Every wondered why the ABS unemployment figures are so convoluted? Read on. Experts reckon unemployment will rise to ten per cent by mid-June. It’s also the reason Republic Resume has been flat out. This story is from Ross Gittens at the SMH.
In evidence to a Senate Committee, figures show that 900,000 people lost their jobs during the period (although 300,000 gained jobs), 1 million people worked fewer hours and three-quarters of a million kept their jobs but worked no hours (most protected by JobKeeper)
So that’s a total of 2.7 million workers – about one worker in five – adversely affected by the snap recession.
Total employment fell by 4.6 per cent, but total hours fell by twice that – 9.2 per cent, telling us much of the pain was borne by part-time workers and especially women.
The rate of under-employment (mainly part-timers working fewer hours than they want to) leapt by almost 5 percentage points to 13.7 per cent.
The trick, however, is that though the underlying position won’t be getting much worse, we’ll see the rate of unemployment shooting up. It had risen by “only” 1 percentage point to 6.2 per cent by mid-April, but experts expect it to be closer to 10 per cent by mid-June.
In an ordinary recession, almost all the people who lost their jobs in April would have immediately started looking for a new one, and so met the bureau’s tight definition of being unemployed.
This time, most people didn’t start looking because many potential employers had been ordered to cease trading and, in any case, you and I had been ordered to stay in our homes and rarely come out.
As the lockdown is eased, however, people will start actively looking for work, and the bureau will change their status from “not in the labour force” to unemployed, making the figures look a lot worse.
If you rule out V-shaped and L-shaped recoveries, what’s left is a U-shape. You go down fast, but bounce along the bottom before going back up. But our success in suppressing the virus means we’ve been able to start dismantling the lockdown earlier than the six months initially expected.
Looking at the prospects for the global economy, it’s bad. But there is some hope. Our major trading partners – China, South Korea and Japan – are among the countries that have done better at beating the virus and getting back to work.