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Fifteen turbulent years of Australia’s economy, in graphs

Bear with me. This graph, based on ABS data released last Friday, has an important story to tell. About the evolution of the Australian economy and its politics since the end of the Keating era.

I’ve converted the raw numbers of workers in each sector into proportions of all employment, giving an indication of the relative importance of sectors when it comes to employing Australians. This graph covers all employment  — men, women, full-time, part-time.

Let’s go back to 1994. It’s the final term of the Labor Government. Paul Keating is running the country in his pyjamas from the Lodge, in between various “_____ Nation” big picture announcements. The major economic reforms of the late ‘80s and early ‘90s are still rolling through the economy, and Keating’s competition policy agenda has yet to really get going.

The retail sector is the biggest employer, but manufacturing was nearly as big, employing over 14% of Australian workers and dominating full-time employment. Agriculture still employs 5%. The professional services sector is confined to areas like law and accountancy  — the explosion in consultancies and outsourced services is yet to happen. And despite our love affair with housing, construction only employed around 7% of Australians.

Fast forward fourteen years. The Howard era has come and gone and the long economic boom of the noughties has collapsed in crisis. Now, retail is still king in employment even though it has suffered vicissitudes, particularly after the introduction of  the GST, but is employing the same proportion of Australians as a decade and a half ago — still nearly a quarter of all part-time jobs are in retail.

Construction has surged toward 9% of workers, despite widespread outsourcing of government construction and significant increases in productivity that have reduced the need for workers on big projects — which is why retail and construction were cluster-bombed with cash in the Government’s stimulus packages over the past nine months.

Meantime, manufacturing  — despite billions of dollars wasted by both sides of politics propping up the unviable Australian car industry  — has slumped toward 10% of workers. The collapse in full-time employment has been even greater. Under Keating, manufacturing was the big full-time employer, at 17%, but last year it was barely 13%.

In 1994, the first wave of tariff cuts had washed through Australian manufacturing, combining with the recession of the early nineties to strip out tens of thousands of jobs. But that was merely the start of its extended decline. By the early part of the decade, professional and business services had overtaken it  — and that was before the mining boom sucked more workers out. The mining sector  — capital-intensive and relatively stable for a decade —  began pulling in workers, particularly full-time workers, at a rate of knots after 2003.

And agriculture, never a large employer, began going seriously downhill at the turn of the century, on a converging track with mining.

The changes describe political as well as economic fortunes. The National Party found no alternative to clinging to agriculture and accordingly faced declining economic relevance and voter support, particularly in the face of the mining boom  — as De-Anne Kelly could attest. The growth of construction, which recently overtook manufacturing as an employer of males, failed to replace the heavily-unionised ranks of the manufacturing sector, while professionals and business services employees had minimal interest in the traditional union movement.

The public sector, usually a bastion of unionism, lost people in the late 1990s but regained its strength under the Howard Government to return to its 1994 level, albeit with much higher levels of part-time employment as “work-life balance” became the public sector mantra.

Australian women’s employment changed significantly. Now, as 14 years ago, retail and health and community services dominate, but the latter has now broken free and is closing on 19% of all female jobs. Property and business services has gone from 9% to 12% for women, and public service has increased off a low base. But the most significant change for women has come in the professions. While the glass ceiling remains apparently impervious to all efforts to break through, female professional employment has surged, with 36% of female workers now in a profession or associate profession, compared to 30% of men.

And if you want to see a real ticking demographic timebomb, here’s the age profile of Australian workers over the last sixteen years.

Now for onefinal aspect of job creation over most of the last two decades: a state-by-state breakdown of employment. Queensland has been the employment powerhouse of this decade; for reasons that aren’t clear, its long-term rate of growth accelerated rapidly after 2003, carrying it over one-fifth of Australian workers. Western Australian is only at the start of a similar growth spurt. Contrarily, if you needed any confirmation of just how wretchedly awful NSW’s Labor Government has been, look what happens from about 2003 onwards. By the time it goes to the polls next year, the Premier State will be nearing a decade of employment stagnation.

It will take a very long time to turn that line around  — if it ever can be.

5
  • 1
    Mark Duffett
    Posted Tuesday, 7 July 2009 at 2:08 pm | Permalink

    I know Tasmania’s small, but surely not so small as to be invisible at this scale?

    Otherwise, some very nice graph porn, thanks BK.

  • 2
    Evan Beaver
    Posted Tuesday, 7 July 2009 at 2:58 pm | Permalink

    Agreed, no need for me to ‘bear with you’ on this BK. A thoroughly informative and properly investigated article. Must be the first journalism ever included on Crikey? (if you believe Hartigan).

    The massive decline in manufacturing is not just a hunch here either. I’d heard mention of it and never seen the numbers, but, well, there you go. I would argue that the rise of China is a large part of the reason?

    But yes, great article, and good to see some graphs for a change.

  • 3
    Roger Clifton
    Posted Tuesday, 7 July 2009 at 4:46 pm | Permalink

    Calling our ageing population a timebomb appears to assume that age pensions are paid from the income tax of youngsters. If however, we tax the economy directly, such as GST or carbon tax, the threat vanishes.

  • 4
    Bernard Keane
    Posted Tuesday, 7 July 2009 at 6:04 pm | Permalink

    I’ll cop to the criticism from Taswegians. Indeed, Eleri from Crikey queried me too. But… too small and didn’t actually change - I think the change in 17 years was 0.1%.

  • 5
    John Molloy
    Posted Wednesday, 8 July 2009 at 10:45 am | Permalink

    I know NSW is a problem, but the graphs are not corrected for population changes Queensland for example has had a relative increase in population compared with NSW. That’s why they are gaining federal seats, and we are losing them.

    The NSW problem is not as bad as it appears here.

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