Commentary and analysis of labour force data releases.

Australian labour market – employment grows but overall still marking time

Today (June 13, 2024), the Australian Bureau of Statistics released the latest – Labour Force, Australia – for May 2024, which provides some increased clarity given the last few months have generated data that has been mixed in signal. The data for May 2024 shows employment continuing to increase, unemployment falling, and the participation rate steady. Taken together the demand-side of the labour market is running just ahead of the underlying population growth, although working hours are falling. Some clarity but it is still not absolutely clear which way the labour market is heading. The net change in employment was driven by full-time employment. But we should not disregard the fact that there is now 10.7 per cent of the working age population (1.6 million people) who are available and willing but cannot find enough work – either unemployed or underemployed and that proportion is increasing. Australia is not near full employment despite the claims by the mainstream commentators and it is hard to characterise this as a ‘tight’ labour market.

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Australian government proves it can end poverty, but refuses to, and is deliberately pushing more people into that state

The Australian – Productivity Commission – was created in 1998 as a result of an amalgamation between the Industry Commission (established 1990), the Bureau of Industry Economics (established 1978) and the Economic Planning Advisory Commission (established 1983). As you will read below, its antecedents go back to 1921. The Commission is one of many government-funded institutions that have undergone structural shifts over time as their initial role becomes redundant, a redundancy that reflects the changing dominant ideology of the time. It is now the government’s principal ‘free market’ think tank that spews out predictable nonsense regularly – always ending with recommendations for more deregulation and less government intervention. Its latest offering was released on Monday (May 20, 2024) – A snapshot of inequality in Australia – which, in its own words, “provides an update on the state of economic inequality in Australia, reviewing the period of the COVID-19 induced recession and recovery” with a focus on women, older people, and First Nation’s peoples. It contains some interesting analysis but falls short because its fiscal framework, upon which it makes assessments about the data that is made available, is mainstream and assumes the Australian government has financial constraints. Once they adopt that fiction, then the scope for policy is limited and we end up not solving the problems discussed.

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Australian labour market – mixed signals but probably still in a weakening phase

Last month’s Labour Force data release for April 2024, revealed that the Australian labour market was starting to weaken in the face of the fiscal squeeze (the government announced a second successive annual fiscal surplus on Tuesday) and the 11 interest rate hikes since May 2022. Today (May 16, 2024), the Australian Bureau of Statistics released the latest – Labour Force, Australia – for April 2024, which shows that there are mixed signals which make it hard to say categorically where things are or where they are going. Total employment growth was positive and the participation rate increased, which usually signals a strengthening labour market. But full-time employment fell and monthly hours worked were static. Further both the unemployment rate and the underemployment rate rose, which indicates weakness, notwithstanding the fact that the participation rate increase accounted for some of the rise in unemployment. Moreover, there is now 10.8 per cent of the working age population (1.58 million people) who are available and willing but cannot find enough work – either unemployed or underemployed and that proportion is increasing. Australia is not near full employment despite the claims by the mainstream commentators and it is hard to characterise this as a ‘tight’ labour market.

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Signs of weakening in the Australian labour market

Today (April 18, 2024), the Australian Bureau of Statistics released the latest – Labour Force, Australia – for March 2024, which shows that the labour market is weakening with employment falling and unemployment rising now that more normal patterns in behaviour after the holiday period disruption have returned. The good news is that full-time employment continued to rise but was more than offset by the loss of part-time work. The stronger full-time outcome meant that underemployment fell marginally. The rise in unemployment would have been worse had not the participation rate fell. The drop in both employment and participation is a signal of weakening. There is still 10.3 per cent of the available and willing working age population who are being wasted in one way or another – either unemployed or underemployed and that proportion is increasing. Australia is not near full employment despite the claims by the mainstream commentators and it is hard to characterise this as a ‘tight’ labour market.

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Growing evidence that Covid has incapacitated a huge number of workers with little policy response forthcoming

Regular readers will know I have been assessing the evolving data concerning the longer-run impacts of Covid on the labour force. As time passes and infections continue, our immediate awareness of the severity of the pandemic has dulled, largely because governments no longer publish regular data on infection rates, hospitalisations and deaths. So the day-to-day, week-to-week tracking of the impacts are lost and it is as if there is no problem left to deal with. But data from national statistical agencies and organisations such as the US Census Bureau tell a different story and I am amazed that public policy has not responded to the messages – mostly obviously that in an era where populations are ageing and the number of workers shrinking, we are overseeing a massive attrition rate of those workers who are being forced into disability status from Covid. It represents a massive policy failure and a major demonstration of social ignorance.

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Australian labour market – unemployment drops sharply – good news

Today (March 21, 2024), the Australian Bureau of Statistics released the latest – Labour Force, Australia – for February 2024, which shows that the weakening we observed over the holiday period has reversed and was probably due to variations in flow behaviour over the break that has become evident since the pandemic. As I noted in the January analysis, the changing holiday behaviour that has become evident (many people now working zero hours in January) makes it difficult to be definitive about the February result, which is excellent. Employment growth was strong as those zero-hour workers resumed work and the net job creation easily outstripped the rising participation rate. The drop in unemployment is a boost as is the drop in underemployment. However, there is still 10.3 per cent of the available and willing working age population who are being wasted in one way or another – either unemployed or underemployed and that proportion is increasing. Australia is not near full employment despite the claims by the mainstream commentators and it is hard to characterise this as a ‘tight’ labour market. The return to a 3.7 per cent unemployment – the level that was very stable in the period since mid-to-late 2022 makes a mockery of economists who think that interest rate hikes would always push up unemployment. And with unemployment and inflation falling, the current unemployment rate cannot be below some NAIRU, which also makes a mockery of the the RBA’s stated research and policy logic. The reality is that inflation has fallen as the supply factors abate and the interest rate hikes were totally unnecessary.

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E.P. Thompson and why class remains an important organising framework

I have been travelling for most of today so I have to keep this post short. Well shorter than usual. Edward Palmer Thompson – who died at the age of 69 in 1993, was a British writer who wrote the exceptional book – The Making of the English Working Class – which was a very long social history published in 1963, and considered essential reading for young leftists at the time. I read it in the early 1970s as part of my rites of passage into Leftist intellectual thought and while I prefer books that are less than 800 pages (-:, I found it absorbing. I was reminded of it when I recently read a UK Observer article (February 4, 2024) – What a legendary historian tells us about the contempt for today’s working class – by Kenan Malik.

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Britain’s future is being compromised by the massive increase in long-term sickness among the working age population

When I was in London recently, I noticed an increase in people in the street who were clearly not working and looked to be in severe hardship from my last visit in 2020. Of course, in the intervening period the world has endured (is enduring) a major pandemic that has permanently compromised the health status of the human population. The latest data from the British Office of National Statistics (ONS) – Labour market overview, UK: February 2024 (released February 13, 2024) – provides some hard numbers to match my anecdotal observations. Britain has become a much sicker society since 2020 and there has been a large increase in workers who are now unable to work as a result of long-term sickness – millions. Further analysis reveals that this cohort is spread across the age spectrum. A fair bit of the increase will be Covid and the austerity damage on the NHS. Massive fiscal interventions will be required to change the trajectory of Britain which not only has to deal with the global climate disaster but is now experiencing an increasingly sick workforce, where workers across the age spectrum are being prematurely retired because they are too sick to work. With Covid still spreading as it evolves into new variations and people get multiple infections, the situation will get worse. It is amazing to me that national governments are not addressing this and introducing policies that reduce the infection rates.

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Australia labour market – weakening under the brunt of poor policy, 10.7 per cent underutilisation rate

Today (February 15, 2024), the Australian Bureau of Statistics released the latest – Labour Force, Australia – for January 2024, which confirms a weakening in the labour market. The signs of a slowdown were appearing in late 2023 and the January figures probably confirm that trend, although the changing holiday behaviour makes it difficult to be definitive. We will know more next month when the holiday period effects wash out. Employment growth was unable to even keep pace with the underlying population growth, which is why unemployment rose with participation constant. The best indicators that the labour market is weakening are the fall in the employment-to-population rate since November 2023 (down 0.5 points) and the sharp decline over the last few months in hours worked. It also appears that the slowdown is impacting teenagers disproportionately. There are now 10.7 per cent of the available and willing working age population who are being wasted in one way or another – either unemployed or underemployed and that proportion is increasing. Australia is not near full employment despite the claims by the mainstream commentators and it is hard to characterise this as a ‘tight’ labour market.

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RBA is now a rogue organisation and the Government should act to bring it back into check

Yesterday (February 6, 2024), the Reserve Bank of Australia (RBA) released its so-called – Statement on Monetary Policy – February 2024 – which is a quarterly statement that “sets out the RBA’s assessment of current economic and financial conditions as well as the outlook that the Reserve Bank Board considers in making its interest rate decisions”. It accompanied the latest decision by the RBA, which held the policy target rate constant at 4.25. However, the Governor told the press that they had not ruled out further rate rises despite the inflation rate falling quickly and strong indications that the economy is slowing rapidly. Just yesterday, the ABS released the latest – Retail Trade, Australia – for December 2023, which showed that volume trade is down 1.4 per cent over the last year. In the September-quarter 2022, growth in volume was 9.8 per cent (a sort of pandemic overshoot after the restrictions were eased). By the December-quarter 2023, the volume growth was minus 1 per cent, the third consecutive quarter of negative volume growth. It would be totally outrageous for the RBA to consider further hikes. But it has become a rogue organisation and its statements reveal how deviant its reasoning has become.

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