Labour Market Growth Fueled by Public Services Industries
The latest labour market report released by the Australian Bureau of Statistics (ABS) reveals that public services industries have shown the strongest growth in job numbers in the country. According to the report, the three leading industries experiencing the most significant growth are healthcare and assistance, public administration and safety, and education and training. This growth is in stark contrast to the decline in job growth observed in the professional, scientific, and technical services sector.
Bjorn Jarvis, the head of labour statistics at ABS, noted that the recent jobs and hours growth has been driven primarily by activity in public services rather than being a result of broad-based strength across the entire economy and labour market. This suggests that the recent surge in job numbers is concentrated in specific sectors rather than being evenly distributed.
The demand for healthcare workers and professionals is expected to increase further as Australia’s population ages. A recent survey by Jobs and Skills Australia predicts a shortfall of healthcare workers by 2050. This highlights the importance of continued investment and support for the healthcare industry to meet future demand.
Slow Growth in Hours Worked
The ABS report also recorded the slowest annual growth in hours worked since March 2021. Bjorn Jarvis attributed this slower growth to a larger number of people taking leave or waiting to start work in January, as well as continued weakness in industries reliant on discretionary consumer spending. These factors have contributed to a decline in hours worked, indicating potential challenges in certain sectors of the economy.
Low Unemployment Rate but Job Vacancies Decline
In April, Minister for Skills and Training Brendan O’Connor highlighted the country’s low unemployment rate of 3.8 percent under the current government. The Albanese government claims to have generated over 780,000 new jobs, surpassing the achievements of any other first-term government on record. However, the ABS reported that job vacancies fell further to 4.3 percent, indicating a decrease in available positions. Despite the decline, there is still significant demand for workers, contributing to employment growth.
Rise in Multiple Job-Holders
The ABS report also revealed an increase in the number of multiple job-holders in April 2024. This rise can be attributed to a decline in real wages over the past three years, coupled with inflation outpacing wage growth. Greg Jericho, Chief Economist of The Australia Institute, highlighted that 7.1 percent of jobs in Australia are someone’s second or third job. He expressed concern over this trend, emphasizing that it indicates a growing problem of working poor. While it is positive that Australians are finding work, the fact that nearly one million people need to seek additional hours from secondary jobs suggests financial strain.
Minimum Wage Increase
In a move welcomed by workers’ unions, the Fair Work Commission declared a 3.75 percent increase in modern award rates. This increase, combined with the scheduled 0.5 percent rise in the Superannuation Guarantee Rate, aims to keep up with inflation and provide a small real wage increase for employees. Unions applauded the decision’s recognition of undervalued workers in feminized industries. The increase is expected to benefit women, who make up the majority of workers in these sectors.
However, the Australian Industry Group (Ai Group) expressed concerns about the impact on businesses. Innes Willox, CEO of the Ai Group, highlighted the need for productivity improvements to offset the increased costs faced by employers. He emphasized that without increased productivity, businesses may be forced to pass on higher wages to consumers or cut back on employment.
Government Responses and Priorities
The Liberal Party criticized the Albanese government for not adequately addressing inflation, which has left Australians worse off. Shadow Minister Angus Taylor argued that strong economic management is lacking and called for a focus on restoring Australia’s standard of living.
On the other hand, Treasurer Jim Chalmers defended the government’s approach, asserting that they are striking the right balance between addressing inflation, providing cost of living relief, supporting sustainable economic growth, and strengthening public finances.
In conclusion, the Australian labour market has seen significant growth in public services industries, while other sectors have experienced declines. The demand for healthcare workers is expected to continue rising as the population ages. Despite a low unemployment rate, job vacancies have declined, highlighting potential challenges in certain sectors. The increase in multiple job-holders suggests financial strain on workers. The minimum wage increase has been welcomed by unions but has raised concerns for businesses. The government faces criticism for its handling of inflation and economic management, with calls for a focus on restoring living standards.
