Alex Joiner, chief economist at IFM Investors, posted the below chart last week, showing that “the healthcare sector has added more than 100,000 more employed than all other sectors combined since Q4 ’22 – with education accounting another 100,000”:
The healthcare and education sectors combined now account for one in five job vacancies, according to Joiner:
Justin Fabo at Antipodean Macro then posted the following chart showing the massive rise in the employment of personal carers, reflecting “very strong growth in aged care and NDIS spending”:
The above chart from Fabo segways nicely into the following chart from Alex Joiner, showing that ‘government-aligned’ (non-market) industries have been a driving force behind Australia’s employment growth:
Without spending on the NDIS and aged care, Australia’s unemployment rate would have risen sharply, given the 0.3% increase in market industry jobs, which is well below the 2.9% increase in the civilian working-age population (driven by historically high net overseas migration):
The strong growth in the care sector is ominous for Australia’s future productivity growth, given that government-aligned jobs have historically experienced far slower productivity than the market sector:
Not only is the ballooning cost of the NDIS swallowing the federal budget, but it is also crowding out the productive capacity of the Australian economy.
