Australian employment is at record highs, in terms of people who are actually working. But there are concerns about the structure of the jobs market and the employment opportunities that the economy has created in recent years.
These concerns have lead to a renewed focus on under-employment. That’s where people in part-time work want to work more, or highly skilled people are working in jobs which are lower skilled.
It’s a question the RBA has directly addressed in its latest quarterly Statement on Monetary Policy.
The RBA noted that “Over the course of 2016, employment growth has been concentrated in part-time jobs, while full-time employment has been little changed until very recently”.
This increase in part-time employment reflects a trend which has been underway “over a number of decades” which means part-time employment now accounts for “close to one-third of total employment”, the RBA said.
This decades-long move reflects increased female participation in the workforce and labour markets reforms, the RBA said.
But in addressing the recent “shift in composition of employment growth towards part-time employment” the RBA said two factors are the key drivers behind the shift.
“First, employment growth has been stronger in industries that tend to have a higher proportion of part-time jobs, such as household services”, the RBA said.
According to the bank that reflects “solid growth in household consumption and a pick-up in tourism, but also longer-run trends, such as increasing demand for aged and home-based care services as the population ages”.
The second major factor driving the shift to part-time employment appears to reflect the economic uncertainty in the local and global economies which is making business more cautious.
This uncertainty, and the cautiousness it breeds is then feeding into a desire for business to retain the flexibility to bring workers on and off its books according to the RBA.
The banks said business was using part-time workers “in a way that contains costs”.
“In particular, the Bank’s liaison suggests that a broad range of businesses are seeking greater flexibility from employees through the use of part-time or casual work or temporary contracts, to improve productivity and minimise their labour costs”, the Bank said.
This last point “might help to also explain the increase in part-time employment relative to full-time employment in a range of industries in the business service and goods-related sectors”, the bank said.
Which ever way you cut it what’s clear in today’s Statement on Monetary Policy is that the economic backdrop, both in Australia and across the globe, is unlikely to reverse this trend toward part-time employment anytime soon.