Will there be enough jobs around as more people start to look for work?

As Australia's economy picked up our workforce hit a new high in December with more jobs available but with more people looking for work it's possible there won't be enough jobs to go around.

The latest Roy Morgan employment series data shows that there were over 12.6 million Australians employed in December (up 210,000 since November) and 1.72 million (up 44,000) are unemployed (up 0.1% to 12.0% of the workforce).

• The workforce increased to a new record high in December of nearly 14.4 million
  The workforce in December was 14,373,000 – comprised of 12,649,000 employed Australians and 1,724,000 unemployed Australians looking for work. The workforce was up by 254,000 as both employment increased (+210,000) and unemployment also increased (+44,000).

• Over 12.6 million Australians were employed in December – the highest since early March:
  12,649,000 Australians were employed, up 210,000 from November – driven by increases in NSW (up 103,000) and Queensland (up 168,000) while other States were little changed. There was an increase in full-time employment up 53,000 to 8,151,000 and part-time employment, up 157,000 to 4,498,000.

• Unemployment increased in December as Australians joined the workforce:
  1,724,000 Australians were unemployed (12.0% of the workforce), up 44,000 from November. There were more people looking for full-time work, up 18,000 to 797,000 and part-time work, up 26,000 to 927,000.

Roy Morgan’s unemployment figure of 12.0% for December is significantly higher than the current ABS estimate for November 2020 of 6.8%.

However, the ABS figure for November counts an additional 82,000 Australians who were working zero hours in November for economic reasons as ‘employed’.

If these non-workers are added back the ABS unemployment estimate for November increases to in excess of 1.02 million (7.4%).

The ABS also claims there are an additional 1.3 million Australians (9.4%) under-employed for a total of 2.33 million unemployed or under-employed (16.8% of the workforce).

Under-employment up slightly in December as part-time employment hits record high:
In addition to those who were unemployed, 1.36 million Australians (9.4% of the workforce) were under-employed – working part-time but looking for more work. This was an increase of 73,000 on a month ago driven by an increase in part time employment that hit a record high of 4.5 million in December.

In total 3.08 million Australians (21.4% of the workforce) were either unemployed or under-employed in December, an increase of 117,000 on November as all key metrics rose including full-time employment, part-time employment and unemployment according to the latest Roy Morgan employment estimates.

Compared to early March, before the nation-wide lockdown was implemented, in December there were over 900,000 more Australians either unemployed or under-employed (+5.8% points).

Experts Opinion

Michele Levine, CEO Roy Morgan, says the results for December show an economy in recovery mode but with more Australians joining the workforce there aren’t enough new jobs:

“Roy Morgan’s unemployment measure for December shows 1.72 million Australians were unemployed (12.0% of the workforce) and an additional 1.36 million (9.4%) were under-employed.

“This is the first time since the initial shock of COVID-19 in March/April 2020 both measures have increased in the same month as Australians entering the workforce have led to increased employment, unemployment and under-employment. In total, 3.08 million Australians (21.4%) were either unemployed or under-employed in December – up 117,000 on a month ago.

“The results for December shows that as the Australian economy gradually re-opens – several border closures ended (at least temporarily) in the month – and as stimulus and support measures wind down there are many Australians keen to re-enter the workforce and find new employment.

“However, since the COVID-19 pandemic began to heavily impact Australia in mid-March there are now an extra 900,000 Australians either unemployed or under-employed which will make for a very competitive jobs market for those currently looking for new work.”

Unemployment drops in New South Wales and now clearly the lowest in the nation

A look at the trends on a State-based level shows unemployment dropping sharply by 1.8% to 8.6% in NSW in December as many new jobs were created (+103,000). There are now 384,000 people looking for work in NSW, down 80,000 on November, and a significantly lower unemployment rate than any other State.

Unemployment was virtually unchanged in Queensland at 13.2% as despite many new jobs being created (+168,000) they didn’t lower the number of Queenslanders looking for work which remained at 384,000.

The picture has darkened in Victoria which now has more people unemployed than any other State with 513,000 people looking for work in December, up 75,000 on November as the economy continues to open following a long period of lockdown. The unemployment rate has jumped to 13.2%, up 1.6% on November.

In both Western Australia and South Australia the re-opening economies saw increases in unemployment in December with the unemployment rate up 1.4% to 13.6% in WA and up 4.1% to 18.8% in South Australia.

The JobKeeper wage subsidy scheme has now been cut back to $1,000 per fortnight for full-time workers and $650 per fortnight for part-time workers and ends altogether at the end of March. According to the Australian Treasury there were an estimated 1.5 million employees Australia-wide receiving JobKeeper in the December quarter after an initial take-up of 3.6 million workers for the six months to September.

There have been calls for an extension of JobKeeper past the March quarter but the Federal Government appears committed to ending the scheme and Treasurer The Australian Prudential Regulation Agency (APRA) claims businesses and consumers now have an additional $200 billion sitting in their accounts as rates of savings soared during the pandemic as Government stimulus payments increased and banks and financial institutions offered support to customers in financial stress.

The ending of JobKeeper in the next few months will place extra stress on many businesses in the June quarter and may well lead to an increase in unemployment in the months ahead as businesses closely assess which employees provide value to the business on an ongoing basis.

Michele Levine, CEO Roy Morgan, says the re-opening of the Australian economy has led to increases in all the key categories including full-time employment, part-time employment and unemployment as the participation rate soars to a near record-high of 68.1%:

“The Australian economy is slowly re-opening although it has proved to be a stop-start process over the past month with borders opening and closing between states seemingly every other day. A clear result of this re-opening is Australians re-joining the workforce in droves with a record high of nearly 14.4 million Australians now either employed or unemployed and looking for work.

“In December all key metric increased including full-time employment (+53,000 to 8,151,000), part-time employment (+157,000 to 4,498,000) and unemployment (+44,000 to 1,724,000). The unemployment rate increased slightly to 12.0% (up 0.1%) and as part-time employment rapidly increased the under-employment rate also increased to 9.4% (up 0.3%).

“The increasing workforce presents somewhat of a mixed picture because although there are new jobs being created – part-time employment is at a new record high and overall employment is now the highest it has been since early March – there are clearly not enough jobs to go around for all those looking for new employment.

“There is likely to be a continuing high level of unemployment over the next few months as Government stimulus such as the JobKeeper wage subsidy winds down and the repayment holidays offered by banks and financial institutions for mortgages and other loans are also ended.

“Looking at the States there is something to be said for the way New South Wales has handled the COVID-19 pandemic. Australia’s most populous State now has clearly the lowest unemployment of any State at only 8.6% in December. Next closest are both Queensland and Victoria on 13.2%.

“The New South Wales Government has been the most committed to keeping the economy open and operating as normally as possible throughout the pandemic and has only once closed its borders – when new local cases in Victoria spiralled into triple figures on a daily basis in early July.

“This measured approach of relying on excellent contact tracing and testing, and localised lockdowns such as in the Northern Beaches rather than blanket city-wide or state-wide lockdowns, has provided greater certainty to businesses that they will be allowed to continue operating without undue restrictions being imposed.

“The Federal Government has lauded the NSW response to COVID-19 as the ‘gold standard’ for protecting both lives and livelihoods and today’s Roy Morgan unemployment results show the balanced policy is paying off.

“The praise by Prime Minister Scott Morrison and Treasurer Josh Frydenberg of the NSW approach also suggests they remain committed to winding back Government stimulus over the next few months and pushing other States closer to the NSW model. The ending of stimulatory programs such as JobKeeper in the next few months is set to increase the economic (& employment) costs of lockdowns and border closures that other States have relied on heavily as part of their responses to COVID-19.”

Guest Author: This article was originally published by Roy Morgan Research - you can read the original article here

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