Using the unadjusted labour force data, the September figures show an unchanged unemployment rate of 6.1%. But this apparent “stability” disguises the deterioration in the labour market.
Not only did employment fall by 30,000 but those not working or seeking to work increased by 45,000. In effect, those who lost their jobs did not even try to get back into the work force.
This is not a one off development. While over the past 12 months employment did increase by 46,000 or 0.4%, those not working or seeking to work increased by 242,000 or no less than 3.7%.
In short, the demand for labour has not kept pace with the growth in the working age population (15 years and over) and retirees and the youngees with no work prospect have increased. This is reflected in the fall to 64.5% in the participation rate from 65.2% a year ago.
How has Australia got to this parlous situation?
While the end of the mining boom has contributed, the main reason is that Australia has a highly regulated labour market which will not allow temporary downwards adjustments in employees’ conditions in other industries. These conditions deter employers from risking additions to investment and jobs.
Unless early action is taken to remove the Fair Work arrangements, the Abbott government will not only fail by a long way to achieve the employment growth of 1.5% in the 2014-15 budget, but also the election jobs target of one million over 5 years.
Publicity Officer: Des Moore (9867 1235)