Of 3’s, and Other Important Labour Market Numbers

by Jim Stanford, Economist and Director

Prime Minister Scott Morrison set tongues wagging this week with a confident pledge that Australia’s unemployment rate could have “a 3 in front of it” this year. It’s a theme that will loom large in his campaign for reelection later this year.

Counting the Unemployed

To be officially counted within the ABS’s measure of unemployment, a person has to pass several tests:

Post-COVID Recovery and Job Quality

The long-term rise of underemployment in Australia’s economy is closely correlated with the expansion of non-standard or insecure work in various forms: including part-time work, casual jobs, labour hire and contractors, and more recently gig workers. Few full-time workers report they want more work; most underemployed are those in part-time and casual roles, whose schedules (typically irregular) do not provide them with adequate income.

Unemployment and Wages

There’s another important labour market number that should have a 3 in front it — or even a 4. And that is the annual rate of nominal wage growth. For almost a decade now, Australia’s wage growth has stagnated far below normal benchmarks. Annual wage growth since 2013 has averaged barely 2% per year — barely half the traditional pace. Real wages have hardly grown at all during this time, despite rising labour productivity and strong business profits.

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Centre for Future Work

Centre for Future Work

CFW, housed within the Australia Institute, conducts and publishes progressive economic research on work, employment, and labour markets. https://www.futurework