Modern Australian
Men's Weekly

.

The end of JobKeeper wasn't a blip. It might have cost nearly 100,000 jobs

  • Written by Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

At its peak, more than 3.8 million Australians were on JobKeeper — three in every ten Australian workers.

Adding in those workers already employed by government, it meant four in every ten received a paycheck that originated from government, more than in Russia.

Yet when JobKeeper ended at the end of March, it looked like a mere blip in employment. The unemployment rate actually fell, for the sixth consecutive month.

The Bureau of Statistics said the cutoff had no “discernible impact”.

Treasurer Josh Frydenberg went further. The economy had “strengthened, even after the end of JobKeeper”.

Since the end of JobKeeper 132,000 people had come off income support.

The treasurer is right. After March the number of Australians on JobSeeker and related payments fell 9%.

Changed rules pushed people off benefits

But it’s possible for people to come off benefits at the same time as people are losing jobs, especially if something else is driving them off, as it was at the end of March.

At the end of March the coronavirus supplement that topped up unemployment benefits stopped. The payment dropped from $715.70 to $620.80 per fortnight.

And job seekers were once again required to search for a minimum of 15 jobs a month, climbing to 20 from July.

Read more: New finding: jobseekers subject to obligations take longer to find work

While burdensome for employers (if all of Australia’s job seekers actually apply for those jobs, employers will be lumbered with 17 million applications per month, climbing to 23 million) it’s also unhelpful for job seekers.

There’s evidence to suggest job seekers get real jobs sooner if they don’t have to go through charades.

The “dob in a job seeker” hotline will have further dissuaded them from applying for benefits.

These changes make the drop in the number of claimants understandable, much more so than the suggestion they got jobs, which in net terms they did not. Employment fell after the end of March, by 30,600 according to Bureau of Statistics figures which will be updated on Thursday.

As many as 97,000 fewer workers?

How is a drop in employment consistent with a drop in the unemployment rate?

The unemployment rate fell to 5.5% in April not because employment grew, but because 33,600 people who had previously identified themselves as unemployed dropped out of contention, changing their status to “not in the labour force”.

Had they continued to not work but continued to describe themselves as “unemployed”, the unemployment rate would have been 5.7%.

And it would have been higher still if those shifted to zero or reduced hours with the end of JobKeeper had been called unemployed. Employment fell 0.2%, but hours worked fell 0.7%.

Read more: Josh Frydenberg has the opportunity to transform Australia, permanently lowering unemployment

My rough maths suggests this means the number of Australians actually working might have fallen by 94,100.

An analysis prepared by Melbourne University employment specialist Jeff Borland for the Fair Work Commission puts the number of jobs lost between 45,000 and 97,000.

He gets 45,000 by comparing the number of people who left employment between March and April this year with the number who left between March and April in previous years.

He gets 97,000 by comparing the average (rapid) growth over the previous four months as we emerged from recession with the growth between March and April.

One in 11 JobKeeper jobs

A touch over one million Australians remained on JobKeeper to the end, suggesting that as many as ten in every 11 of them kept their jobs when JobKeeper ended. One in every 11 might have lost their jobs.

The end of JobKeeper wasn't a blip. It might have cost nearly 100,000 jobs Young workers run the risk of being scarred. Mangostar/Shutterstock

The Australians most knocked around were the youngest. Since the end of JobKeeper, women under the age of 30 have on balance lost jobs while women over that age have continued to gain jobs.

Men under the age of 40 have lost jobs while men over that age have gained them.

The treasury’s deepest concern about jobs since the start of COVID (it mentions it right at the top of that section of the budget) has been scarring.

The unlucky young people who happen not to secure jobs during downturns can fail to secure them for years, being passed over by newer, fresher young people who are barely affected.

Even where these people get jobs, if they enter the market when the youth unemployment is five percentage points higher than normal, they can expect to earn roughly 8% less in their first year, and 3.5% less after five years. It takes about a decade for the effect to fully disappear, and it’s worse for women than men.

Vacancies, plus mismatch

Australia’s record-high vacancy rate (2% of all jobs were vacant at the end of March) makes it look as if scarring needn’t be much of a concern. But jobs are vacant for reasons.

It might be that the mix of jobs we will need is changing, or that employers can for the moment no longer rely on migration to give them the mix of skills they want. Or it might simply be that the general bounceback in jobs has been so fast that the right employers and the right workers are still working out how to find each other.

Read more: The four GDP graphs that show us roaring out of recession pre-lockdown

Many businesses will die as a result of the end of JobKeeper. Businesses are forever dying. Some have been kept alive for longer than they would have been, and some have exited JobKeeper into a changed environment.

We’ve managed to end JobKeeper without a catastrophe, but that doesn’t mean there hasn’t been damage, and it doesn’t mean young lives won’t be scarred.

After a textbook exit from a recession — the sharpest V-shaped recovery ever — it would be awful if we left a slice of young Australia behind.

Authors: Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

Read more https://theconversation.com/the-end-of-jobkeeper-wasnt-a-blip-it-might-have-cost-nearly-100-000-jobs-162744

The Cost of Converting a Shipping Container into a Liveable Space

Container conversions often require more planning and labour than expected Early costs include foundations, framing, and structural reinforceme...

Marriage Celebrant for Modern Lovers Who Want Something Different

Many couples today feel pressure to follow the same wedding traditions their parents or grandparents did. They might sit through long ceremonies that ...

Why Everyone’s Signing Up for Fitstop’s 6-Week Challenge (Again)

Hint: It’s not just for the gains. Somewhere between the endless TikTok fitness hacks and the unrealistic “30-day shred” promises, we forgot ...

The Mental & Financial Benefits of Minimalist Caravan Travel

Minimalist caravan travel has grown in popularity, not just for its practical appeal but also for the sense of freedom it brings. With the rise of c...

Sydney Property Lawyers: Your Complete Guide to Smooth Transactions

Navigating the Sydney property market can feel like traversing a minefield, can't it? The process, laden with legal jargon and complex procedures, o...

Electrician Perth: Your Go-To Guide for Home Electrical Safety

When it comes to keeping your home safe and sound, electricity is something you simply can't afford to ignore. Faulty wiring, outdated switchboards...

Why More Homes and Businesses Are Choosing an Electric Sliding Door

Convenience, aesthetics, and technology often go hand in hand when it comes to architectural choices. One solution that delivers all three is the el...

Real Estate Rubbish Removal That Keeps Properties Market-Ready

When it comes to real estate, presentation is everything. Whether it’s a property for rent or sale, first impressions count. Cluttered backyards, ...

Real Estate Rubbish Removal That Keeps Properties Market-Ready

When it comes to real estate, presentation is everything. Whether it’s a property for rent or sale, first impressions count. Cluttered backyards, ...

Ironman 4x4: Building Complete Suspension Systems for Australia

The name Ironman 4x4 resonates throughout Australia's 4WD community, particularly when discussing Ironman suspension solutions. This Australian bran...

Pontoon Boats - The New Must-Have for Luxe Canal Homes

If you are living on a canal in Australia, you are already living the dream. But living near the water without a boat is like owning a horse without...

Perth Airport Transfers: Choosing the Right Service

Touching down in a new city can be exciting, but let's be honest, it can also be a bit stressful. After a long flight, the last thing you want to wo...

How to Save Smart: Cheapest Travel Insurance for Schengen Visa without Cutting Corners

Picture this: you’ve found a last-minute flight to Milan, your hotel booking comes with breakfast and a rooftop view, and your itinerary is ready ...

Keeping Lone and Remote Workers Safe: Employer Duties and Practical Solutions

In Australia, thousands of employees work alone, in remote locations, or in direct contact with the public every day. While these roles are critical...

How Your General Dentist Supports Your Smile Over a Lifetime

A healthy grin is more than just a desirable feature; it reflects overall health, well-being, and self-esteem. Our oral health needs evolve from chi...

A Brighter Smile in Sydney: Expert Cosmetic Dentists and Veneers Solutions

A confident smile can open doors, boost your self-esteem, and leave a lasting impression. In Sydney, more people than ever are turning to cosmetic den...

How To Keep Vase Flowers Fresh Through Australia’s Coldest Months

Winter flowers develop slowly, which gives them stronger structure and longer vase life Heat from indoor environments is the biggest threat to th...

Artificial Intelligence is Powering the Growth of Australian Telehealth Services

Many Australians have traditionally experienced difficulties in accessing timely and quality healthcare, especially those who live in rural or remot...