Australia's unemployment figure rose to
6.2% in the latest announcement, with 600,000 jobs lost so far due to the coronavirus shutdown. Despite being the steepest monthly rise on record, according to many experts, the real shape of employment is much worse due to the artificial nature of the JobKeeper package, the record number of underemployed people, and the sharp rise in people not even looking for work.
Young people are experiencing even tougher conditions, with the casual workforce, hospitality sector, and gig economy all likely to suffer further in 2020 and beyond.
Coronavirus continues to have a disastrous
effect on employment figures around the world. Social isolation and
government-led shutdowns have decimated entire industry sectors, with the
Australian economy certainly not immune. 594,300 people lost their jobs in
April as restrictions affected thousands of businesses across the country. The
official jobless rate, published by the Australian Bureau of Statistics, rose
1% from 5.2% to 6.2%.
While heart-breaking, this number is
somewhat conservative compared to the economic reality and likelihood of things
The Australian government themselves are
expecting a 10% peak in unemployment later this year, stabilising somewhat in
2021 before falling back to 6.5% in 2022. However, some commentators are
forecasting even rougher conditions and more prolonged recovery times. In the
Commonwealth Bank's March Quarter update, unemployment is expected to reach 9%
this year, 8.5% in 2021, and 6.5% in 2022.
Unemployment numbers alone fail to tell the
entire truth, as record numbers of people leave the job market and
underemployment becomes the new normal. The participation rate dropped from 66%
to 63.5% over the month, which is the lowest rate in 16 years. According to
Bjorn Jarvis, the head of labour statistics at the ABS, "The large drop in
employment did not translate into a similar-sized rise in the number of
unemployed people because around 489,800 people left the labour force."
There is a very good reason why so many
people left the job market, with many businesses shut or struggling to stay afloat.
National job ads slumped by almost two-thirds in April, and many businesses
that remained afloat only did so with the help of the JobKeeper package.
According to Capital Economics analyst Marcel Theliant, "What's more, all
employees who received the Government's JobKeeper wage subsidy were counted as
employed, even if they didn't work any hours."
According to many experts, the real
unemployment figures would be much higher if they accounted for temporary
lay-offs or people who worked zero hours. According to RBC Capital Markets
chief economist Su-Lin Ong, "It suggests that if Australia adopted a
similar definition to North America for temporary lay-offs or worked zero
hours, the Australian unemployment rate would be at 11.7 per cent rather than
6.2 per cent."
Underemployment is another huge concern,
especially for young people and those in casual employment. Underemployment
surged by more than 600,000 to 1.8 million people over the month, which takes
the rate to a record high of 13.7%. This is a sharp rise of almost 5% in just a
month. Underutilisation, which adds unemployment and underemployment numbers
together, also jumped to a record high of 19.9%. The biggest problem with all
of these numbers, however, including government and industry forecasts, is the
uncertainty and risk that accompanies any return to employment.