{"id":48046,"date":"2021-08-10T18:04:40","date_gmt":"2021-08-10T08:04:40","guid":{"rendered":"https:\/\/billmitchell.org\/blog\/?p=48046"},"modified":"2021-08-10T18:04:40","modified_gmt":"2021-08-10T08:04:40","slug":"the-ideology-of-neoliberal-freedom-ends-up-damaging-all-of-us-nsw-covid-outbreak","status":"publish","type":"post","link":"https:\/\/billmitchell.org\/blog\/?p=48046","title":{"rendered":"The ideology of neoliberal ‘freedom’ ends up damaging all of us – NSW Covid outbreak"},"content":{"rendered":"

\t\t\t\tIt has been a while since I updated my commentary on the new bi-weekly dataset using Australian Tax Office payroll data that the Australian Bureau of Statistics started publishing in March 2020, in order to provide more updated information on the state of the labour market during the pandemic. The Monthly Labour Force survey comes out in the third week of each month and relates to data collected around the second week of the previous month. With ongoing state government lockdowns being imposed with little warning having a significant impact on employment, this more frequent dataset was welcome. We are now in a situation where around 13 millions Australians are in tight lockdowns (over half the population), principally in Melbourne and Sydney. The latter, due to the incompetence of the conservative state government in NSW, has been in lockdown for weeks now and as the largest state, the reverberations are clearly going to be felt across the nation. Last week (August 5, 2021), the ABS released the – Weekly Payroll Jobs and Wages in Australia, Week ending 17 July 2021<\/a> – which provides the first glimpse of what the impact of the extended lockdown in Sydney (in particular) is having on the labour market. Employment in NSW shrunk by 5.1 per cent in the 3 weeks since June 26, 2021 (the start of the restrictions). Overall, employment has slumped by 2.4 per cent nationally. And the virus is spreading into regional NSW and things will get worse. The damage is being borne largely by our youth, given the occupation segregation in the ‘closed down’ sectors. The Federal government is demanding we all get vaccinated but due to its trying to ‘save money’ last year, there is insufficient vaccine available to supply the demand. Both the NSW and Federal governments have demonstrated their incompetence in the decisions they have taken in the name of ‘freedom’ and ‘fiscal surpluses’.
\n<\/p>\n

In terms of the coverage of the ATO Single Touch Payroll<\/em> data, the ABS report that:<\/p>\n

\nApproximately 99% of substantial employers (those with 20 or more employees) and 71% of small employers (19 or less employees) are currently reporting through Single Touch Payroll.\n<\/p><\/blockquote>\n

Past analysis of ATO Payroll Data<\/h2>\n

See links at the end of this blog post.<\/p>\n

Overall jobs recovery uncertain<\/h2>\n

The ABS – Press Release<\/a> – notes that:<\/p>\n

\nPayroll jobs fell by 2.4 per cent nationally in the fortnight to 17 July 2021, following a 0.2 per cent fall in the previous fortnight …<\/p>\n

While every state and territory saw a fall in payroll jobs across the fortnight, the falls were much larger in New South Wales (down 4.4 per cent) and neighbouring Australian Capital Territory (down 2.4 per cent) …<\/p>\n

New South Wales usually accounts for around a third (32.0 per cent) of total payroll jobs and Victoria around a quarter (26.2 per cent). As a result, lockdowns in these two states contributed to a strong fall in payroll jobs nationally …<\/p>\n

The Accommodation and food services and Arts and recreation services industries saw large falls over the fortnight, down by 19.0 per cent and 18.0 per cent in New South Wales and by 8.7 per cent and 4.5 per cent nationally …<\/p>\n

As we saw in the early weeks of the pandemic last year, payroll jobs held by women and workers under 30 were particularly impacted, especially in New South Wales.\n<\/p><\/blockquote>\n

The impact was predictable.<\/p>\n

Whereas the Premiers in the other Australian states have learned that at the onset of COVID cases, a short and sharp lockdown is necessary to meet the national targets of zero community transmission (and these lockdowns usually last a week or so), the NSW government, in their attempt to occupy the ‘freedom’ higher ground, delayed the decision to lockdown, despite being urged by most of the Australia’s leading infection experts to go early.<\/p>\n

The result has been that the NSW government has now lost control of the virus and it is spreading into regional NSW from Sydney and the case numbers are rising quickly, with the inevitable rise in deaths.<\/p>\n

Newcastle is now in lockdown (from this week) because the government failed to restrict movement between Sydney and the regions and so the virus spread (I am currently stranded in Melbourne in Victoria by the way).<\/p>\n

So when the NSW government finally realised that they had to lockdown the employment consequences started to become obvious – the longer a state delays, the longer the subsequent lockdown and the worse will be the labour market impacts.<\/p>\n

The other states\/territories that use the short and sharp approach damage the labour market too but less so and the impacts are of shorter duration.<\/p>\n

Here is what has happened to total employment in Australia since January 4, 2020 (the ATO data starts at the beginning of the year). The index is based at 100 on March 14, 2020 which appears to be around the peak employment, although it was slowing since February 29, 2020.<\/p>\n

1. Overall, payroll employment is 2 per cent higher as at July 17, 2021 that it was on March 21, 2020. But in terms of the most recent peak (which was 4.8 per cent higher – on June 26, 2021), there has been a rapid deterioration in the next 3 weeks to July 17, 2021 – a fall of 2.6 per cent.<\/p>\n

2. The first trough came in the week ending April 18, 2020 and the total employment loss was 8.5 per cent.<\/p>\n

3. The second dip coincides with the extended Sydney lockdown before Xmas.<\/p>\n

4. The third big dip that we are now witnessing coincides with the extended Sydney lockdown now being endured.<\/p>\n

\"\"<\/a><\/p>\n

<\/div>\n

Gender trends<\/h2>\n

Here is the same series decomposed by gender.<\/p>\n

While the pattern was almost identical for males and females up to March 22, 2020, the data for the earlier parts of April 2020 showed that the crisis was impacting disproportionately on females.<\/p>\n

This bias was driven by the occupational segregation that has women dominating the sectors that were most impacted by the lockdown (accommodation, hospitality, cafes, etc)<\/p>\n

As the lockdowns eased and businesses reopened, women started to gain jobs at a faster rate than men.<\/p>\n

In terms of the decline since the most recent peak (June 26, 2021), male payroll employment has fallen by 2.3 per cent and female employment has dropped by 3.1 per cent.<\/p>\n

So the ‘bias against females’ pattern that was evident in the big lockdown at the onset of the pandemic is repeating itself.<\/p>\n

\"\"<\/a><\/p>\n

<\/div>\n

Wages data suspended<\/h2>\n

The ABS said that “Around the end of the financial year there is a greater variation in business reporting, as businesses finalise their employee’s earning information and the financial year is reset in payroll systems.”<\/p>\n

This variability has led them to suspend the wages estimates.<\/p>\n

However, tomorrow the Wage Price Index data is published and I will analyse that accordingly.<\/p>\n

Comparison with prior cycles<\/h2>\n

The following butterfly graphs are constructed from ABS Labour Force data and provide a vehicle for analysing what happens to employment following a downturn.<\/p>\n

They show for full-time and part-time employment indexes set at 100 for the peak in total employment in the downturns for 1982, 1991, GFC and now the COVID-19 cycles.<\/p>\n

For the first three events, they show the trajectory for 90 months after the peak, capturing the dynamics of the cycle.<\/p>\n

The pattern in a usual downturn are demonstrated in the first three episodes – even as full-time employment declines as the recession bites, part-time employment continues to grow for a while, until it becomes obvious that the recession is deepening.<\/p>\n

At the peak before the 1982 recession, the ratio of part-time to total employment was 16.2 per cent. By the time, full-time employment had reached the peak level again (after 41 months following the peak), the ratio was 17.6 per cent (and rising).<\/p>\n

The 1991 recession was particularly bad and there was a major shift away from full-time work. At the peak before the 1991 recession, the ratio of part-time to total employment was 21 per cent. By the time, full-time employment had reached the peak level again (after 65 months following the peak), the ratio was 22.3 per cent (and continuing to rise).<\/p>\n

The GFC event was reduced in intensity by the substantial fiscal stimulus that the Federal government introduced. But the part-time ratio still rose and full-time employment took 23 months to return to its pre-GFC peak. The part-time to total ratio in February 2008 (peak before the downturn) was 28.3 JobKeeper cent. After 23 months, the ratio had risen to 30.1 per cent.<\/p>\n

While the ratio is rising on a trend basis as the labour market is increasingly casualised and job protections are wound back under the aegis of government policy designed to tilt the playing field towards the employers, there is an acceleration in the ratio during recessions when employers scrap full-time work and replace it in the recovery with part-time, fractionalised and insecure work.<\/p>\n

The COVID episode is different given the nature of the job loss – lockdowns – which have directly impacted on the sectors where part-time work dominate.<\/p>\n

But it is clear from the observations we have (lower-right panel) that as the lockdowns were eased, part-time employment rebounded somewhat but full-time employment continued to struggle.<\/p>\n

It is important to note that prior to the pandemic, overall growth was declining and the labour market was weak.<\/p>\n

The pandemic has made matters worse but the problems were there before the onset as a result of the federal government austerity onslaught.<\/p>\n

\"\"<\/a><\/p>\n

<\/div>\n

Age breakdown of Job Loss<\/h2>\n

The age breakdowns for Australia as a whole are shown in the next graph.<\/p>\n

The blue line shows the total history since March 14, 2020 (when the index = 100) to July 17, 2021 by age category. So you interpret the graph as being deviations from 100.<\/p>\n

The orange line shows the period June 26, 2021 to July 17, 2021, which is from the previous peak to the current point and starts to capture the impact of the renewed lockdowns, particularly the now extended Sydney restrictions. So you interpret this line as being deviations from the June 26, 2021 peak.<\/p>\n

Overall, it is the youth 15-29 age group that has borne the brunt of the pandemic so far in terms of employment.<\/p>\n

This is largely due to the industrial composition of the job losses – services, accommodation etc.<\/p>\n

It is also clear that all age groups are suffering in the most recent period of lockdowns across the nation with younger and older workers enduring the greater percentage contraction in their employment.<\/p>\n

\"\"<\/a><\/p>\n

<\/div>\n

The following sequence of graphs gives the age profiles of the job loss for each State\/Territory.<\/p>\n

The patterns are similar across all jurisdictions except that in Victoria, the short-sharp lockdowns in recent weeks has not yet damaged the youth cohorts.<\/p>\n

You can also see that the current restrictions in NSW are having much more significant negative effects on employment across the age groups, particularly the young and old, than in other states\/territories.<\/p>\n

\"\"<\/a><\/p>\n

<\/div>\n

Industry job loss breakdown<\/h2>\n

The following graph shows the percentage decline in employment for the Australian industry sectors from March 14, 2020 to July 17, 2021 (blue bars) and from June 26, 2021 to July 17, 2021 (orange bars).<\/p>\n

The latter period shows the impacts so far of the restrictions that have been imposed to deal with the Delta variant of the virus.<\/p>\n

The worst hit sectors overall are Accommodation & food services<\/strong> (decline of 9 per cent), Transport, postal and warehousing<\/strong> (down 8.1 per cent), Information, media and telecommunications<\/strong> (down 5.8 per cent) and Arts & recreation services<\/strong> (down 3.5 per cent).<\/p>\n

The recent lockdown period has impacted badly on those sectors, but has had a negative effect overall.<\/p>\n

\"\"<\/a><\/p>\n

<\/div>\n

State and Territory job loss breakdown<\/h2>\n

The following graph shows the employment losses from March 14, 2020 to July 17, 2021 for the States and Territories (blue bars), while the orange bars shows what has happened between June 26, 2021 and July 17, 2021.<\/p>\n

NSW overall, the largest state in Australia has experienced negative employment growth over the entire period and a sharp 5.1 per cent decline in the period between June 26, 2021 and July 17, 2021, which covers some of the most recent lockdown.<\/p>\n

Victoria, which had a 110-day harsh lockdown last year (much harsher than the current NSW lockdown) has overall added jobs over the pandemic but in the recent period has contracted by 2.1 per cent (as a result of two short\/sharp closures).<\/p>\n

NSW began its lockdown on June 26, 2021, so this data is covering only the first 3 weeks. The situation has deteriorated significantly since July 17, 2021 (when this current data ends) as the infection rate has spread in Sydney and has now escaped to the regional centres, such as Newcastle.<\/p>\n

The data suggests that it was foolish of the NSW government not to follow the short\/sharp lockdown approach used by the other states\/territories, which appear to be significantly less damaging and are successful in bringing the outbreak under control.<\/p>\n

NSW is now in for an extended period of lockdown as the case numbers accelerate upwards and the death rate rises and the employment damage will compound.<\/p>\n

Neoliberal ideology does it again!<\/p>\n

\"\"<\/a><\/p>\n

<\/div>\n

Conclusion<\/h2>\n

The labour market is once again contracting, largely because of the errors the NSW government made in controlling the latest outbreak, which was a breach of quarantine.<\/p>\n

They have failed to curb mobility and the infection rate is spreading into the regions.<\/p>\n

They reluctantly imposed a lockdown but it was too late.<\/p>\n

It will now be an extended contraction.<\/p>\n

The other states\/territories have all followed a different model of short\/sharp lockdowns and are more successful in controlling the virus and limiting the labour market damage.<\/p>\n

The NSW government, infested with neoliberal ideology about ‘freedom’ and under pressure from the big employers (clubs, racing etc) stayed open too long.<\/p>\n

Now we are all suffering, given that NSW is the largest economy.<\/p>\n

Relevant blog posts as I trace this data trail over time are:<\/p>\n

1. “We need the state to bail out the entire nation”<\/a> (March 26, 2020).<\/p>\n

2. The government should pay the workers 100 per cent, not rely on wage subsidies<\/a> (March 30, 2020).<\/p>\n

3. A Job Guarantee would require $A26.5 billion net to reduce the unemployment rate by 6 percentage points<\/a> (April 30, 2020).<\/p>\n

4. Latest employment data for Australia exposes Federal government’s wilful neglect<\/a> (May 5, 2020).<\/p>\n

5. The job losses continue in Australia but at a slower pace<\/a> (May 19, 2020).<\/p>\n

6. Worst is over for Australian workers but a long tail of woe is likely due to policy failure<\/a> (June 16, 2020).<\/p>\n

7. Latest Australian payroll data suggests employment damage from shutdown is worse than thought<\/a> (July 20, 2020).<\/p>\n

8. Australia’s job recovery stalling and soon to head south again<\/a> (August 12, 2020).<\/p>\n

9. Payroll employment falling again as second-wave and inadequate policy response bites<\/a> (August 25, 2020).<\/p>\n

10. Federal government cutting spending as payroll data shows employment still in decline<\/a> (September 10, 2020).<\/p>\n

11. Latest employment data in Australia continues sorry tale and what I would do about it<\/a> (September 24, 2020).<\/p>\n

12. Australian labour market continues to go backwards as government sits idly by<\/a> (October 20, 2020).<\/p>\n

13. Australian labour market struggling with significant sectoral disparities<\/a> (May 11, 2021).<\/p>\n

That is enough for today!<\/p>\n

(c) Copyright 2021 William Mitchell. All Rights Reserved. \t\t<\/p>\n","protected":false},"excerpt":{"rendered":"

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