Yahoo Finance 'Deep crisis': More than 1 million Aussies out of work
Around 15,700 more Australians found themselves out of work in July, with coronavirus restrictions pushing the unemployment rate up to 7.5 per cent, the latest Australian Bureau of Statistics labour force data has revealed.
While it’s a modest rise from 7.4 per cent the previous month, it is still a 22-year-high, with more than 1 million Australians out of work since April.
Head of labour statistics at the ABS, Bjorn Jarvis, said the July figures indicated that employment had recovered by 343,000 people and hours worked had also recovered 5.5 per cent since May.
"The number of unemployed people rose by nearly 16,000 between June and July. For the first time there were more than one million people out of work, available to work and actively looking for work,” he said.
“Employment remained over half a million people lower than seen in March, while hours worked remained 5.5 per cent lower.”
Hours worked increased 1.3 per cent in July, and increased more for females (2.3 per cent) than males (0.6 per cent).
The underemployment rate decreased by 0.5 percentage points to 11.2 per cent, but is still 2.4 percentage points above its March rate.
The higher unemployment rate follows news that Australian wages grew at their slowest pace on record during the second quarter, as household spending, consumer confidence and business conditions plummeted.
The official wage price index rose just 0.2 per cent in the three months to the end of June, according to ABS data, from 0.5 per cent in the first quarter. Annual wage growth slowed to 1.8 per cent.
But while this is the official unemployment rate, which reflects Australians out of the workforce and looking for work, the effective unemployment rate, which reflects Australians working zero hours or who have left the workforce entirely, is much higher.
That figure is likely at 11.3 per cent already, and will continue to rise throughout the course of the year, according to the Federal Treasurer.
The Australian Council of Trade Unions (ACTU) has called for decisive action to create jobs, saying the new figure shows Australia’s economy is in a “deep crisis”.
“Even with a national wage subsidy scheme which unions fought for, more than a million people are now looking for work,” ACTU president Michele O’Neil said.
“These figures show that Australia is on track – as predicted by the Government’s own department – to reach 10 per cent by the end of the year.”
O’Neil said the rate reflects Australia prior to Victoria’s second lockdown, which saw hundreds of thousands of workers stood down.
“We know that the real rate of unemployment is much higher, there are millions of workers who are currently only in a job thanks to JobKeeper and others who have stopped looking for work,” she said.
“We cannot return to the levels of insecure work that we saw before the pandemic which have led to so many people losing their jobs.”
640,000 more could lose their jobs
The modest rise may not be indicative that Australia’s economy is recovering, however.
New data from McKinsey & Co has found that, should international borders remain closed, around 640,000 more Australians could lose their jobs between June this year and March 2021.
But not all industries will be hit equally: tourism and the arts will be hardest hit, while construction and technical services might start to recover once the immediate effects of the lockdown start to fade.
Some industries, like retail, will be changed forever.
“As sales shift online, the employment profile of Australia’s retail industry is expected to change permanently, as fewer customer assistants will be required to deliver each dollar of revenue,” the report found.
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