About 950,000 jobs were lost in the seven weeks to 2 May, according to payroll data from the Australian Taxation Office (ATO) and the Australian Bureau of Statistics (ABS).
The Boston Consulting Group (BCG) has forecast that about 570,000 people who lost their jobs due to the coronavirus pandemic could be back in the workforce by the end of 2020. Brad Noakes, a partner at BCG, says that about 50% of the working population are in sectors that will experience a V-shaped recovery, whereas 32% are in sectors that are facing a U-shaped recovery:
“Overall, we estimate that 50 per cent of the working population are employed in sectors that will experience a V-shaped recovery or a fairly quick return,” BCG partner Brad Noakes said…
“Around 32 per cent of the working population are employed in sectors that will experience a U-shaped recovery or a slow return and some permanent loss”…
“While around 18 per cent of the working population are employed in sectors that will experience a deeper U-shaped recovery or an L-shaped recovery, which would see deep structural damage,” Mr Noakes said.
If correct, this would imply a real ABS unemployment rate of 8%, assuming the participation rate is the same as it was in March 2020 and no statistical trickery via JobKeeper.
That would still be a disastrous situation for the Australian economy.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
