Economy

Apr 23, 2018

Weakening jobs market bodes poorly for wages

The strong jobs growth of 2017 is now in the rear-view mirror, meaning wages growth is unlikely to pick up. But workforce participation is at an all-time high.

Bernard Keane and Glenn Dyer

Politics editor / Crikey business and media commentator

It's now clear that the strong jobs growth the government has presided over since 2016 is coming to an end. The question is whether we're entering a significant slowdown, or merely reverting to the lower, but still solid, level of growth that preceded it. Neither outcome is good news for wages growth.

Last week's March jobs data from the Australian Bureau of Statistics showed that trend employment increased by 14,000 in March. That's an increase of 0.11%, which was below the monthly average growth rate over the past 20 years of 0.16%, and the lowest monthly growth rate observed since December 2016. In December 2017, the ABS recorded 25,000 new trend jobs. In January this year, 23,000, February 18,000. Now 14,000 -- the pattern is obvious. Trend full time jobs have fallen more noticeably -- from 16,600 last December to just 1,000 in March. Trend part time work has risen from 8,800 new jobs in December to 13,000 last month.

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8 comments

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8 thoughts on “Weakening jobs market bodes poorly for wages

  1. Dog's Breakfast

    Apart from the direct employment of public servants and more likely, contractors/consultants, the government can no more claim credit for jobs growth than I can claim for the earth going around the sun.

    And with continued high immigration, there is no pressure to increase wages. Record employment is barely enough to soak up the existing and entering, so our official unemployment rate is intractable locked just under 6%, and our real unemployment/underemployment rate is a serious problem, hidden in the figures.

  2. Marcus Hicks

    Trend unemployment is still higher than what it was during the 6 years Labor were in office…..& they had a GFC to contend with.

  3. Marcus Hicks

    According to this site below, peak participation rates occurred under Labor, when they hit 65.6%-65.8% for three consecutive months. Indeed, participation rates remained above 65% for the bulk of 2008-2013. Again, in spite of a GFC.
    By contrast, most of the period of 2014-2017 saw participation rates of *below* 65%…..yet still unemployment rates remained higher than 5.5%. So much for the “better economic managers”

    https://tradingeconomics.com/australia/labor-force-participation-rate

  4. Michael

    With low wage growth and higher housing costs, is it any wonder that participation rates have grown? The government might be pleased by increased employment participation, but we should all be concerned about its cause…

  5. Kenneth Piaggio

    “The jobs boom may come and go, but the government ‘can be proud that it has reversed that'”. Proud of which part – reversing the coming or the going?
    I am not sure I would have called a ‘jobs boom’ when the underemployment and the unemployment is still so high; with employment threshold still at only an hour per week, the hours being worked, in spite of more jobs, have not increased by much, and the jobs growth is mainly in one sector which in turn was a sector – NDIS – that was initiated by Labor.
    The available job numbers are increasing (and the percentage of those unemployed decreasing) because of the increase in population. The people leaving the work force – retirement etc. – also contribute to the number of jobs ‘created’.
    The main contribution from ‘immigration’ is from the massive number of people coming on temporary 457 work visas where, supposedly, there are no Australian workers with the training to do the jobs. (All an employer has to do in interview a few people and claim no one was suitable and then employ people from overseas at a lower salary – again another way to keep salaries/wages low)

  6. AR

    As suggested above, to measure a jobs boom by how many people are counted employed but starting with the absurd one hour a week is something only a statistician could think relevant.
    Not wanting to shoehorn or nuttin but, between phony, or downright misleading, U/E figures plus under employment plus high immigration & 457 abuses, we need also to consider nonsense, make work jobs.
    Seriously, paper shuffling or whatever is the digital equivalent causes more waste & mismanagement of resources that it makes UBI look profitable.
    Trying to recycle misses the point of not making, or using, or demanding the crud in the first place.
    If you prefer free time to things, or some balanced ratio of the two, just consider what jobs are simply pointless.
    The current economy is a lot of people taking in each others laundry and making a profit.
    Apparently.

    1. klewso

      I don’t understand why we don’t have “full employment” – our bodies are working when we breathe.

  7. Peter Wileman

    I’m sure Michaelia Cash will explain it all – when they allow her out again. (Cod forbid)

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