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.
There were two significant data releases from the Australian Bureau of Statistics this week that provide information about the state of the labour market – both in the short-term and also in terms of longer-term trends. The first release (September 8, 2021) – Labour Account Australia – June 2021 – is a quarterly dataset that allows us to tie together information about employment, persons, hours and payments. The second release today (September 9, 2021) is the – Weekly Payroll Jobs and Wages in Australia – Week ending August 14, 2021 – which is Australian Tax Office data that provides a much more current view of how the labour market is performing. That snapshot is especially valuable given the on-going tight lockdowns in Sydney and Melbourne and the impact they are having on employment and wages.
Last Friday (September 3, 2021), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – August 2021 – which reported a total payroll employment rise of only 235,000 jobs in August and a 0.2 points decline in the official unemployment rate to 5.2 per cent. The results suggest that the labour market recovery has slowed quite significantly. The US labour market is still 5,333 thousand jobs short from where it was at the end of February 2020, which helps to explain why there are no fundamental wage pressures emerging.
I find it amusing when some self-styled ‘progressive’ commentator, usually writing in the UK Guardian newspaper, bemoans Brexit and points to claims by business that there is a shortage of workers. The ‘shortage’, of course, is results from not being able to access unlimited supplies of cheap foreign workers as easily as before. When I see a shortage of workers, I celebrate, because it means employers will have to break out of their keep wages growth low mentality to attract labour; that they will have to offer adequate skills training to ensure the workers can do the work required; and, that unemployment will be driven as low as can be. What is not good about that? Brexit has done a lot of things, one of them being to provide the British working class to arrest the degradation in their labour market conditions that neoliberalism has wrought in a context of plenty of low wage labour always being in surplus. A similar thing will come from the pandemic in Australia where our external border has been shut for nearly 18 months now.
Today (August 19, 2021), the Australian Bureau of Statistics put out the latest – Labour Force, Australia – for July 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, although not tight enough in NSW. The July 2021 data reveals that employment growth has come to a stop, although the negative impacts of the lockdowns are mainly showing up as reduced working hours and falling participation rates at present. But the job losses will get worse next month given the extended disaster that is now unfolding in NSW. The impact of the slower population growth is showing up in the continued drop in the unemployment rate, but the major fall in unemployment in July 2021, was due to the decline in the participation rate. So the official unemployed are becoming hidden unemployment, which means there is no improvement in the falling jobless numbers. Further, underemployment rose sharply again (0.4 points) to 8.3 per cent which is consistent with the drop in working hours. The labour market is still 255.7 thousand jobs of where it would have been if employment had continued to grow according to the average growth rate between 2015 and February 2020. This month is the calm before the storm. The extended lockdowns will show up in deteriorating data next month. What is preventing a worse outcome is the fact that the lower population growth due to the external border closures, means that employers are now having to absorb the unemployed more quickly to maintain their operations. There is now definite evidence that further fiscal support is required.
The article in the Socialist Worker Review (No. 89, July/August 1986, pp. 19–21), by Eammon McCann – The protestant working class – has kept me thinking for some years. I recalled it the other day when I was updating my Northern Ireland labour market data and working on some text. As a result of reading this article many years ago, I became very interested in the labour market dynamics in Northern Ireland, in particular, as they impact on the debate about unification and EU membership (yes, I have always been anti-EU). In that vein, I have been following the trends over time rather closely. More recently, the central place of the North Ireland Protocol in the Brexit discussions has increased the relevance of this research. I also benefitted from some very interesting conversations a few years ago with my host in Galway (forever thankful Niall), while I was visiting the Republic of Ireland on a speaking trip. These conversations filled in many gaps in my understanding of some of nuances of the issues involved. These trends provide some good background to what has been happening in a region that is undergoing significant change and how we might assess the Northern Ireland Protocol in a post-Brexit world. It also helps us understand the demise of the DUP as a relevant political force. They represent a different era. From my understanding, it is also the major economic changes that have been taking place in Northern Ireland that are more likely to influence the trend away from identifying as either unionist or nationalist or proceeding along ‘religious’ lines. A working class impoverished by austerity is a powerful solidifying force. The labour market has changed dramatically over the last several decades. In this multi-part series, I provide some reflections on these issues. This is part of a book project I am working on (more about which later).
It 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 – 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’.
Last Friday (August 6, 2021), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – July 2021 – which reported a total payroll employment rise of 943,000 and a 0.5 points decline in the official unemployment rate to 5.4 per cent. The results are strong even though the US labour market is still 5,702 thousand jobs short from where it was at the end of February 2020, which helps to explain why there are no fundamental wage pressures emerging.
It’s Day 14 today and later this afternoon I am to be released from my stint in quarantine as a result of shifting myself from Newcastle to Melbourne 2 weeks ago. NSW (where Newcastle is located) is now an area of extreme risk according to the Victorian government, given the growing COVID outbreak in Sydney, and any resident travelling back into Victoria was required to do the 14 days in strict Iso. So today is my ‘freedom day’ after being stuck inside my residence for 2 weeks. Woo! Given my extensive CPI report yesterday, I am not treating today as my normal Wednesday work pattern and so apart from some great music, I offer a few observations on things that have come to mind recently.
Today (July 15, 2021), the Australian Bureau of Statistics put out the latest – Labour Force, Australia – for June 2021. The data shows that the trend where even relatively weak employment growth is driving the unemployment rate down because the growth in labour supply, is continuing. Employment increased by 29,100 or 0.2 per cent (which is weak), monthly hours worked decreased by 1.8 per cent, the participation rate was stable, yet unemployment fell by 22,000 (which is excellent), and the unemployment rate fell 0.2 points to 4.9 per cent. But underemployment rose sharply (0.5 points) to 7.9 per cent. So it is a good outcome for unemployment to be falling but the quantity and quality of employment growth is not desirable. The drop in working hours is due to the two-week lockdown in Victoria recently. Next month, the current extended lockdown in Sydney will show up as a negative in the July result. The labour market is still 232.9 thousand jobs of where it would have been if employment had continued to grow according to the average growth rate between 2015 and February 2020.