Today’s release of the – Labour Force data – for August 2013 by the Australian Bureau of Statistics tells me two things. First, it presents the case for why we had to change our federal government last weekend. The Labor Party had abandoned their responsibility for keeping unemployment low. Their obsession with achieving a budget surplus (they failed) deliberately undermined employment growth and has led to tens of thousands of Australians losing their jobs. Second, the new conservative government is going to have to shed its own ideological obsession with cutting deficits if it is to create an environment of robust employment growth and reduce unemployment. Its deregulation mantras will just make matters worse. I am not confident. We had the three evils in August – contracting employment, rising unemployment and a contracting labour force (via a further fall in the participation rate). Employment growth has negative now been negative for the last three months (a recession!) and in August both full-time employment and part-time employment contracting. Total employment is now lower than it was 6 months ago. Unemployment is rising towards 6 per cent as the weak employment growth fails to keep pace with the underlying population growth. Hidden unemployment also rose as more people gave up looking for work in an environment where job opportunities are shrinking rapidly. The broad labour underutilisation data from the ABS for the August quarter (released today) show sharp rises in both unemployment and underemployment. The broad rate of labour wastage is now 13.7 per cent. Add to this the impacts of the falling participation rate and the figure would be above 15 per cent. This data signals an urgent need for fiscal stimulus to reverse the negative trend. Unfortunately, with both sides of politics are locked into an austerity mindset the situation is likely to deteriorate further.

I have very little time today given other commitments. In recent months the Australian labour market has deteriorated quite noticeably and the Government has been forced to revise its estimates of the unemployment rate up to 6.25 per cent from 5.75 per cent in 2014. It is currently at 5.7 per cent and rising and before the GFC it reached a low-point value of 4 per cent. Underemployment is also rising as is hidden unemployment as the participation rate falls due to lack of employment opportunities. Further, in the last 6 months around 84 per cent of the net jobs created have been part-time. For the first time in several federal elections, unemployment and the paucity of job openings has become an election issue. Today, I used the little free time I had available to update my gross flows database to see if we could discern these trends as changing transition probabilities. In this blog I analyse the flows between full-time and part-time employment as well as movements between non-participation and employment to finish off the story. This blog is thus just an exploration of the data and an exercise to keep my databases current and for me to know what they are saying. The empirical side of my working life!

Today’s release by the Australian Bureau of Statistics (ABS) of the – Labour Force data – for July 2013 continues to signals a weakening labour market. Employment growth was negative with both full-time employment and part-time employment contracting. Full-time employment has contracted for the last three months. Over the last six months, there have been only 29.9 thousand (net) jobs created in the Australian economy comprising an overall loss of 18 thousand full-time jobs and 47.9 thousand part-time jobs. Unemployment fell by 5,700 but only because the labour force contracted with a 0.2 points fall in the participation rate. In other words, hidden unemployment rose as more people gave up looking for work in an environment where job opportunities are shrinking rapidly. This data signals an urgent need for fiscal stimulus to reverse the negative trend. Unfortunately, with both sides of politics locked into an austerity mindset the situation is likely to deteriorate further.

The other day – in this blog – The British agenda to bring workers to their knees is well advanced – I considered the recent British Trades Union Congress (TUC) report (July 12, 2013) – The UK’s Low Pay Recovery – which shows that “eighty per cent of net job creation since June 2010 has taken place in industries where the average wage is less than £7.95 an hour”. The Report also showed that the middle-pay jobs were being shed and the bifurcation in the British labour market between an increasing number of (self-employed) low-paid jobs with precarious working conditions and future and the high pay jobs, which seemingly avoided much of the negative impacts of the recession, has intensified. The middle in Britain is being hollowed out and replaced by an increasing number of low paid workers. In Australia, 84 per cent of jobs created in the last 6 months have been part-time and underemployment has risen since February 2008 (the low-point in the last cycle) from 666.3 thousand (5.9 per cent) to 908.6 thousand (7.4 per cent). The question I look at in this blog, is the wage impacts of these employment trends in Australia. Are we also seeing the same hollowing out as is clearly occurring in Britain. Of those 84 per cent of jobs, what proportion are low-paid, medium-paid and high-paid. Clearly, if most of them are at the bottom end of the wage distribution then the raw figure of 84 per cent sits on top of an increasing disaster for the prosperity of working families.

Today’s release by the Australian Bureau of Statistics (ABS) of the – Labour Force data – for June 2013 signals a deteriorating situation. Employment growth was about zero and full-time employment continued to contract. 84 per cent of jobs created in the last 6 months have been part-time. Unemployment rose by 23,700 and the unemployment rate rose 0.2 points to 5.7 per cent. This data signals an urgent need for fiscal stimulus to reverse the negative trend. Unfortunately, with both sides of politics locked into an austerity mindset the situation is likely to deteriorate further.

Australia recently acquired a new (old) Prime Minister and a new Treasurer (Chris Bowen) as a result of the on-going machinations within the Australian Labor Party. It seems to have done the trick – at least at present – with the two-party preferred vote split 50-50 now instead of 42-58 in favour of the moribund conservatives who were steaming into office, it seemed, with no credibility at all – just a generalised dislike for the previous PM and her cabinet. Within two days, however, of taking his post, the new Treasurer agreed that it was the Government’s policy to drive unemployment up by maintaining its totally inappropriate (and failed) strategy to achieve a budget surplus. This was in the same week as more disastrous labour market data has been released. It seems that our “change” of government has just taken on all the old destructive narratives of the “former” regime. One neo-liberal Treasurer walks out and a clone walks in.

The continuing obsession among policy makers combines fiscal austerity and deregulation (particularly of labour markets) as the hope for prosperity. I know these are just catch cries that aim to obfuscate the underlying intent which is to redistribute real income away from workers. But even that conspiracy theory has certain problems when you realise that business doesn’t necessarily do very well in general when economies are locked in a recessive mire. The structural reform argument goes that growth can be engendered by deregulating the labour market to remove inefficiencies that create bottlenecks for growth even when fiscal austerity is slashing aggregate demand and killing growth. The 1994 OECD Jobs Study the provides the framework for this policy approach. The only problem is that it failed even before the crisis emerged. But with policymakers intent on slashing aggregate demand, which they know will kill growth, they have to offer something that they can pretend will generate growth. The structural reform agenda has zero credibility in the same way that fiscal austerity has zero credibility. The latest vacancy data from Australia continues to provide an evidential basis for rejecting both conservative agendas.

Today’s release by the Australian Bureau of Statistics (ABS) of the – Labour Force data – for May 2013 signals a deteriorating situation. Employment growth was about zero. The fall in the unemployment rate was due to a decline in the participation rate. Monthly hours worked fell as full-time employment contracted. The broad labour underutilisation rate rose sharply by 0.4 pts to 12.9 per cent with more than 908 thousand workers underemployed. This data signals an urgent need for fiscal stimulus to reverse the negative trend. Unfortunately, with both sides of politics locked into an austerity mindset the situation is likely to deteriorate further.