Unemployment figures suit Turnbull, but not those seeking full-time work | Greg Jericho

Figures mask stalled employment growth because of those who’ve stopped looking, which is handy in an election campaign

Malcolm Turnbull certainly seems to have picked the right date to call the election, because the latest employment figures suggest that employment growth has hit a wall – especially for full-time employment. But it won’t be much of an issue in the election since the unemployment rate has remained stable purely because people have given up looking for work.

The big number from the May labour force figures released last week was that the unemployment rate remained steady at 5.7% – the same level as at the 2013 election:

 

But the unemployment rate disguises the actual picture of the employment situation, which has deteriorated rather drastically since the end of last year.

In May total employment grew by just 3,700 (0.03% in trend terms) – the weakest performance since October 2013. Full-time employment fell by 0.11%, making it the fourth month in a row where full-time employment has gone backwards.

Also going backwards were the hours worked. That dropped by 0.14% – making five months in a row of falling full-time work. The only good news was that part-time employment rose by 0.3%, but even this is off its peak:

 

The growth of part-time employment – and the very poor full-time employment growth in keeping with the growth of employment under the Abbott/Turnbull government.

Since September 2013 full-time employment has grown by 183,000 while part-time employment has increased by 285,100. So although 68% of people work full time, the share of full-time employment has made up just 39% of employment growth since the last election.

The greatest disparity is male full-time employment which accounts for 44% of all people employed, and yet which makes up just 13% of new jobs since September 2013:

 

This greater growth of part-time employment is something that began early in 2013 and has been exacerbated throughout the Abbott/Turnbull government:

 

This growth of part-time employment is something that has particularly affected prime-aged workers between 25 and 64.

Full-time employment growth for prime-aged workers has actually been worse under the Abbott/Turnbull government than under the Gillard government:

 

Part-time employment has been much stronger under Abbott/Turnbull.

Youth employment has also done better under the Abbott/Turnbull governments but again this is very much supported by part-time employment, with full-time youth employment falling since September 2013 (just not falling as badly as during the Gillard government years):

 

The overall picture however remains one where employment growth is coming to a halt. The annual growth of hours worked is now down to just 0.5% – the slowest since the start of 2013, and it not an arbiter of good times ahead:

Malcolm Turnbull is fortunate that the poor employment growth has not flowed through to a higher unemployment rate.

Largely the steady unemployment rate is due to the decline in the proportion of people in the labour force. In November last year the participation rate was 65.2% (seasonally adjusted) and 65.1% (trend); in May it was down to 64.8%. Had the participation rates stayed the same that would mean in May there would have been around 57,000 extra unemployed.

Had that been the case the unemployment rate would be up to 6.2%:

 

Now this does not mean the unemployment rate is false, but just that when we grab the big number, as is the case with the GDP, it pays to look at what is underneath the headline.

Because we mostly judge the employment situation by the unemployment rate, last Thursday’s figure neutered the issue in the election campaign. It’s tough for the ALP to make the case things are bad but there’s also not a lot for the government to brag about when the unemployment rate is the same as it was in September 2013.

But the full-time employment issue is one that deserve much more focus than it currently gets. Yes the flexibility in the industrial relations system allows for a fall in hours worked that does not see a similar fall in employment. That happened in the global financial crisis and also in 2012 but the general push towards part-time employment is one that is also a longer term issue.

Since November there has been a sharp drop in the average hours worked per adult and it’s now at the lowest level since the 1990s recession:

That doesn’t mean our employment situation is as bad as then but because of the ageing population and the increase in part-time labour, the number of hours worked per adult in November 1993 when the unemployment rate was 10.7% is the same as now when the unemployment rate is 5.7%.

And given income and by extension income tax is linked more closely to hours worked rather than total jobs, it means we need more people working than in the past to achieve the same national level of hours worked.

And with greater reliance upon part-time work also comes the concern of less job security and less ability to provide a living income.

At the last election Tony Abbott pledged 1m jobs in five years – I doubt anyone would have gotten too excited had he added “and nearly two-thirds will be part-time”.

Part-time employment growth is not necessarily a bad thing – it is very good for young workers and for those raising children or studying. But an economy is always strongest when full-time employment is growing strongly. Right now that is not the case at all.

Contributor

Greg Jericho

The GuardianTramp

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