Australian labour market in dire straits
At present, the pandemic is causing massive fluctuations in the labour force aggregates to the point that it is very difficult to know more than that things a bad even when conventional indicators would normally be moving in a direction that would lead to the opposite conclusion. Today (September 16, 2021), the Australian Bureau of Statistics put out the latest – Labour Force, Australia – for August 2021. The background is that the entire East Coast is in or has been in lockdown over the last few months and for the two largest labour markets (NSW and Victoria) that lockdown has been very tight. The August 2021 data reveals that the longer NSW lockdown is now impacting heavily on employment growth. Employment, working hours, and participation are now falling sharply and we have the situation where unemployment and the unemployment rate is falling because the labour force is declining faster than employment. Of course that just means that the workers who would normally have been counted as officially unemployed as they lost jobs are now outside the labour force – and we consider them to be hidden unemployed. Their participation decline is because employment opportunities have collapsed. The more stable ratio – the Employment-to-Population ratio fell by 0.8 points in August, which is a massive shift for one month. The situation will get worse in September. So while the unemployment rate might be falling the situation is dire. The lack of any significant stimulus from the federal government is telling. There is now definite evidence that further and rather massive fiscal support is required. The lack of support is one reason low-paid workers in high infection rate areas are still mobile – looking for work etc and spreading the virus further.