Commentary and analysis of labour force data releases.

Australian labour market – remains in a sluggish state

The latest labour force data released today by the Australian Bureau of Statistics – Labour Force data – for January 2017 shows total employment barely increased for the second month in a row and Australia’s status as a part-time employment nation firms. Over the last 12 months, Australia has lost 56.1 thousand full-time jobs (in net terms) and added only 103.4 thousand overall. This status as the nation of part-time employment growth carries many attendant negative consequences – poor income growth, precarious work, lack of skill development etc. The teenage labour market remains in a poor state but improved slightly in January. It requires urgent policy intervention. The unemployment rate fell by 0.1 points but only because the labour force contracted as participation declined. In other words, hidden unemployment rose while official unemployment fell. Not a win-win. Overall, the Australian labour market is weak and showing no signs of improvement. With weak private investment now on-going and real GDP contracting (in the September-quarter), the poor outlook signals the need for a policy shift biased to expansion. It is clear that the current restrictive fiscal policy position adopted by the Federal government is not sufficient to redress the inadequate non-government spending growth.

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Back to the future – employment freezes – they only degrade services

A report in the The Washington Post (January 23, 2017) – The Trump administration just told a whopper about the size of the federal workforce – caught my attention earlier this week because it cut across some work I had been doing on public employment. The headline is self-explanatory – the accusation was that Sean Spicer lied in his first press briefing following the inauguration of the new President. The reporter in question (Christopher Ingraham) promoted his article with a Tweet and accompanying image which was then circulated widely on the Internet. The graph is what attracted my attention given that I rarely read the Washington Post, since it sold pages to the likes of Peter Peterson and allowed propaganda to parade as news. In this case, the problem was that the graph provided was highly misleading and didn’t refute anything that Sean Spicer had said about US federal government employment. Spicer had lied. But the Washington Post tweet didn’t prove that. This failing highlights an often-made confusion in the public – the difference between proportions and levels and the way graphs can lure us into wrongful conclusions. The sort of puzzle that young students in statistics are taught to work through. The other point is that employment freezes degrade public services and end up not saving cash anyway.

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Australia – weak employment growth, rising unemployment – need for policy shift

The latest labour force data released today by the Australian Bureau of Statistics – Labour Force data – for December 2016 shows total employment barely increased and the ABS said the trend to part-time work remains. Over the last 12 months, Australia has lost 34 thousand full-time jobs (in net terms) and added only 91.5 thousand overall. This status as the nation of part-time employment growth carries many attendant negative consequences – poor income growth, precarious work, lack of skill development etc. The teenage labour market remains in a poor state and went backwards in December. It requires urgent policy intervention. Overall, with weak private investment now on-going and real GDP contracting (in the September-quarter), the Australian labour market is weak and there needs to be a policy shift. It is clear that the current policy position adopted by the Federal government is not sufficient to redress the inadequate non-government spending growth.

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All net jobs in US since 2005 have been non-standard

The Australian labour market has been characterised over the last 12 to 24 months by the dominance of part-time employment creation with full-time employment contracting. Over the last 12 months, Australia has produced only 84.9 thousand (net) jobs with 107.2 thousand of them being part-time jobs. In other words, full-time employment has fallen by 22.2 thousand jobs over the same period. This status as the nation of part-time employment growth carries many attendant negative consequences – poor income growth, precarious work, lack of skill development to name just a few disadvantages. Further, underemployment has escalated since the early 1990s and now standard at 8.3 per cent of the labour force. On average, the underemployed part-time workers desire around 14.5 extra hours of work per week. If we look at the US labour force survey data quite a different picture emerges, which is interesting in itself. Does this suggest that the US labour market has been delivering superior outcomes. In one sense, the answer is yes. But recent research based on non-labour force survey data (private sampling) suggests otherwise. That research finds that “all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.” That is, standard jobs have disappeared and are being replaced by more precarious, contract and other types of alternative working arrangements. The trend in the US has not been driven by supply-side factors (such as worker preference) but reflects a deficiency in overall spending. Not a good message at all.

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Australian labour market – weak and in need of fiscal stimulus

The latest labour force data released today by the Australian Bureau of Statistics – Labour Force data – for November 2016 shows total employment barely increased and the ABS said the trend to part-time work remains. Over the last 12 months, Australia has produced only 84.9 thousand (net) jobs with 107.2 thousand of them being part-time jobs. In other words, full-time employment has fallen by 22.2 thousand jobs over the same period. This status as the nation of part-time employment growth carries many attendant negative consequences – poor income growth, precarious work, lack of skill development etc. The teenage labour market remains in a poor state and was treading water in November. It requires urgent policy intervention. Overall, with weak private investment now on-going and real GDP contracting (in the September-quarter), the Australian labour market is weak and there needs to be a policy shift. We will learn next week when the Federal government makes its Mid-Year Fiscal statement whether they have taken heed of the message in the data over the last few months. Australia needs a rather sizeable fiscal stimulus. My bet is that the Government will not have the good sense to introduce this required boost to total spending. But the deteriorating data is staring us all in the face now! There is no room for nuance. It is at the stage where the Federal treasurer should resign and admit his failure (see below).

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Australia races to the low-pay bottom while employers’ lies are exposed

Over the last 12 months, it has been increasingly obvious that the Australia has become a part-time employment nation. While the trend towards increasing part-time employment as a proportion of the total has been with us since the 1970s, the nature of that trend has been changing in recent years and belies the claims by the mainstream that it is a reflection of increased choice by workers for better life-work balance and the rising proportion of women in the workforce combining family responsibilities with income earning opportunities. The reality is different. Overall, there is a lack of working hours being generated in Australia (as elsewhere) because macroeconomic policy is restrictive (fiscal deficit to low as a proportion of GDP). That rationing of job creation is giving way to more part-time work, higher levels of underemployment (part-time workers who desire more hours but cannot find them), higher proportions of casual work, and a bias towards jobs that provide low (below average) pay. And the pressure is on to cut pay and conditions even further as employers make spurious claims about the damage penalty rates (overtime rates at weekends) cause the economy. The problem for them is that a recent (leaked) report by a Citi Research (part of Citigroup), hardly a friend of the unions and workers, has exposed the truth – cuitting penalty rates will just boost profits and will not lead to increased employment.

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Australia records another quarter of record low wages growth

In the last few weeks, three sets of economic data released by the Australian Bureau of Statistics reveal just how bad the Australian economy is performing and exposes the lies that the mainstream media pedals on behalf of the conservative government and the establishment that seeks to defend the disastrous neo-liberal policy regime. Last week (November 17, 2016), I analysed the recent labour market data for October (see Australian labour market – staggering along and in trend deterioration). The ABS said the data represented a Continuing shift to part-time employment . On November 10, 2016, the ABS released its latest – Participation, Job Search and Mobility, Australia, February 2016 – data, which reveals that 1 million Australians were underemployed in February 2016 and on average wanted an additional 13.5 hours of extra work per week. Do the multiplication – an enormous amount of wasted labour. Further, of the 6.4 million Australians not classified as being in the labour force, 954,800 wanted to work and were available to work. Finally, last week (November 16, 2016), the ABS released the latest – Wage Price Index, Australia – for the September-quarter 2016. For the fourth consecutive month, annual growth in wages has recorded its lowest level since the data series began in the December-quarter 1997. Real wages are barely growing and trailing productivity growth. The flat wages trend is intensifying the pre-crisis dynamics, which saw private sector credit rather than real wages drive growth in consumption spending. The lessons have not been learned.

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Australian labour market – staggering along and in trend deterioration

Yesterday, the ABS released its Wage Price Index data for the September-2016, which showed the record low wages growth is continuing. The latest labour force data released today by the Australian Bureau of Statistics – Labour Force data – for October 2016 shows that predictions that this low wages growth would be good for employment were, unsurprisingly, false. Total employment barely increased and the ABS said the trend to part-time work has intensified. Over the last 12 months, Australia has produced only 102.2 thousand (net) jobs with 136.9 thousand of them being part-time jobs. In other words, full-time employment has fallen by 34.7 thousand jobs over the same period. Australia maintains its status as the nation of part-time employment growth with all the attendant negative consequences. The teenage labour market remains in a poor state and contracted sharply again in October. It requires urgent policy intervention. Overall, with weak private investment now on-going, the Australian labour market is looking in pretty dismal shape and the Federal government should immediately renounce its ill-informed austerity narrative and announce a rather sizeable fiscal stimulus to provide some fiscal leadership to the nation. This should include a large-scale public sector job creation program which would ensure teenagers regained the jobs that have been lost due to the fiscal drag over the last several years. The deteriorating data is staring us all in the face now! There is no room for nuance.

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US employment falls in October signalling increased weakness

After last month’s US Bureau of Labor Statistics employment data (for September) I assessed that – The US labour market is nowhere near full employment. This was in the context of overtly political (ideological) and ridiculous statements made by the President of the Federal Reserve Bank of San Francisco, who had claimed that the US economy had already returned to full employment. The current BLS data release – Employment Situation Summary – October 2016 – has not altered my view. It showed that total non-farm employment from the payroll survey rose by 161,000 and the unemployment rate remained “little changed” at 4.9 per cent. But from the perspective of the labour force survey (Current Population Survey), total employment fell by 43 thousand. See below for an explanation of that paradox. The point is that employment still remains well below the pre-GFC peak and the jobs that have been created in the recovery are biased towards low pay. In general, the problem is less job creation as quality of the work being created and the capacity of US workers to enjoy wage increases. There are also wide disparities among state unemployment rates.

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A Job Guarantee ensures there is always a job for the unskilled

Economists often use the so-called Unemployment-Vacancy (UV) ratio, which is the number of official unemployed divided by the number of unfilled vacancies at any point in time, to measure the strength of the labour market. The latest data from the Australian Bureau of Statistics (ABS) shows that the UV ratio in Australia is currently at 4. This means that there are four unemployed workers per unfilled vacancy – a sign of a relatively weak labour market. However, a new Report from Anglicare researchers in Australia, which was released yesterday, shows that when we disaggregate the analysis and examine a match of vacancies by worker in each skill level, the UV ratios for the most disadvantaged workers is much higher. The obvious solution for the federal government is to introduce a Job Guarantee, which effectively ensures the UV ratio for the most disadvantaged workers would be equal to unity. In other words, there would always be a job opportunity available that would suit the most unskilled worker in the nation. That is what today’s blog is about.

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