in any statistical tampering or deception on behalf of the government. ABS methodology follows the ILO international protocols for measuring unemployment, although its methodology does have some faults.

ighly changeable variations in part and full-time employment

Highly changeable variations in part and full-time employment in Australia

Monthly deviations in full-time employment and part-time employment are significant and cherry picking dates can be misleading. Depending on what is your starting and ending point, you can show either rising or falling employment. What is notable is the increasing volatility in employment markets over the years.

So, are there alternative measures which use alternative criteria for measuring employment? Roy Morgan’s measurements are considerably more modest than the ABS stats Michaelia Cash and Malcolm Turnbull referenced. Their numbers for the November 2017 report show long-term job expansion is in part-time jobs, with declining full-time jobs. The figures provided show that full-time employment decreased 31,000 in the last year until November, whereas part-time employment rose by 70,000.

harting Roy Morgan''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''s analysis of employment and unemployment from 2007 to 2017.

Charting Roy Morgan’s analysis of employment and unemployment from 2007 to 2017

Roy Morgan’s measurements for employment and unemployment differs considerably to the ABS’s methodology, although its agrees that part-time and full-time employment is volatile. Morgan shows that part-time employment is growing faster than full-time as the job market is becoming increasingly casualised — a point even the RBA agrees with. Graphing these statistics over the last ten year shows a clear trend, which the ABS methodology obscures, while Roy Morgan’s method makes it easier to track. This methodology is also notable for tracking under-employment, or what the ABS calls “hidden unemployment”.

alling Full-Time V Rising Part-time as a % of the Workforce

Falling full-time vs rising part-time jobs as a percentage of the workforce

Employment numbers have risen, but so has the total labour workforce seeking or occupying employment. The problem is that unemployment and underemployment, according to Roy Morgan’s stats, were 2.394 million people in November 2017 (18.2%). Combined underemployment and unemployment haven’t been consistently below 2 million since 2011. One has to dig through ABS’s statistics for their underutilisation figures to see a similar pattern. Roy Morgan reports 9.8% unemployment and, for the ABS, it is 5.4% in November 2017. 

Using percentage figures in a growing labour force can be inherently deceptive. According to the ABS, our unemployment rate in Nov 2017 was at 5.4%. The last time it was at that rate was in February 2013. But in February 2013, that represented 660,000 people, by November 2017, 5.4% is 708,000 people. Taking Roy Morgan’s unemployment figures for Nov 2017, we have 9.8% or 1,288,000 people unemployed. The last time we were at 9.8%, in a similar time period to ABS’s 2013 figure, was August 2012, where 9.8% represented 1,205,000 people. In essence, 5.4% or 9.8% in 2017 isn’t equivalent to 5.4% or 9.8% in late 2012/early 2013. Whichever statistical methodology you reference, our labour market is worse off regarding raw unemployment numbers, casualisation and volatility than we were under the previous Labor administration.

Working Hours

Hours of work available for the employed market

Hours of work available for the employed is declining

But what about the hours worked by those who are employed? It would seem self-evident that if part-time work was rising faster than full-time, that hours worked would be reducing, which has long been the thesis of writers such as Alan Austin

I took a slightly different track with ABS data and charted hours worked as a function of just those employed, rather than demonstrating, as Austin does, that working hours available for the adult population is decreasing. No matter which way you look at it, it is evident that adequate working hours are less accessible both to employed and unemployed.

Job Vacancies

Ten years of job vacancy numbers for Australia

Ten years of job vacancy numbers for Australia

Job vacancies in comparison to unemployed job seekers have also been rising. While there has been a soft rise in vacancies available over time – since the Coalition came into power – it has been far below any measure of unemployed numbers (no matter the method). The job vacancy rate for the nation from the Government’s IVI (internet vacancy index) for November 2017 was 177,900. In the four years of the Abbott-Turnbull Governments, it has never risen above 180,000 and has been as low as 150,000.

Of course, not all vacancies (although most) are advertised online. 

The ANZ Bank, however, regularly tracks job advertisements, saying of the most recent figures:

'Job ads growth was 3.7 per cent year-on-year in December, a steep fall from 6 per cent in November. In trend terms, the numbers looked a bit better at 4.7 percent year-on-year, but this was down sharply from 9.4 percent annual growth in early 2016.'

Fortunately, Trading Economics has already factored in these adjustments, reporting:

Job Vacancies in Australia increased to 201.30 Thousand in the third quarter of 2017 from 189.20 Thousand in the second quarter of 2017."

Despite the increase, 201,000 job vacancies hardly make a dent in 1,288,000 unemployed people, let alone 2.394 million under-employed and unemployed persons seeking jobs in Australia.

Wages

age rates treading water over CPI rate increases

Wage rates treading water comparied to CPI

Well, at least the employed get paid, you may say. Unfortunately, there the news gets worse. 

Wage rate growth continues to stagnate to levels unseen in this century — down as far as 1.9% in the previous quarter. While there is still growth, the question needs to be: Is the growth rate keeping up with that of the CPI (consumer price index? The answer on the surface is “barely”. ABS statistics graphed here show that it is only just keeping its head above water. The CPI is widely criticised for “excluding home purchase costs“. In a country where private debt towers over GDP by 122% and housing affordability limits access to homes, this is a significant omission.

The ABS does produce cost of living indices, which consider the cost of living according to your source of income – wage, pension, or government benefits“, states the Guardian’s Greg Jericho. Once you add the real cost of living factors,one quickly realises that wages are not keeping up with the actual costs of living.

Job Losses

Job losses for specific industries under the instigation of the coalition will have long-term consequences for our economy. 

Some of these include:

  1. Abbott and Hockey’s dismantling of the car manufacturing industry in this country, in preference to imports from China, Korea and Japan, saw the end of jobs for thousands of workers, with estimates from 90,000 to 200,000 job losses. Hockey had admitted in Parliament that “Ending the age of entitlement for the industry was a hard decision, but it needed to be made because as a result of that decision we were able to get free-trade agreements with Korea, Japan and China.’’
  2. The Government continues to seek means to support a diminishing mining industry and supply $1 billion to the Adani Mine. Mining employment is contracting, but it is being promoted at the cost of a tourism industry that employs more than twice the number of people. The tourism sector has the more significant potential for job creation than the mining sector.
  3. The Coalition has overseen one in ten public servants losing their jobs, while spending on consultants has risen by $300 million. Amongst those civil servants, the Tax Office has divested itself of 4,400 employees and their expertise in keeping tax avoidance in check, so private companies could stash money overseas, whether acquired via profits or tax cuts, rather than use it to employ more people in Australia.

Conclusion

Claims by the Turnbull Government that their success in managing an economy that has produced employment are highly questionable and lack substance. Whatever the Coalition is doing, it is most certainly not keeping Australia working.

You can follow John Haly on Twitter @halyucinations or on his blog at auswakeup.info.

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License

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