New Treasurer Scott Morrison continues to refer to the 300,000 new jobs created under the Coalition since its election in 2013.
He’s correct: 313,000 jobs have been created since September 2013, seasonally adjusted. Problem is, that’s not enough to keep up with population growth: the labour force has grown by over 400,000 in that period. The employment-to-population ratio has actually fallen fractionally, from 61.1% to 61%. And most of those additional jobs have been part time, not full time.
On the upside, the Coalition’s time in office has meant a halt to the steady slide in participation that we saw in the later years of Labor. It has now recovered from 64.7% to 65% — and that’s good news.
And in fact, the employment market is doing very well given our tepid rate of economic growth. That’s because it is flexible — flexible enough that soft growth has translated into lower wage growth rather than higher unemployment. That’s the conclusion of the Reserve Bank, which just yesterday — yet again — made a point of referring to how labour market flexibility and lower wages were “playing a more significant role in the adjustment of the economy to the lower terms of trade and the transition from the investment to the production phase of the mining boom than they have in previous episodes of structural adjustment”.
This flexibility is a result of Labor’s much-criticised Fair Work Act, rather than any specific policies of the Coalition, which has been too scared to touch industrial relations outside the construction industry since it was elected.
Morrison would be well advised to follow the approach proposed by the Productivity Commission’s draft review of the industrial relations framework — commissioned by the government itself — which suggested amendments to further enhance the flexibility of the Fair Work Act, but leave intact a system that is proving increasingly important in the economic transition currently underway.