TRADES; SYDNEY; 970723; PICTURE BY PHIL CARRICK; AFR; NEWS; GENERIC. GENERIC!! PLUMBER, TRADESMAN, WORK PLACE, UNIONS, WAGES ETC.. Photo: Phil CarickAustralians are working less, even as more of us get jobs.
The latest labour force figures show an extra 97,400 Australians found work in March and April – 60,000 in March and 37,400 in April.
Over the two months taken together, the majority of the new jobs were full time – 62,400 versus 35,000 part time. Yet the number of hours worked per month fell by 1.1 million.
The change appears to have been caused by both full-time and part-time workers putting in fewer hours rather than a substitution of full-time for part-time jobs.
Over the past six months an extra 166,800 Australians found jobs – 101,400 full-time and 65,400 part-time – yet the hours worked per month slipped by 3 million, the Australian Bureau of Statistics figures show.
“More of us are working, but less work is being done. This shouldn’t be happening in a strongly growing economy,” said Macquarie Group economist James McIntyre. “The jobs growth we are seeing reflects hours being reallocated among workers rather than a real increase in demand.”
“The labour market is a lot weaker than the employment figures suggest,” said BIS Oxford Economics analyst Kishti Sen. “There is a lot of slack in the economy, which is weighing on wages growth and income tax collections, as well as household incomes and retail trade.”
The smoothed “trend” measure of employment and hours worked shows the divergence more starkly. Over the past six months an extra 120,000 Australians have found jobs, but the number of hours worked per month has fallen by 5.2 million.
The Reserve Bank highlighted “underemployment” as a key variable to watch in determining the outlook for interest rates in the minutes of its May board meeting released on Tuesday. It said that if workers were involuntarily working fewer hours it could indicate that they have little ability to force up wages. Wage growth stalled at an all-time low of 1.9 per cent in figures released on Wednesday.
The Bureau of Statistics will update its quarterly measure of underemployment next month. The most recent estimate, for February, shows 1.134 million Australians working fewer hours than they would like. This is an underemployment rate of 8.7 per cent, which when added to the unemployment rate of 5.9 per cent that month gave an “underutilisation” rate of 14.6 per cent.
The unemployment rate for April returned to 5.7 per cent, where it has been for most of the past 18 months.
“Overall there have been 166,800 jobs added in Australia over the last six months, while the labour force has increased by 191,500,” said Bill Mitchell, director of the Centre of Full Employment and Equity at the University of Newcastle. “Employment growth has failed to keep pace.”
NSW maintained a trend unemployment rate of 5 per cent in April after gaining only 700 new workers over the past six months. Victoria maintained a trend unemployment rate of 6.1 per cent after gaining 41,100 new workers.
The mining states of Queensland and Western Australia did particularly well, reporting trend unemployment rates of 6.4 and 6.1 per cent after gaining 41,100 and 31,100 workers respectively.
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