Job recovery may be slowing as border closures have tightened: Frydenberg
- Written by Michelle Grattan, Professorial Fellow, University of Canberra
More than half of the 1.3 million people who lost their jobs or were stood down on zero hours at the start of the pandemic had started some form of work by July, according to figures released by Treasurer Josh Frydenberg.
Treasury figures show the national effective unemployment rate at 9.9% in July, compared with a peak of 14.9% in April, with 689,000 gaining effective employment. The official July unemployment rate was 7.5%.
Excluding Victoria – which is in full lockdown combatting a second COVID wave - the national effective unemployment rate would be 9.5%.
The effective unemployment rate includes the jobless looking for work, those who are employed but on zero hours, and those who have left the labour force since March.
Frydenberg said Victoria was a setback however “the jobs recovery across the rest of the country gives cause for optimism”.
But he warned, “high frequency data is showing signs that the jobs recovery may be slowing as state border closures have been tightened.”
The effective unemployment rate is expected to increase above 13% with a rise of about 450,000 effectively unemployed over August and September compared to July. Most will be in Victoria.
The effective unemployment rate is lowest in the ACT (5.2%), Tasmania (7.9%) and NSW (8.5%) and highest in the NT (12.1%), Queensland (11.4%) and Victoria (10.5%). South Australia and Western Australia are both at 9.8%.
NSW has had the strongest recovery with 315,000 people gaining effective employment since April. This is 46% of total effective employment, and compares with NSW’s 32% of the country’s population.
NSW has supported the federal government’s argument for open borders, although its border with Victoria has been shut in light of Victoria’s second wave.
In July, nearly half of those who were employed but working zero hours for economic reasons were from Victoria. This contrasts with April, when only 30% of zero hour workers were in Victoria and about 35% in NSW.
Outside Victoria, the number of people on unemployment benefits is about 3% below the May peak. In Victoria it is 3.8% above its previous peak in May, after a 6.3% rise since the end of June.
By mid August, the number on unemployment benefits had fallen by 22,800 from the May peak, despite an increase of 14,900 in Victoria.
The fortnight parliamentary session beginning Monday will have as the main legislation before it the extension of the JobKeeper scheme and the Coronavirus supplement beyond the end of September. Each would be scaled down.
Authors: Michelle Grattan, Professorial Fellow, University of Canberra
