Despite employment being at record high, over 2.5m looking for ‘more’ work

We keep reading about all the new jobs that are being created and how unemployment has remained low and this is good for consumer confidence. 

And when you put your property investor hat on, jobs growth, employment and consumer confidence are in turn for our property markets. 

But is all this really true?

If everyone how wants a job has a job, why aren’t wages rising?

Maybe the ABS stats are not accurate.

I always find it interesting how the Roy Morgan employment figures are so different to the “official” ABS stats.

How they show a substantially higher unemployment rates (8.9% rather than 5.6%).

The latest data for the Roy Morgan employment series for March shows:

• The workforce is 13,584,000 comprised of employed and unemployed, up 373,000 on a year ago;
• A record high 12,374,000 Australians were employed in March – a large increase of 399,000 over the past year equal to an average of over 30,000 jobs added per month;
• The increase in employment year on year was primarily driven by an increase in part-time employment which rose 324,000 to a record high 4,431,000 while full-time employment was up 75,000 to 7,943,000;  
• Analysing long-term trends shows continuing strong growth in part-time employment driving overall employment growth with full-time employment also increasing although at a slower rate. Full-time employment hit a record high in February although has dropped slightly in March as students returning to study reduce their employment hours. Full-time employment has dropped in March for three years in a row;
• 21 million Australians were unemployed (8.9% of the workforce); a decrease of 26,000 (down 0.4%) on a year ago. In addition 1.36 million Australians (10.0% of the workforce) are now under-employed, working part-time and looking for more work, a rise of a large 258,000 in a year (up 1.6%);
• Roy Morgan real unemployment figures of 8.9% for March are substantially higher than the current ABS estimate for February 2018 of 5.6%

Source: Roy Morgan Single Source October 2005-March 2018. Average monthly interviews 4,000.

Michele Levine, Chief Executive Officer, Roy Morgan, said employment growth has been strong in the year to March driven by big increases in part-time employment to nearly 4.5 million people although full-time employment has also grown hitting a record high in February:

“Today’s Roy Morgan employment estimates show overall employment growth of 399,000 jobs since March 2017 with strong growth in part-time employment of 324,000 to a record high 4,431,000. Full-time employment was up 75,000 to 7,943,000, but down from a record high reached in February. 

"The strong growth in part-time employment over the past 12 months continues trends observed in recent years as Australia's workforce becomes increasingly casualised with the rise of the 'gig' economy headlined by businesses such as Uber, Deliveroo and Airbnb and the continuing strength of food and hospitality businesses which rely heavily on part-time employment.

"Despite the strong growth in overall employment over the past year there remain over 2.5 million Australians either unemployed (1.21 million) or under-employed (1.36 million) looking for work or looking for more work.

"Given the large number of Australians directly, or even indirectly impacted, by unemployment and under-employment it is no surprise that issues relating to unemployment, job security and the search for jobs is one of the key issues Australians mention unprompted when asked what the 'biggest problem facing Australia’ is early in 2018.

Read more at Roy Morgan Research

About Michael Yardney Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.