There were three messages in the confusing jobs data for August that emerged yesterday from the Australian Bureau of Statistics. The headline number was dramatically better than any economist, or even the Reserve Bank or Treasury, had predicted.
The first is, despite the claims from the media and the Morrison government that the Andrews government’s lockdown was some profound act of economic vandalism, Victoria’s jobless rate only moved up to 7.1% from 6.8%, with 42,000 jobs lost in that state last month. Hours fell by 4.8% in Victoria, compared with a 1.8% rise across the rest of Australia.
Now there may well be another big fall in Victoria in the September data as the numbers catch up. There will be a clue in the ABS’s next payroll jobs and wages data next week.
But nationally the jobs market is proving resilient and showing the benefits of the government’s JobKeeper and JobSeeker spending: 110,000 jobs were added in the month, taking total employment above 12.5 million, back to where it was in July 2018, but still about 600,000 short of the level in March of this year.
Second, a major reason for such a good headline rate — 6.8% — is that participation barely moved, increasing just 0.1 point to 64.8%. That’s 1.4 points below its peak in 2019.
A higher participation rate means a higher headline unemployment rate and all the bad headlines that entails, but also means more people are looking for work and a stronger economy. The participation rate for <25s actually fell 0.3 points. That’s going in the wrong direction.
Third, the ABS was at pains to point out that nearly every single one of the 111,000 net new jobs created in August was of self-employed staff, not “normal” employees.
A few commentators have suggested this reflects a surge in gig economy workers — especially delivery workers — due to the Victorian lockdown. That two-thirds of the net new jobs were part-time seems to support this argument — plus the relatively small increase in hours worked.
That spike in gig economy jobs may not be a one-off. The debate about casualisation has flared again in the context of workers in precarious employment being forced to go to work while sick, and aged care workers being forced to work across multiple sites, increasing the risk of infection.
But employers may use the recession as an opportunity to outsource and casualise more where they can, particularly as retail shifts online and office work shifts to home.
Those 111,000 gig economy jobs may come to be much more like the new normal of the world post-COVID than the pre-COVID world, where the only noteworthy distinction between jobs was full-time and part-time.