60% of new jobs created in Australia are casual, according to new analysis. The figure calls into question the strength of Australia’s economic recovery.

Delivery workers are at the forefront of the rise in insecure work. (Speed Media, Icon Sportswire)
  • Australia may be creating a record number of jobs, but they aren’t the ones workers need, the Australian Council of Trade Unions (ACTU) has argued.
  • Six in ten new jobs during the recovery are casual, while Australians increasingly work multiple jobs in the search of sufficient hours.
  • New analysis from Roy Morgan suggests unemployment and underemployment have risen sharply on pre-pandemic levels, as a Select Committee examines what reforms may be required to strengthen the labour market.
  • Visit Business Insider Australia’s homepage for more stories.

The job market is bouncing back at a surprising pace, but the economy isn’t necessarily creating the kind of work Australians need.

Around six in every ten new positions created since the pandemic began have been casual, according to think tank the Australia Institute, while the number of Australians working multiple jobs is increasing at its fastest rate on record.

It suggests that the undeniable momentum in the Australian economy is creating a slew of poor-quality jobs rather than secure ones. Australia’s recovery, in other words, is not nearly as strong as it might appear from the headline figures.

The latest analysis from Roy Morgan exposes just that. It shows Australians were working a record 13 million jobs in April, but that the month’s growth was offset by a sharp rise in underemployment.

“Although there was a lot of good news in the April employment figures there is still a large cohort of 2.66 million Australians – 18.3% of the workforce – who are either unemployed or under-employed,” Roy Morgan CEO Michele Levine said.

Approximately 268,000 more Australians were working fewer hours than they would like in April. Combined with the number of unemployed Australians, Levine said “this under-utilised cohort is 500,000 higher than pre-pandemic”.

Roy Morgan figures typically show the labour market is in worse shape than the official ABS figures do, incorporating cohorts that the ABS excludes as part of its methodology.

Its latest figures present a more nuanced picture of an economy that is both producing more jobs than before but ones that are both insecure and insufficient to sate a growing number of Australians looking for work. To put that in perspective, 69.1% of Australians aged over 14 years want a job right now, compared to 67.1% last year.

“Compared to the employment market pre-pandemic there is now a larger workforce which includes increases in both employment and unemployment as well as higher under-employment in an economy with a record amount of part-time employment,” Levin said.

The federal government needs a plan

It’s a challenge that hasn’t escaped the notice of policymakers even if there’s been little done to date to actually address it. The Senate appointed a Select Committee on Job Security late last year to report on the “extent and nature of insecure or precarious employment in Australia”.

It has so far taken a look at how COVID-19, the rise of the gig economy operators like Uber and Deliveroo, and the ambiguous legal status of its contractors has exacerbated the trend. According to the Australian Council of Trade Unions (ACTU), there are now 3.3 million Australians in insecure work.

On Friday, the union peak body publicly urged the government to tackle industrial reform as it prepares to announce the Federal Budget on Tuesday.

“We have the highest proportion of Australians working two or more jobs on record. No one works multiple, low-paid, unreliable and insecure jobs by choice. Workers are being forced to take multiple jobs and work more hours to make ends meet,” ACTU Secretary Sally McManus said.

“To repair our economy we need workers spending – but they won’t be doing that without reliable work and secure incomes.”

It speaks to several of the challenges both the Treasury and the Reserve Bank of Australia (RBA) are facing in mounting a sustainable and strong recovery.

Treasurer Josh Frydenberg has emphasised his number one economic goal is to get “a four in front” of the unemployment figure, which sits officially ahead of forecasts at 5.6% right now.

It’s apparent though that as underemployment rises jobs make up just one part of the growth equation. It’s obvious that an Australian working two casual jobs or just 20 hours a week isn’t secure, and in turn isn’t spending like a full-time worker would.

The RBA has repeatedly prioritised the much more evasive wage growth as its key target. While it expects Australia will need to return to full employment as part of this – forecast to be achieved within two years – it realises full-time and secure work is the only avenue by which to substantially lift wages.

“While the Reserve Bank is forecasting an unemployment rate that we’ve haven’t seen since before the GFC, it triggers minimal improvement in wage growth,” Indeed Asia-Pacific economist Callam Pickering said.

“By mid-2023, wages are expected to be growing at 2.25%, which is similar to the rate of growth before the pandemic and a far cry from the 3% plus rate we need to facilitate a strong and vibrant economy.”

As the Morrison government looks to grow the economy to fix the budget bottom line, the type of work the economy creates is going to become increasingly important.