Fall in employment accelerates as lockdowns continue
The unemployment rate continues to fall, now sitting at 4.5% seasonally adjusted, the lowest since November 2008. But this headline disguises the true story, which is a fall in employment of 146,000 people.
The problem is that people are exiting the labour market – 170,000 of them during August in the ABS labour force figures released today. That is, they are no longer employed or seeking work.
As well as a falling participation rate, underemployment remains a real problem. This rose in August, meaning that many of those remaining in the labour force are not working as much as they would like.
Another worrying issue is that the premise of JobKeeper was to keep employees connected with their workplace so that when the recovery came it would be relatively seamless, allowing a quick regeneration of business activity.
The concern now must be that – given the falling workplace participation rates we are seeing, and the length of time lockdowns are taking – whether that connection has been permanently damaged and will it hinder the recovery.
The eastern states’ ongoing lockdowns are the key to both participation rate and underemployment. The July figures gave us a taste of the start of the NSW lockdown, but today’s data reflects the full extent of the problem in NSW and the new lockdowns in Victoria, ACT and Queensland.
In NSW, the first two weeks in August alone saw another 173,000 reduction in employment in the state, with a similar number of people leaving the labour market. This followed the 36,000 fewer people employed in July.
Queensland also saw a fall in employment of 30,000 jobs, while there was an increase in employment across Victoria (of 29,000 jobs, with the latest lockdowns yet to be fully captured in the data) and Western Australia (of 12,000 jobs).
The August data shows total hours worked across Australia fell by 3.7 percent or 66 million hours, seasonally adjusted. NSW hours fell by 34.9 million – bringing hours worked in the state to below its April 2020 low.
Victoria saw a fall in its monthly hours worked of 16 million, reflecting the start of its latest lockdowns, while Queensland’s fell by 19 million hours. There were some modest increases in hours worked in South Australia and Western Australia.
Across the nation, the underemployment rate has increased again by 1.0 percentage point to 9.3%, albeit still below the highs observed between April and October last year. Of this, NSW, Victoria, QLD and the ACT all saw increases of between 0.7 and 1.0 percentage points in their underemployment rates.
Over August, more than 1.8 million people indicated that they worked fewer hours than usual as a result of ‘No work, not enough work available, stood down’, or for other reasons not related to leave, standard arrangements, or bad weather. 760,000 of these were in NSW, 550,000 in Victoria and 360,000 in Queensland.
It is clear that lockdowns have a significant impact on the labour market. Until the economy can more fully open, employment, participation in the labour market and underemployment figures will continue to record ups and downs across all the states and territories.
- There were 146,000 fewer people employed across Australia. Lockdowns are a key driver of this fall, with NSW and ACT the only state/territories to have fewer people employed currently compared to pre-pandemic March 2020.
- For those still in the labour force, there was a significant reduction in hours worked, with 1.3 million people reported as underemployed, or 9.3 percent of the labour force.
- Across the nation, there were 77,000 fewer males employed and 69,000 fewer females employed, indicating a more even impact this month compared to the initial lockdown figures in July.