I’ve never seen so many of them. Signs everywhere, telling us what’s happening in the economy. Above is one I saw in Melbourne this week.
Restaurants are advertising for staff in their front windows all over the place. Even though there are still a lot of vacant shopfronts for lease, the businesses that survived 2020 seem to be hiring. I’m seeing far more of these ads than I would usually, and some go so far as to specify no experience required — which is a concrete sign that the jobs market, which was hit hard by COVID, is getting tighter again.
You shouldn’t trust your eyes alone, of course. Anecdote and observation can be skewed. But the data backs up observation in this case.
According to the federal government’s labour market data, job ads soared in March and rose further in April — to their highest level since the extremely strong economy we had just before the GFC.
We can see the strength in the official unemployment rate too. Down to 5.5% in April, the Australian Bureau of Statistics (ABS) confirms, as the economy appears to shrug off the end of JobKeeper.
JobKeeper ended in March. I’m guilty of forecasting that its conclusion was going to be a terrible blow. And yes, jobs were lost. Part-time employment fell by 65,000 in April. But full-time employment rose by 34,000.
It’s not a terrible result. With job ads so high, the jobless can have some hope. Being jobless in an environment where hiring is strong is a different, much less hopeless, situation than being jobless when nobody is hiring.
In March, nearly 800,000 Australian were unemployed. By April, 22% of them moved into jobs. Not bad at all! (Please don’t misunderstand what I’m saying here: net unemployment didn’t drop by 22%. It dropped by 4%. But the people who are unemployed in April are not the same as those in March. A lot of the newly unemployed will be jobless for only a short stint. The point is, hiring is strong. Being unemployed need not be a long-term proposition now.)
It’s the economy, stupid
For a long time, the Coalition couldn’t shake off the Costello legacy of fiscal prudence. It talked a big game on tight budgets — even when it wasn’t actually delivering them. The problem was stingy fiscal policy wasn’t delivering the “jobs and growth” that formed the other leg of its rhetorical strategy.
The pandemic delivered a crash course to Josh Frydenberg and Scott Morrison on the importance of government spending in bringing the unemployment rate down. The latest budget shows they were paying attention. It is a spending budget. The government has been rabbiting on about jobs and growth for ages — now it has finally unleashed the one policy that can make those things happen.
As they say in US politics: “It’s the economy, stupid.” Morrison would love to be able to point at a record low unemployment rate on the campaign trail. Don’t expect tough budgets until after the next election.
Who serves our food?
The signs in restaurant windows are a particularly interesting phenomenon. The hospitality industry is desperate for staff because it is staffed disproportionately by visitors to Australia. As the next chart shows, about 15% of food and hospitality workers are visa holders of some kind (and this counts only those staff who are on the books).
Australia has far fewer visa-holding visitors now because of its closed borders — that means more Australians working in restaurants. The number of potatoes being peeled by Australians in commercial kitchens has probably never been higher.
One thing restaurants are likely to find is that when you employ Australians you need to pay more. So it’s interesting that this sector has had the highest wage rises over the recent quarter. (Albeit this is affected by the Fair Work Commission decision to finally bring through award wages increases that were originally scheduled for last year. What’s more, hospitality businesses might actually be paying the award a bit more if they’re employing Australians.)
But even if the desperation for hiring is particularly noticeable in the hospitality sector, the improvement in the labour force overall is gladdening. The numbers are amazing. Job ads are 43% higher in Victoria than pre-COVID.
This is one hell of a recovery. It’s a testament to the power of fiscal policy and a massive black eye to the idea of austerity.
How’s the job situation going for you? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication in Crikey’s Your Say section.
Jason is so right to draw attention to the disappeared student and temporary migrant workers, whose places are now being filled by permanent residents. Surely this accounts largely (?) for the decrease in unemployment as Australians fill the now vacant jobs on offer.
I haven’t yet seen anyone produce the actual number of jobs in the country this year, last year and the year before. Has there been any increase? How many jobs have been lost and how many new jobs have been created?
These figures would prove whether or not Morrison has any right to claim that his government has helped reduce unemployment.
The shifts in employment are probably due to the changes in the labour force brought about by Covid-19.
I would also add that the temporary visa schemes have been abused by employers. Foreign labour has been brought in incorrectly on the 457 visa specifically to provide a cheaper, poorly-protected labour force than is formally acceptable in Australia. That was not at all what that visa was for.
Ann Pavett
Of course you’re right Ann. Imagine having to employ locals who want to be paid award wages, plus super. Shudder.
It has certainly proven that migration creates jobs is bullshit.
It blows my mind that you can rise to the rank of federal treasurer, and still it takes a pandemic to force you to the realisation that government spending dollars into the economy, so it can function, isn’t a bad thing.
If Frydenberg worked at a petrol station, he’d chase away the customers so at the end of the financial year he could proudly point to the giant tank of fuel still in his possession.
But is this a sincere light bulb moment of Josh’s, or just something the self-proclaimed Thatcher-fan is going to hold his nose and do til the election is over, before getting back to the austerity that the Libs thrive on?
I’m guessing it will be double-down austerity the minute the election night victory is called. Leopards don’t change their spots, as Morrison shows over and over again. So why have any hope that Frydenberg will?
The only hope is that they don’t win the next election.
Actually, Morrison does change his spots, as long as it looks like winning the next election. Maybe Frydenberg is the same.
very true, i guess what i mean is sincere, long term spot-changing that can be counted on 🙂
A bit too mea culpa Jason. Jobs are good. But I suspect the targeted inequity of the flood of government money has made employers much richer than the cost of paying a little more in wages.
Compensation for having to pay award wages instead of pocketing the proceeds of wage theft?
Successive governments have frigged so much with the definitions of unemployment etc., to hide their incompetence, that it is possible for them to interpret the figures to come to any conclusion they want.
We need a courageous, ethical government to sort out the definitions so we can see whats really going on.