Australia faces a slow, part-time jobs recovery

The Guardian’s Greg Jericho has produced some nice charts showing the V-shaped recovery that has taken place for part-time workers (outside of Victoria), while full-time jobs have failed to launch:

Hours worked per capita is one of the best ways to measure the health of the labour force. It also is good for measuring just how much of our adult population is spending its time working.

And while suggesting that we have roughly recovered 75% of the lost hours sounds good, we need to look at it in the longer context.

The problem is the hours worked number was falling before the virus hit.

One piece of data that has been missed is that, excluding Victoria, more people in Australia worked part-time in September than had ever done before.

In September there were just over 3 million people outside Victoria working part-time – some 34,200 more compared with the 2.98m in March.

That is a snapback!

The pity though is that in September, when we exclude Victoria, there were 240,000 fewer people working full-time than there were in March:

…That is why, even with a relatively decent return in hours worked per capita, the level of adults working full-time remains lower than ever recorded:

It’s true that the casualisation of Australia’s workforce has occurred over a period of decades, not months:

Sadly, the 2020 Federal Budget guarantees further growth in part-time jobs at the expense of full-time.

The Budget did precious little to boost the demand for labour, instead relying on trickle-down economics and supply-side subsidies.

Importantly, the the Morrison Government’s JobMaker wage subsidy incentivises employers to substitute a pre-existing employee for a young, part-time subsidised worker.

The reason why unemployment is so high is because there is a major deficit in demand across the Australian economy. The solution, therefore, is not wage subsidies aimed at hiding the true rate of unemployment and shifting Aussies into part-time work, but budget stimulus aimed squarely at boosting demand.

This requires permanently lifting Australia’s unemployment benefit (JobSeeker) from its poverty level of $40 a day, alongside massive investment in Keynesian-style public works projects like public housing and infrastructure.

With borrowing rates hovering at the lowest level in history, the Morrison Government has no excuse.

Spend up big on demand-side stimulus until unemployment falls to around 5% and wages start to grow.

Otherwise, the best the Australian economy can hope for is a slow, low-wage, part-time recovery.