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Australia labour market – one step forward up a gigantic mountain

The Australian labour market recovered somewhat as the governments eased the lockdown restrictions in the service sector. The latest data from the Australian Bureau of Statistics – Labour Force, Australia, June 2020 – released today (June 18, 2020) shows that employment rose by 1.7 per cent. However, participation also rose as job opportunities increased, and the labour force change outstripped the employment increase, which meant that unemployment rose by 69,300 thousand. The rise in employment was totally accounted for by part-time jobs growth, which is a worrying sign. The decline in full-time employment signals that some businesses are closing or others are restructuring their workforces towards more precarious work. The official unemployment rate of 7.4 per cent continues to underestimate the actual impact given that the labour force is still 384 thousand lower than it was in March 2020. Adding those ‘hidden unemployed’ workers back to the underutilisation rate suggests that 22 per cent of the available labour supply is not working in one way or another (unemployment, hidden unemployment, and underemployment). Any government that oversees that sort of disaster has failed in their basic responsibilities to society. It must increase its fiscal stimulus and target it towards large-scale job creation.

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How hard is it for the government to create some jobs?

The – Report of the Special Rapporteur on extreme poverty and human rights – for the UN was released this week (July 7, 2020). It was Philip Alston’s last report in that role. It is a shocking indictment of the way neoliberalism has distorted our societies and the way the governments with the capacity to ‘move mountains should they wish’ have been co-opted as agents of capital and perpetuate those distortions. The Report is 19 pages of horror. It also resonates with the latest information coming out of Australia’s Closing the Gap campaign, which aims to bring indigenous Australians up to the material level of non-indigenous Australians. The first ten years of the campaign have been an abject failure. And the latest targets don’t inspire any confidence that the outcomes will be any different. A lot of talk. A lot of consultants. But little effective action – for example, like just creating some jobs to reduce unemployment, allow for income security and poverty alleviation. How hard is it for the government to create some jobs?

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US labour market reverses direction but for how long?

On July 2, 2020, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – June 2020 – which shows that the US labour market response to the relaxation of lockdown controls gained pace in due, although the question that remains is how long can the governors of the states allow the relaxation to continue given the alarming spread of disease. Already, nations such as Spain are returning to lockdown as their hospital systems become overwhelmed by the ‘second wave’ following easing. And US states such as Texas, Arizona and Florida are approaching the time when they will have to return to some form of lockdown given the health crisis that premature easing has created. The problem is that the lack of economic support from the Federal government makes those decisions difficult to take and extremely damaging for the unemployed. It is almost unbelievable that the Republican politicians are endorsing cutting unemployment support. But, in June, as the economy reopened, the payroll numbers improved as you would expect with a 4.8 million increase in jobs net) and the official unemployment rate rate falling to 11.1 per cent. The numbers filing for unemployment insurance are now falling but now top 49.2 million since March 7, 2020. A further 1.4 million filed in the week ending June 27, 2020. How far the recovery can go depends on two factors, both of which are biased negatively: (a) How many firms have gone broke in the lockdown? (b) Whether the US states will have to reverse their lockdown easing in the face of a rapid escalation of the virus in some of the more populace states. But I do not see appropriate policy responses in place. The US government should have guaranteed all incomes and introduced large-scale job creation programs and a Job Guarantee as an on-going safety net.

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Australian labour force data – labour underutilisation rate rises to 25.1 per cent

Whatever way you want to interpret it, the Australian labour market continued to deteriorate in May 2020. The latest data from the Australian Bureau of Statistics – Labour Force, Australia, May 2020 – released today (June 18, 2020) continues to tell a shocking tale. All the main aggregates moved in an adverse direction. Employment fell by 1.8 per cent (227,700). Unemployment rose by 86,700 thousand. But that is a gross understatement of the problem given that the participation rate fell by 0.7 points, which meant the labour force fell by 142 thousand. Without the fall in the participation rate in May 2020, the unemployment rate would have been 8.1 per cent rather than its current value of 7.1 per cent). But relative to August 2019 (peak participation), the unemployment rate would have been 11.7 per cent. The broad labour underutilisation rate is now at 20.2 per cent. There are now 2,639.1 thousand workers either unemployed or underemployed. That number swells to 3,286.5 (or 25.1 per cent) if we add the rise in hidden unemployment back into the ‘jobless’. Any government that oversees that sort of disaster has failed in their basic responsibilities to society. Its fiscal stimulus is totally inadequate.

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Worst is over for Australian workers but a long tail of woe is likely due to policy failure

Today (June 16, 2020), the Australian Bureau of Statistics released their latest weekly employment data taken from Australian Tax Office data. They have slowed the release cycle on this data (for reasons they have not disclosed), so it is a month since I have analysed it. The latest edition came out today – Weekly Payroll Jobs and Wages in Australia, Week ending 30 May 2020 – which covers the new data from May 2, 2020 to May 30, 2020. The monthly labour force data to be released on Thursday covers a period that ends around May 12, 2020, so today’s data provides a more recent snapshot of the state of affairs. At the beginning of May, the data was suggesting that the worst of the job losses were over. The severity of the lockdown has eased a little since then, although the pattern of easing has been quite different across the states and territories. So we might have expected some variations to arise from that. And today’s data shows just that. In the Accommodation and food services sector, where some easing has occurred, jobs are returning, albeit at a slow rate. But in the Arts and recreation services sector, where little change in lockdown restrictions has occurred to date, there has been very little employment growth. The question is how many businesses will go to the wall before we get a more usual scale of operation and interaction. My prediction is that many will disappear and so the recovery in employment will be protracted given how many jobs have been lost to date. A much larger fiscal intervention is required and it has to be directed at workers rather than firms and support direct job creation. The problem now is that the Government is starting to reassert its neoliberal ideology and withdrawing the inadequate stimulus far too early. The future is not looking good. We might be virus free but there will be massive unemployment remaining into the distant future.

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US Labour Market – cheering but it is too early to break out the champagne

On June 5, 2020, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – May 2020 – which shows that the US labour market has responded to the relaxation of lockdown controls in a modest way. I cannot believe that in Donald Trump’s words the US is “largely through” the Pandemic and it remains to be seen whether lockdown rules will have to be reintroduced when the infections rise again. But, for the time being, the payroll numbers improved as you would expect when shops reopened and people went back to work. But I stress this was a modest improvement. The numbers filing for unemployment insurance continue to rise and now top 43.2 million since March 7, 2020. A further 1.9 million filed in the week ending May 30, 2020. There were also some discrepancies noted by the BLS in the survey responses this month which adds to the uncertainty. Overall, the US labour market is in crisis and it remains to be seen how many jobs have disappeared and how many will emerge once the lockdowns are ended. Some 2.6 points of ‘unemployment’ lie outside the labour force (workers giving up looking), and as employment growth increases, those workers will come back into the recorded labour force and be classified as unemployed rather than not in the labour force. So how deep this catastrophe is remains a but uncertain. But I do not see appropriate policy responses in place. The US government should have guaranteed all incomes and introduced large-scale job creation programs and a Job Guarantee as an on-going safety net.

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The job losses continue in Australia but at a slower pace

One bit of good news yesterday was that the Supercars event that has been imposed on the City of Newcastle over the last 3 years will not go ahead this year. This is an event that has massive state subsidies, creates health hazards for local residents, lies about crowd numbers to justify further state subsidies and severely divides the local community. They claim they love Newcastle, but with only a few events possible this year, they are clearly going where the highest subsidies are likely. So that is a relief for the inner city community. But there is not much else that one can be happy about right now. Today (May 19, 2020), the Australian Bureau of Statistics released their latest weekly employment data taken from Australian Tax Office data, which they release and analyse on a two-week cycle. The latest edition came out today – Weekly Payroll Jobs and Wages in Australia, Week ending 2 May 2020 – which covers the new data from April 18, 2020 to May 2, 2020. The data is suggesting that the worst of the job losses are now over, which doesn’t mean where we are at at present is nothing short of shocking. As the lockdown eases, we can now expect more jobs to come back. The question is how many businesses will go to the wall before we get a more usual scale of operation and interaction. My prediction is that many will disappear and so the recovery in employment will be protracted given how many jobs have been lost to date. A much larger fiscal intervention is required and it has to be directed at workers rather than firms and support direct job creation.

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US labour market in peril as a result of political choices made by the US government

I went on a data excursion for part of today to update the flows data from the US Bureau of Labor Statistics. They published the latest JOLTs data last Friday (May 15, 2020) – Job Openings and Labor Turnover Summary – which reveals data up to March 2020. So in a sense it is the calm before the storm. I also reconstructed some of the indicators I compile from that data set which give me a broader impression of what is happening in the US labour market. Clearly, things are going to get worse when the April data is released. We can see that by examining the Department of Labor’s weekly unemployment claimants data, which was updated last Thursday (May 9, 2020). I also updated my state table and map today. Things are looking very bleak. To me, the data tells me that the US is a failed state – incapable of using the capacity the government possesses to advance the well-being, or, in this case, protect the well-being of its people. I am also working on an extended piece on the way the Right and the Left are behaving in this crisis. As usual, the Right are organised and forward-looking putting assets into strategies that will take their agenda to another (pernicious) level. Under the smokescreen of the crisis, they are working to cement changes that will make it even harder for government to advance general prosperity. Meanwhile, the Left appear to be asleep as usual – tweeting their heads off about Biden or Sanders and have taken their eyes off the main game. We have been there before. Even though the US labour market has probably never been here before!

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Australian labour force data – underutilisation rate rises to 23.4 per cent

Whatever way you want to interpret it, the Australian labour market fell off a very steep cliff in the four weeks from around March 12 to April 12. The latest data from the Australian Bureau of Statistics – Labour Force, Australia, April 2020 – released today (May 14, 2020) is shocking. Like all the data releases at the moment. All the main aggregates moved in extremely adverse directions. Employment fell by 4.6 per cent (594,300). Unemployment rose by 104,500 thousand. But that is a gross understatement of the problem given that the participation rate fell by 2.4 points, which meant the labour force fell by 489.8 thousand. Without the fall in the participation rate in April 2020, the unemployment rate would have been 9.7 per cent rather than its current value of 6.2 per cent). Monthly hours of work fell by 9.2 per cent. And the broad labour underutilisation rate is now at 19.9 per cent, after underemployment rose by 4.9 points to 13.7 per cent. There are now 2,639.4 thousand workers either unemployed or underemployed. That number swells to 3,142.6 (or 23.4 per cent) if we add the rise in hidden unemployment back into the ‘jobless’. Any government that oversees that sort of disaster has failed in their basic responsibilities to society. Its fiscal stimulus is totally inadequate.

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US labour market data – we have never been here before!

Last month’s analysis of the US labour force data – Tip of the iceberg – the US labour market catastrophe now playing out (April 6, 2020) – presaged what was to come. We now know more about the size of the iceberg. It is unimaginably large. Words fail really. This is one of those all-time historical events that make the severe crises of the past (early 1980s, 1990s, GFC – look like blips). On May 8, 2020, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – April 2020 – which shows that the US labour market has collapsed into territory never before recorded. And, given that the data released was drawn from samples that went up to April 12 (establishment survey) and April 18 (household survey), and so doesn’t fully capture the extent of the unfolding catastrophe. More recent data released by the US Department of Labor (unemployment insurance claimant data) shows the situation worsened in the last two weeks of April. In the last two weeks of April 2020, more than 9 million extra workers registered unemployment insurance claims. All the aggregates are demonstrating dramatic shifts to the point that graphs are becoming rather binary – the rest of history and now. The employment-population rate plunged 8.7 points to 51.3 per cent, which is the largest monthly fall since the sample began in January 1948. The U6 measure of broad labour underutilisation increased by 14 points to 22.8 per cent. This is the largest monthly rise in this measure since it was first published in January 1994. The situation will get worse. Its already catastrophic and it demonstrates a massive policy failure from the Federal government. Instead of directing trillions into the top-end-of-town, the US government should have guaranteed all incomes and introduced large-scale job creation programs and a Job Guarantee as an on-going safety net. Instead it is watching over people dying and people’s material prosperity being destroyed.

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