withdrawing super unemployed
(Image: AAP/Dan Peled)

Australia’s jobs recovery following last year’s COVID-induced recession is average — at least compared with the rest of the world. And compared with outcomes during the last global recession, it’s extremely poor.

So why aren’t we reading about it?

Mainstream commentators persistently refuse to examine Australia’s economic outcomes relative to the rest of the world. This eliminates any consideration of external headwinds or tailwinds — which are nearly always significant. It leaves the commentariat comparing this month’s outcomes with last month’s or, if that happens to be bleak, then with mythical “expectations”.

Hence The Sydney Morning Herald reported last week:

Callam Pickering, Asia-Pacific economist with Indeed, said policymakers would be ‘extremely happy’ with the improvements in the jobs figures, which show a recovery well ahead of expectations.

In fact, Australia’s 6.6% jobless rate in December ranks a dismal 17th among the 37 wealthy, developed members of the Organisation for Economic Cooperation and Development (OECD). This is nowhere near the leaders, which is where Australia should be.

Australia’s 6.6% was only slightly below the OECD average of 7.6%, and a long way from Japan, Switzerland, the Netherlands and the Czech Republic which are at 4% or lower. Eleven countries are below 5%.

During the recovery from the global financial crisis 10 years ago, Australia was consistently in the OECD’s top echelon, ranking a creditable third in December 2010.

Australia’s 4.88% then was bettered only by Norway and South Korea. It was almost half the OECD average of 9.01%.

If Australia still ranked third in the OECD — which it should — unemployment would be between Switzerland’s 3.5% and the Netherlands’ 3.9%.

In this scenario, a jobless rate of about 3.7% (instead of 6.6%) would reduce the number of unemployed people to 511,000 instead of the current 912,000. That’s another 401,000 people in productive paid work, another 401,000 families freed from poverty and anxiety. And far less government debt required to provide jobless benefits.

There are several other stats like this in the latest jobs report that the Morrison government doesn’t want highlighted — and most mainstream economics reporters seem to have obliged.

Youth and young adult jobless

Younger Australians have been particularly badly hit by the economic mismanagement over recent years.

The number of unemployed aged 15 to 24 has increased for the past three months straight and is now above 314,000. The youth jobless rate is now 14.6%, compared with 12.3% at the 2013 election.

Australia’s ranking on youth jobless rates within the OECD fell from eighth in 2012 to 11th in 2014, to 14th in 2015, to 18th in 2017. It is now down to 20th — at or close to the lowest ever.

Older Australians forced back to work

The number of workers above the retirement age back at work has escalated in the last two years, as incomes of pensioners and other retirees have been gradually whittled away.

This is highly disadvantageous to those who have earned time with their grandchildren after a lifetime working. It also harms younger workers for whom fewer jobs are available.

When the Coalition took office, only 386,600 workers over 65 were in the workforce. This leapt above 500,000 in late 2017, then above 600,000 in mid-2019. It peaked at 619,000 in November 2019 and is only marginally below that now at 616,000.

Relative to the population, this has risen from 11.6% in 2013 to peak at 15.1% and settled back at 14.5% in the latest survey.

Long-term unemployed

In 2013, workers who had been unemployed for more than a year numbered 133,100. This is now 186,600. That’s up 40.2%, whereas the adult population has increased by just 11.5%.

The 133,100 long-term jobless under Labor came to 19.5% of all jobless Australians. The current rate is 21.3%.

Australia is one of only three OECD countries in which the long-term jobless rate has increased over the last five years instead of decreased. The others are Turkey and the United States.

Serious management failure

There is no excuse for Australia to be lagging the rest of the developed world so badly on jobs.

Australia’s export sector is in a near-record boom with iron ore prices at nine-year highs and volumes at all-time highs. Gold prices are close to fresh records, wheat is at a seven-year high price, there is strong demand for wool, and excellent prices and volumes for other commodities.

The trade surplus has been above $5 billion for the last three months and has averaged a thumping $5.88 billion for the last 12 months — the highest year ever.

If more of Australia’s wealth was retained in Australia instead of being shipped offshore tax-free, indicators of the health of the domestic economy would be much higher — and we would return to the top of the global tables.