Modern Australian
Men's Weekly

.

Australia has record job vacancies, but don't expect it to lead to higher wages

  • Written by Jeff Borland, Professor of Economics, The University of Melbourne
Australia has record job vacancies, but don't expect it to lead to higher wages

Job vacancies in Australia are at a record level. The Australian Bureau of Statistics’ job vacancy rate, measuring the proportion of available jobs currently unfilled, is now more than 2.5% – the highest level since the series started in the late 1970s.

This statistic gives weight to all the anecdotal talk about labour shortages in Australia. When employers have difficulty finding workers to hire, job vacancies stay unfilled longer and the vacancy rate increases.

CC BY In normal times a high vacancy rate would indicate economic trouble. It would be evidence of a major underlying problem in the Australian labour market, such as workers not having the right skills for new jobs being created. But these are not normal times. This record job vacancy rate seems largely explained by the impact of COVID-19, rather than signalling a problem with how the labour market is operating. The pandemic has made a roller-coaster of employment numbers. Shutdowns have brought rapid job losses, which have then been regained almost as quickly. Employment in Australia has never grown as quickly in any 12-month period as it did in the year to May 2021, as the economy recovered from the initial shutdown in 2020. CC BY The high job vacancy rate primarily reflects this fast pace, and the difficulty of hiring new workers in a short time. Hiring always lags new vacancies being created. With the bounceback from shutdowns, the lag has become pronounced. Migration effects Pandemic-related limits on international migration - especially temporary migrants, such as international students and working holiday makers – have also contributed to the labour shortages. At the last census (in 2016), the jobs most reliant on temporary migrants in were hospitality (18.3%); food trades and preparation (20.4%); and cleaning and laundry (19.3%). By May 2021 (after a year of recovery and prior to the latest shutdowns in NSW and Victoria), the vacancy rates for these occupations were more than double their averages for 2019. As the effects of COVID-19 on the labour market dissipates, Australia’s vacancy rate should fall. Read more: Local training is the best long-term solution to Australia's skills shortages – not increased migration Effect on wages In the meantime, there is natural interest in whether labour shortages will kick-start wage growth. There some evidence that recent wage growth (over the year to the September quarter 2021) has been strongest in industries with the largest rises in job vacancy rates. Notable examples are professional, scientific and technical services (3.5%), construction (2.6%) and accommodation and food services (2.6%). However, it is unlikely the COVID-related labour shortages are enough to make a permanent difference to wages. Even now, while shortages exist, much of the recovery in employment seems to be happening without big wage increases. In June 2021, when the rate of unemployment rate fell below 5% for the first time since in more than a decade, wage growth was still just a modest 0.44% for the quarter. Read more: Vital Signs: Chill, this week's news on wages points to anything but hyperinflation One reason for the lack of significant wages growth is revealed in the latest labour force statistics from by Australian Bureau of Statistics. The majority of the COVID-19-related changes in employment involve workers being laid off during shutdowns and then returning to their old job. During the national shutdown from March to May 2020, for example, more than 60% of workers on Job Seeker payments retained an attachment to their job. These workers accounted for the entire increase in employment from May to September 2020. For employers, rehiring former workers has removed the need to offer higher wages to attract new staff. For higher wages growth over longer term we will have to rely on policy makers, with the government and the Reserve Bank working together to get the unemployment rate down to 4% or lower. Authors: Jeff Borland, Professor of Economics, The University of Melbourne

Read more https://theconversation.com/australia-has-record-job-vacancies-but-dont-expect-it-to-lead-to-higher-wages-172146

Your Guide to Finding the Right GP: What Perth City Doctors Offer Today

Choosing a General Practitioner (GP) is one of the most important health decisions you’ll make. Luckily, Perth’s vibrant CBD now hosts a new ge...

Why Every Mining Operation Needs a Robust Safety Management System

Mining is one of the backbones of the Australian economy, particularly in Western Australia. Back in 2019-20, mining contributed 10.4% of Australiaâ...

Australian Classic Literature Enjoys Resurgence

Welcome back to the good old days of storytelling! As the modern world becomes increasingly more demanding, returning to childhood favourites offers...

Building a Governance Model for Headless Content Management at Scale

Image by pch.vector on Freepik There's never been a better time to implement a headless content management system (CMS) to gain the flexibility and ...

Understanding Trade Insurance: Essential Protection for Businesses

Image by Drazen Zigic on Freepik In the current economic environment, trade insurance is an important element for companies trading both locally an...

Choosing the Right Timber for External Cladding

Timber cladding is one of those finishes that pulls double duty: it makes a building look warm and welcoming, and it quietly shields the frame from ...

Top Services Offered by Diesel Mechanics in Brisbane

Keeping a diesel vehicle running at its best takes more than the occasional oil change. When you invest in regular specialist care, you protect the ...

Top 5 Benefits of Hiring Professional House Removalists

Moving day should feel like the start of a new adventure, not the end of your patience. Yet once the settlement papers are signed and the champagne ...

Navigating the Digital Landscape: Managed IT Solutions and IT Services in Townsville

As technology advances at an unprecedented pace, companies must adapt to embrace the transformation ahead. With an evolving technology landscape, mana...

Types of Catering You Should Consider for Your Next Event

Choosing the right type of catering service can elevate your event from ordinary to unforgettable. Whether it’s an elegant wedding, corporate func...

Understanding the Benefits of Split System Installation for Your Home

Climate control is essential to maintaining comfort in your home, especially during the extreme temperatures that many regions face. Whether you’r...

Best Aluminium Window Sliding Designs for Natural Light and Airflow

Bringing natural light and airflow into a space is one of the most efficient ways to create a healthy and comfortable home. In Sydney and across Aus...

Maximising Operational Efficiency: Electric Winch Hire Australia and Hydraulic Power Pack Hire Solutions

Image by jcomp on Freepik From urban construction sites and remote mining operations to coastal maritime facilities, specialised equipment solutio...

Navigating the System: Your Guide to Support Finding Work with a Disability Around Melbourne

Image by freepik Finding the right job can be a challenge for anyone, but it can feel particularly daunting when you're also navigating life with a ...

Say Goodbye to Draughts and Hello to Savings: Your Guide to Perth Window Replacement

Image by prostooleh on Freepik Are your windows looking worse for wear? Are you paying a hefty power bill due to sneaky draughts and poor insulation...

How to Choose the Right Horse Trailer for Your Riding Needs

Many horse owners travel long distances for riding lessons, competitions, or to move horses between properties. Having a safe and reliable trailer i...

Sydney Turf Installer for Instant Green Lawns and Long-Term Performance

Having a green lawn at home makes everything look better. Whether it’s the front yard, backyard, or a small patch beside the driveway, people in S...

Designing Better Living Spaces: Why New Kitchens in the Blue Mountains Are in High Demand

The Blue Mountains region is seeing a steady rise in home upgrades. According to recent housing data, kitchen renovations remain one of the most req...