After all the forecasts and speculation, now we know the worst. Today’s numbers from the ABS lay out the catastrophic impact of COVID-19 on the Australian labour market.
Total hours worked have decreased in just one month by 9.2 per cent. The scale and speed are difficult to comprehend. By comparison, in the major recessions of the 1980s and 1990s hours worked decreased by 6 per cent – but that was after 18 months.
Decreases in hours worked have been much larger for females than males. And Queensland and NSW have so far fared better than other States.
Predictions of much larger job losses for the young have been proved correct, with workers aged 15 to 24 years losing about 11 percent of employment – compared to 3.4 per cent for those aged 25 to 54 years and 4.3 per cent for the over 55s.
The official rate of unemployment in April 2020 rose to 6.2 per cent. This is the highest rate since July 2015. But it may not seem a big rise when a new Great Depression is being predicted.
This is one of those times when you need to read the fine print. To calculate its official rate the ABS follows the International Labor Organization convention in classifying employment and unemployment.
These conventions include classifying as employed workers who worked zero hours but were still being paid or who believed that had a job to go back to. This is important because the JobKeeper scheme means that many workers in Australia fit exactly these categories.
And it does make a difference. Helpfully, the ABS has provided an https://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/6202.0Main%20Features20Apr%202020?opendocument&tabname=Summary&prodno=6202.0&issue=Apr%202020&num=&view= an adjusted rate of unemployment including these workers. This number looks much more what we have been seeing from the US and Canada – an unemployment rate of 11.7 per cent in Australia.
Under-employment is also an important part of the story. Workers who kept their jobs are now much more likely to be working less then their desired hours. In fact, 50 per cent more likely. The rate of under-employment between March and April increased from 9.8 per cent to 13.7 per cent.
Not only this, but many workers have also withdrawn completely from looking for work. In the past month the Labour Force Participation rate fell by 2.5 percentage points. Again, there has been a bigger negative impact on females than males – with decreases respectively of 2.9 and 2.1 percentage points.