ABS: “there’s a lot more competition for jobs than there used to be”

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By Leith van Onselen

Who would have thought. When the Government continually floods the labour market with hundreds of thousands of migrant workers, it leads to labour surpluses, greater job competition, and lower wages.

This is exactly the outcome described in today’s Participation, Job Search and Mobility, Australia, February 2018 release from the ABS:

ABS Chief Economist Bruce Hockman said… “We can really see the dynamic nature of the labour market with the estimates from the Participation, Job Search and Mobility survey”.

…the data is useful for understanding what difficulties people face when they are trying to find a job. Mr Hockman said this latest data indicated perceptions around difficulties in securing employment have changed since 2008.

“In February 2018 the share of unemployed who cited ‘too many applicants’ as being the main difficulty in finding work had more than doubled when compared to 2008,” Mr Hockman said. “This suggests people feel there is a lot more competition for jobs than there used to be.”.

The top three reasons people who were unemployed cited in 2018 as being the main difficulty in finding work were:

  • too many applicants for available jobs;
  • no vacancies in line of work; and
  • unsuitable hours.

Elsewhere, the survey also found there were 1.1 million Australian underemployed workers that would like more hours:

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9.0% (1,120,000), were underemployed (Table 1);

  • the median duration of insufficient work for underemployed part-time workers was 43 weeks (Table 5).
  • 46.0% of part-time underemployed workers reported having a period of insufficient work of a year or more (Table 5).
  • 17.9% of part-time underemployed workers stated they would move interstate and 21.9% said they would move intrastate if a suitable job was offered (Table 6).
  • 49.5% of part-time underemployed workers did not look for work or more hours in the 12 months to February 2018 (Table 7).

There are also 1.1 million people with “marginal attachment to the workforce” that are not captured by the official participation rate, but want more work:

Of those classified as not in the labour force at February 2018:

  • 16.2% (1,080,000), were classified as marginally attached to the labour force (Table 1);
    • 51% of those who were marginally attached to the labour force were aged between 15 to 34 years (Table 8).
    • 28% of those who were marginally attached had a job within the last 12 months (Table 9).
    • 9.6% of those who were marginally attached to the labour force were classified as discouraged job seekers (Table 1).
    • 49.7% of discouraged job seekers were aged 55 and over (Table 8)…
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Clearly, Australia’s labour market remains weak, with oodles of excess capacity. Given the strong correlation between wages growth and underemployment, it also means wages are likely to remain in the gutter:

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.