- Australia has begun a slow jobs recovery effort, getting an estimated 69,000 people back to work in May, according to Roy Morgan.
- The research house’s figures paint a bleak picture of the job market, putting unemployment at 14.8% compared to the official ABS figure of 6.2%.
- The discrepancy comes largely from using different definitions of unemployment, with Roy Morgan claiming its interpretation is closer to what is going on in the labour force.
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There are early signs Australia’s job recovery is underway – but it’s got a hell of a way to go yet.
With around 69,000 people returning to work in May there are 2.09 million Australians currently left unemployed, according to estimates provided by research house Roy Morgan.
“The trend in May is in the right direction as the Australian economy opens up but compared to the labour market situation pre-lockdown an additional 1.3 million Australians are now unemployed or under-employed – and this is while the JobKeeper program is still running,” Roy Morgan CEO Michele Levine said in a statement issued to Business Insider Australia.
Suggesting an unemployment rate of 14.8%, Roy Morgan’s figures differ greatly from the official ABS ones, which put the April jobless rate at just a fraction of that at 6.2%.
The discrepancy, amounting to around 1.2 million Australians, comes from several factors, not least of which is a rejection of kind of methodology the ABS uses. For example, someone who worked a single hour in a week, even if they were not paid as part of a family business, is officially classified as employed by the government agency.
Such definitions can frustrate economists, especially during the current crisis where unprecedented job losses and targeted government support programs can quickly distort the overall employment picture.
Take last month, when the unemployment rate rose just 1 percentage point to 6.2%, after half a million Australians simply ‘left’ the workforce to not be included in the rate. For the layperson, it may make more sense to say that those 500,000 workers without jobs are now unemployed, a reality that would alone put unemployment closer to 10%. That’s before considering many other Australians remain “employed” simply by virtue of the JobKeeper subsidy, due to be cut in October pending a review later this month.
Roy Morgan’s ballpark estimates, produced from thousands of interviews, aim to get a little closer to what’s going on in the workforce, albeit from a far more limited data set. It also doesn’t seasonally adjust its numbers; but if it’s closer to the ‘real’ picture, the view isn’t pretty.
“In total a massive 3.46 million (24.5%) Australians are now either unemployed or under-employed, down 25,000 since April,” Levine said. “If this number continues to drop at the rate of 25,000 per month it will take over four years until September 2024 before it approaches the levels of early March 2020.”
May, however, marked just the first trepidatious steps back towards normalcy, with significant restrictions still to be lifted in June and July. If the federal government’s three-step plan can proceed without further spikes in infections being seen, there’s plenty of scope for unemployment and underemployment to fall faster.
Boston Consultancy Group expects a fast-paced recovery in some sectors, like healthcare, construction and professional services, to restore about 50% of job losses by Christmas. It forecasts nearly one-third of jobs in sectors like transport will have a slower, U-shaped recovery, while the media, aviation and arts sectors covering the remaining 18% will see deep structural damage.
With 8.5% expected to be wiped from the Australian economy between April and June, Australian workers may still need plenty of patience.