The Australian Bureau of Statistics (ABS) published the Labour Force data for October 2011 today. The data shows that employment barely grew and thanks to an artificially low labour force growth rate was just sufficient to allow unemployment to fall slightly. However, most of the drop in unemployment was due to a slight decline in the participation rate. The data is not bad but it is certainly not good and points to a weak economy overall. How long that remains is anyone’s guess in these uncertain times where governments have largely abandoned any plans to provide fiscal support to help the economies grow. The recent acceleration of the crisis in Europe should not impact negatively on our labour market if the Government is flexible enough to abandon its obsessive pursuit of a budget surplus. The black spot in the data today is the continued deterioration of the youth labour market. That should be a policy priority but unfortunately the government is largely silent on that issue. Overall, the Australian labour market is just staggering along.
The Australian Bureau of Statistics (ABS) published the Labour Force data for September 2011. It shows that a labour market that has arrested the decline evident in the previous two months but is barely keeping pace with underlying population growth and shedding working hours. The data is not bad but it is certainly not good and points to a weak economy overall. The best I can say about today’s data release is that the labour market is now not accelerating in reverse gear. How long that remains is anyone’s guess in these uncertain times where governments have largely abandoned any plans to provide fiscal support to help the economies grow. Overall, the Australian labour market is very tepid at present with a downward bias.
The laboratories are multiplying. We are in an interesting period – I say that in an intellectual sense only – where stark policy decisions have been taken based on certain theoretical economic claims and regular data is arriving which allows us to assess the viability of those claims. So as a researcher it is interesting. As a person I don’t find it interesting that governments are prepared to gamble with peoples’ lives in a self-serving way to appease the elites that fund them. For many years we have had Japan as an Modern Monetary Theory (MMT) laboratory. I gave a talk here in Maastricht yesterday and asked how any mainstream economic theory could explain Japan over the last two decades or so. By any standards if the mainstream macroeconomic theories were of any value then Japan should have very high interest rates and accelerating inflation and the government should have gone broke. It hasn’t and that tells you the value of mainstream theory. Now we have various fiscal austerity experiments being undertaken and the data is coming in daily to tell us that the claims made about the certainty of a “fiscal contraction expansion” are spurious. The most recent British labour force data released this week provides a very interesting laboratory terrain. Two geographic regions within the same nation, two governments (of different status) and two very different economic policy approaches. Result: one side of the border the labour market deteriorates, the other side it improves. So this blog is a tale of those two labour markets – one south of a border the other north. The data provides further evidence that fiscal austerity damages economic prosperity.
Yesterday, the June quarter National Accounts came out showing a real GDP growth spurt. As I noted yesterday, the results should be treated with caution because they apply to the period April to June, the strong growth was largely driven by inventory accumulation, and the household consumption behaviour runs counter to more recent retail sales data. Moreover, national accounting data is typically revised when the next quarter results are known. The other cause for caution in thinking that the Australian economy is really growing above trend is that more recent data is not good at all and it is difficult rationalising the poor data results with the vision of a booming Australian economy. Today, there was more bad news when the Australian Bureau of Statistics (ABS) published the Labour Force data for August 2011. It shows that the labour market has gone backwards for the second consecutive month with total employment declining and full-time employment falling again. It shows unemployment rising further and the unemployment rate at 5.3 per cent. More worrying is that the BS broad labour underutilisation rate (underemployment plus unemployment) rose to 12.3 per cent over the last quarter. This is not an economy that is “bursting at the seams”. The labour market is in reverse gear and accelerating.
With the US politicians are mired in a self-aggrandising dispute about who is best to manage a policy of fiscal austerity. Meanwhile, Rome burns around them. I know Americans like to talk about how free their nation is but while their elected representatives grossly indulge themselves in anti-intellectual disputes largely to console the demands of their corporate slave masters a growing number of US workers are being denied the freedom to earn a basic living. The latest data shows that the labour market has deteriorated again and the economic recovery is being undermined by those same elected representative. The US labour market is now looking very grim.
Despite the up-beat rhetoric of the government and the mainstream media about how strong the Australian economy is as a result of our alleged “once-in-a-hundred-years” mining boom and their constant assertions that we are at full employment and so a budget surplus has to be pursued with vigour and at all costs to prevent an inflation break-out, the labour market has been struggling. Today, the Australian Bureau of Statistics (ABS) of the Labour Force data for July 2011 shows the labour market has gone backwards. Employment was down marginally with only net part-time employment growing and unemployment rose to 611,600 (up 18,000). The unemployment rate jumped from 4.9 per cent to 5.1 per cent. The overall scene is very subdued and far from the “bursting at the seams” rhetoric that we hear in the daily media. The headline discussion, however, should be the appalling state of the teenage labour market who continue to lose jobs. The Australian economy is nowhere near full employment and thing worsened in July 2011.
It is always time to celebrate when unemployment falls and participation rises it. But when unemployment is 591,000 and it only falls by 2,600 which means at the one decimal point level the unemployment rate remains constant you realise that employment growth is barely keeping pace with population growth and the labour market, still damaged by the crisis, is not nothing much is happening at all in the labour market. This is the conclusion I draw after today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for June 2011. It was good to see full-time employment growing again after two months going the other direction but the overall scene is very subdued and far from the “bursting at the seams” rhetoric that we hear in the daily media. The headline discussion, however, should be the appalling state of the teenage labour market who continue to lose jobs. The Australian economy is nowhere near full employment and the slack remained about constant in June 2011.
I am giving a presentation tomorrow in Melbourne at a conference on Annual Skilling Australia and Workforce Participation Summit. My topic is Making Australia a “full employment economy” and that topic stands out from the others which are all about the mainstream pre-occupations of participation and training. My view is simple – if you offer someone a job and a training slot you solve the participation problem and provide them with a paid-work environment to develop their skills. The most effective skill acquisition comes from training within a paid-work context. I am also talking about how workers get trapped in a low-skill, low-pay circle of disadvantage and the increasingly casualised Australian labour market is reinforcing that pathology. This proposition, of-course, runs counter to the mainstream view that has justified the growing precariousness of work in Australia (and elsewhere) as being a market response to the desire by workers for more flexibility. They also argue that casual work is a “stepping stone” into better jobs and provides unskilled workers with a transition from low pay to high pay. The evidence does not support the mainstream view – why would we be surprised about that. The evidence is categorical – casual work traps workers into low-pay and precarious jobs.
The Australian Bureau of Statistics (ABS) released the Labour Force data today for May 2011 which shows that the labour market is in a very weak state. Full-time employment collapsed further (having falling sharply last month) and part-time employment growth was very weak. Employment growth is failing to keep pace with population growth which means that no dent is being made in the very high labour underutilisation rates. Total working hours barely moved and total labour underutilisation (the sum of unemployment and underemployment) rose from 11.9 to 12.2 per cent. The teenage labour market remained in an appalling state. Even the usually optimistic bank economists (who predicted that employment growth would have been much stronger than it was) are starting to sound circumspect in media interviews today – “weakness”, “softness”, “poor result” – were descriptors that were heard today. The Australian economy is nowhere near full employment and the slack increased in May 2011.
The Australian Bureau of Statistics (ABS) released the Labour Force data today for April 2011 which shows that employment and participation contracted sharply over the last month. The data confirms recent trends (March being the outlier) that the labour market is not very robust at present. Total working hours also contracted sharply. With full-time employment sharply negative, and modest part-time employment growth – I also suspect that underemployment rose again this month. I do not consider this data supports the popular view being promoted by politicians and bank economists that we are close to full employment and interest rates will have to rise. My view is that there is a lot of slack left in the economy. A stunning aspect of this observation is that teenagers continue to suffer employment losses having lost 73 thousand jobs overall since the crisis then recovery began. The other reality is that trend employment growth is barely keeping pace with population growth so unemployment is hovering at high levels. If the “once-in-a-hundred-year” mining boom was really delivering a bounty then we should be eating into unemployment and underemployment. The reality is that the Australian economy is, at best, growing modestly with most regions close to contraction.