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Vacant claimants

By John Haly  

Predictably the crises of climate change and the pandemic highlighted deficits in health services, markets, welfare and education. Both have accelerated a predictable economic recession. 

To understand the early signs of an economic downturn, we need to go back to when politically acknowledged signs of a faltering economy appeared. The GDP downturn in the third quarter of 2016 was preceded by nearly three years of a per-capita recession.

The retail boom of the last quarter (Christmas) saved us from an official recession. However, by the end of 2018, Australia re-entered a per-capita recession“Australia’s economic output shrank 0.2pc per person in the fourth quarter of 2018, after a 0.1pc decline in the third”. 

By mid-2019, economists predicted a recession as employment growth was slow, unemployment high, and wages were stagnating. Then, by the end of 2019, as Australia was literally burning down due to climate change, a global pandemic hit, and the pack of cards came tumbling down, and the recession we were always going to have, hit us.

 

Fig: 1 – Australian GDP Per-Capita for last decade.

 

Our strollout

The political response to the health crisislockdownsquarantine handlingwelfare supportvaccine strollouts has been underwhelming. Yet despite Government mismanagement, we moved from the least vaccinated nation in the OECD to a position by early November 2021 with 80% vaccination rates. Although we still had thousands of active cases, hundreds of newly acquired cases and hundreds in hospital. It isn’t over, but considering the state of other Western countries, we could be worse off.

The Federal Government celebrated some States opening up and criticising those that did not. Our Treasurer, Josh Frydenberg, had been spruiking our “recovered” unemployment numbers as the ABS claimed we had unemployment around five per cent. However, despite apparently rising job vacancies and falling unemployment (relative to 2020), business sector elements have complained that they can not find staff to fill jobs on offer.

Zero-hours

So let’s explore the nuances of these circumstances where businesses claim they cannot fill vacancies despite insufficient jobs in the economy and millions without adequate levels of work. That assertion in itself is a reasonably broad claim, so let’s establish its bonafide. First, the ABS has stated that unemployment is low, although it has recently risen to 5.2% in October from 4.63%. This is only because the methodology for the measurement ignores several factors I have discussed previously, including and certainly significantly the thousands of people who have “worked zero-hours” in any given month of 2020/21.

If you define employment as widely as the ABS does and unemployment a narrowly as it does, then the dictionary meaning of employment is lost in the equation. 

From Wikipedia: “Employment is the relationship between two parties, usually based on a contract where work is paid for, where one party, which may be a corporationfor-profitnot-for-profit organisationco-operative or other entity is the employer, and the other is the employee.” So if you’re not paid, and you do no work then by any definition (except that of the ABS) you are not “employed”. The ABS stats do not reflect Australian domestic unemployment (Figure:2 below).

Every other measure out-strips ABS

Jobseeker payments shown in the graph vastly outstripped the numbers classified by ABS as unemployed. It makes a farce out of the misuse of ABS’s statistics as a valid measure of internal unemployment. As previously explained, Roy Morgan’s more accurate assessment becomes more evident when ABS plus zero-hours numbers – has of late – been larger than even jobseeker and youth allowance combined.

 

Fig: 2 – Variant unemployment measures for 2020-2021

 

Vacancies and job guarantees

The question is now, what do poor Job Vacancy measures indicate? There aren’t enough vacancies to cater to the overwhelming majority of unemployed by any measure. This has been the case for decades and is the failure of conservative governments and the private sector. The Government could easily provide a Federal Job Guarantee but is ideologically opposed. Similar opposition was prevalent when Prime Minister John Curtin, postwar, established a not dissimilar mechanism resulting in unemployment remaining beneath 3% in the 1950s and 1960s. Instead, successive governments have diminished the public service by privatisation, undermined manufacturing and deter investment in renewables. Ross Garnaut, who produced two Climate Change Reviews for the Australian government, wrote the book “SuperPower”. In it, he notes we have squandered an enormous economic advantage. Worth reading unless you are susceptible to depression at discovering how the fog of Australian politics” has obscured tremendous economic and employment potential for our country.  

Separation of vacancies

This aside, there are two recently diverging measures for job vacancies. The Department of Employment generates the IVI stats for internet job advertisements. ABS does a quarterly vacancy survey amongst businesses. When I first began writing about the anomalies of unemployment stats, the variation between these two figures was negligible enough to be ignored. For example, in 2016, I wrote“The ABC reported in January that “…newspaper ads rose 0.4 per cent last month, but now make up less than 5 per cent of employment advertising…”.” So I focused on IVI statistics because newspaper advertising, shop windows ads, and private networking recommendations for applicants appeared to be statistically irrelevant.

Increasingly in the internet age, jobs recruitment can occur on various sites: Seek, CareerOne, Australian JobSearch, LinkedIn, Facebook, and Twitter. The problem is that there is no government break-up in the last three like the IVI does for the first three. (Figure:3). However, private recruitment agents, “shop window” ads, or boutique specialist websites are applicable for the local low-skilled workforce expected to find work in rural areas for labour, like fruit picking.  

 

Fig: 3 – Variant Job Vacancy figures 2019-2021

 

The ABS survey reported smaller numbers than the IVI statistics over a decade ago. That period aside, there was no significant divergence between ABS and IVI until the last four years. You can see the change in Figure 4. While we can’t blame pandemics, it is worth referencing the coincidental timing of the economic falterings discussed initially. 

 

Fig: 4 – Roy Morgan employment stats and both Job vacancy measures.

 

Businesses shifted from under-reporting vacancies over a decade ago to reporting more vacancies than were reported as advertised. This is partly due to recruitment alternatives arising in LinkedIn, Facebook, Twitter, Instagram and Youtube that are not included. The most recognised recruitment platform, LinkedIn, is becoming drastically less popular because of stats on how many LinkedIn profiles are exaggerated and out of date. Despite Linkedin’s internal exaggerations, according to Jobvite surveys, the number of recruiters using LinkedIn has dropped from 92% in 2017 to 77% in 2018 to 72% in 2020 to 65% in 2021.

Pre-pandemic economic faltering in Australia meant companies relied on natural attrition or dismissal to shed employees they didn’t replace, sometimes even modifying the job description to force people out. They overworked the ones they employed, but didn’t want to finance their overtime. This became evident as companies were increasingly being outed for wage theft for unpaid overtime. Corporates lobbied to have conservative governments undercut penalty rates on the spurious claims to pay for more employees. Basic maths reveals this was not applicable for anything but a small number of large companies with significant numbers of employees. (Figure:5) Such companies shed employees when penalty rates dropped, and nobody got more work. So jobs continue to be shed.

 

Fig: 5 – Employment capacity required to benefit from penalty rate changes.

 

Businesses reported more contingent vacancies than they appeared to advertise, and then the recession hit. Demand bottomed for all but the largest enterprises, people stayed in lockdowns, the economy recessed, and unemployment rose to nearly a quarter of the workforce. Finally, however, its slowly returning status of between 1 to 1.5 million unemployed of 2019 has emerged. From mid-2021 onwards, unemployment settled between 1.2 and 1.5 million. (Figure:6)

There has undoubtedly been higher average unemployment for 2021, but for the last six months, it hasn’t exceeded the boundaries of 2019. So there are – to be fair to the conservative political commentary – grounds for saying employment has recovered to the range of pre-pandemic levels. Just don’t look at the figures (Figure:6) or the relative range too closely.

So now, business is over-reporting vacancies to the ABS that they do not advertise or intend to fill without a demand surge. Yet even advertised vacancies have gone up. (Figure:3/7). So why might specific labour markets be advertising more? Does it represent an increase in new jobs, or does loss of employment markets contribute?

 

Fig: 6 – Under and Unemployment and variant job vacancy stats.

 

Considerations

Due to international border closures, consider the loss of migrants, pacific Islanders and backpackers coming to Australia – on visa conditions that require rural employment. Consider the access to work of migrants who, out of economic necessity, live in crowded low socioeconomic LGAs with higher exposure to the Covid-19 virus to jobs in external LGAs that had travel restrictions. Third, consider how travel restrictions and lockdowns restricted high-end recruitment that previously used in-person networking meetups or travelling to interview overseas. Fourth, consider that net migration away from cities has accelerated during the recession and remote work opportunities, which has fuelled the rise of alternatives in smaller towns with lower living costs. Finally, consider that the absence of visa workers revealed an entrenched culture of exploitation and inadequate financial compensation in the farming and service industries. 

The results of these considerations are two-fold.

  1. This has generated much of the employer claims that they are struggling to find suitable staff to fill job vacancies”.
  2. The realisation that low wages you can get away with for migrants, poor conditions, and exploitation will not be acceptable jobs for Australians. Farmers and Restaurants are now forced to engage with better educated Australians who expect better pay and are more aware of their rights as employees. So it is no surprise they have been less successful in filling jobs.

As localised markets for exploitable employees have dried up, businesses have had to advertise outside their LGAs. Figure 7 shows that according to the Department of Employment, rises in advertisements for labour with the only significant dips in recruitment across all industries were during the Covid-19 Delta outbreak. However, this does not necessarily translate as a rise in real jobs. Instead, some portion likely reflects the need to expand advertising into previously unutilised media, with further reach than LinkedIn, Facebook, Twitter, Instagram and YouTube.

 

Fig: 7 – 2021 Lead up to October’s advertised job vacancy by role classification.

 

Recruitment for hospitality, manufacturing, warehouses, leisure sectors and farming industries relied on a willing pool of locally exploitable, low-skilled, migrant labour on tap. This has vanished for all the aforementioned reasons. Moreover, constrained reach advertising via social media might have limited scope to attract Australians. Many don’t want to work for the exploitative conditions or the low wages on offer.  

Lazy Aussies

The political and MSM dialogue to cover the exploitation hasn’t changed in years. “Lazy Aussies just don’t want to work” was an excuse to hire cheaper, exploitable 457 visa migrants when Abbott was PM. Under Morrison, “Laziness” and “JobSeeker is too generous” are the absurdities brought to bear. These diatribes never address the wage rates or the conditions, and employers will lie about them, while politicians facilitate labour exploitationCorporate Australia seeks to frame this as a “labour shortage”.

In contrast, the ACTU and other Unions call it a living-wage shortage, a hazard pay shortage, a childcare shortage, or a shortage of non-discriminatory, non-toxic management. So instead of being responsive to the needs of Australians in a time of crisis and expanding public sector employment, welfare or active labour market policies, the government are facilitating a gig economy. One complete with exploitation and underpayment and ensuring labour mobility and wage growth are at an all-time low 

Money for mates

In the face of a recession, the recent history of record-breaking under and unemployment levels, stagnating wages, a surge in the part-time and gig economy, the Liberal Party’s solution is support for bringing up to 160,000 foreign workers and students a year into Australia”. So how do they facilitate this amid a global pandemic? Via a private quarantine scheme recommended by DPG Advisory Solutionslinked to former deputy NSW Liberal Party director Scott Briggs”. The scheme “was awarded a $79,500 “limited tender” contract by the Home Affairs department to provide “consultancy services. Also, the founder and director of DPG is David Gazard. A close associate of Scott Morrison and former ministerial adviser. The Department of Home Affairs chose these private quarantine reviewers without government tender.

This is the quality of solution for a federal government that had till now avoided building quarantine facilities, as “carefully vetted” consultants are brought into resolving the issue of businesses – who, despite massive unemployment numbers – are “struggling to find exploitable employees”. This deliberately cast illusion of economic prosperity hides the poverty suffered by millions in Australia and is challenging to maintain with the recent GDP drop – the largest on record. It leaves real solutions of federal job guaranteesactive labour market policies, and adequate welfare support in the dust. Is this the land of the “fair go” we want Australia to be, or is that just a myth we abandoned generations ago, if indeed such an ethos ever existed?

 

This article was originally published on Australia Awaken – Ignite your Torches.

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12 comments

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  1. Stephengb

    Good article Mr Haly.

    The fact is that, in 1978, Australia was indeed the “fair go” (egalitarian) country (well almost).

    The turning point was when Hawke agreed to allow private health care to be integrated with public health care (Medicare), then introducing the Accord (a means for business to change work conditions to a gig economy).
    Meanwhile Keating started the road to rampant privatisation of government monopolies like QANTAS, and The Commonwealth Bank of Australia. This was all called Economic Rationalisation (AKA the Neoliberal Ideological Agenda).

    By 1996 the Neoliberal Agenda was in full swing, Howard took over from Hawke and Keating and continued the pace of privatisation plus deregulation and austerity for all (except of course the top echelon).

    Now we are now well into the Neoliberal era, closer to an Oligarchy than democracy and rapidly heading for a new-feudalism.

  2. Phil Pryor

    My wife has recently lunched with old friends, simple hearts, who eventually gossiped beyond sex failures and setbacks, to spruik up Alan Jucking -Fones (non expert poofter parrot) as a source of climate change attitude. They were pro savagery, pro dark ages ignorance, and unable to comprehend science, statistics, UNO research, universal weight of opinion based on Factual Sources…,simple standards of thought management indicate that if the pope says something, anything, then dirty priests who suck cocks or violate little abused anuses do not seem to exist, because the pope oversees all this. And so, Alan Jones, a fckwit of perverted outlook and known lover of rugger dates, is an expert, by a miracle, of universal knowledge. Re-Effing-Diculous…Population, pollution, predatory perversions, primitive ignorance, pathetic loudmouthed savagery, utter arrogant denialism, stupid sensationalism, perverted political profiteering pillaging, predatory media maggoty misfit madmouthing, donor driven dirty deviation, total selfserving egocentred criminal negativity exists, and we all do nothing much.., I hate these conservative conniving crooked crony criminalities, our ENEMIES. Statistics gathered and assessed by experts suggest we are now doomed by the profiteering perverts who LIE.

  3. Terence Mills

    As you say, the most recent ABS figures give us an unemployment rate of 5.2% and it is noteworthy that our Treasurer is expecting, perhaps I should say demanding, an unemployment rate with a four in front of it leading into the election. I don’t believe that this data is relevant any longer if it ever was.

    In my own regional area there are seemingly no full-time jobs on offer and apprentices are not being taken on. When I looked into this more closely I was told by a senior semi-retired electrician that all of the young guys are going to the mines (I live in North Queensland) frequently as FIFO employees.

    We do have vacancies for fruit pickers, particularly mangoes and bananas – the latter always being a problem for workers because of the heavy lifting involved.

    There are quite a lot of Pacific Island agricultural workers hitching lifts on the highway many from Vanuatu I have spoken to. I understand that in a number of cases they have broken their bond [it seems they come here as bonded labour just like the good old days !] to their sponsoring employer and are going freelance, moving from farm to farm and sometimes sleeping rough and buying a cooked chook at Woolies : that’s where I met them. By doing so they avoid having to pay their employer for transport, accommodation etc.

    If in the cities you are short of a barista or a pastry chef don’t think that we need to import this labour, what we need to do is crank up the TAFE system which has bee effectively gutted over recent years – note Labor’s policy on TAFE and University places.

    The government are telling us we need to bring in some 200,000 migrants but is anybody alert to what is happening in the area of housing availability and affordability right across the country ? It is dire !

  4. wam

    Wow a beaut summary of how academic reality can be made good propagamda by making a us imagine what the government announces is what we imagine. so the stats about employments are not about what we think of employment so the negative sounds positive and vice versa. Loved the little truths about hawke and keating ps Phil your story is the answer to this village idiot’s plea for understanding from kaye and the crow. These women friends may be too dumb for climate but smart enough to remember the smogs in films and to understand greenhouse gases cause a greenhouse effect. The stark evidence of the arctic ice, with starving polar bears and permafrost melting, seas rising with islands disappearing should convince them that man is involved with making us the nest venus. pps notice fruedbergs is emphasising labor is not in control the greens were in control 2010 and have a reduction target dahdedah. The slogan: labor and the greens is being fired up and the blackmailing bandit is primed to drag albo down.

  5. Michael Taylor

    I never really trusted the ABS figures on unemployment as they were always manipulated by the government to paint a rosier picture than the real one.

    The manipulation was easily done by changing what we called “the business rules”. For example, Howard changed the rules on what classified a person as employed, reducing the number of hours of work a week from ten down to two. “Bingo! Look at us! More people have found work under our government!”

    The other sly trick that Howard changed had the same; “Bingo! Look at us! We’re an awesome government” result. He changed the business rules for people on Newstart. Prior to his change, the number of people on Newstart totalled all recipients, including those who had their payments temporarily suspended (for whatever reason). He had the suspended recipients removed from the Newstart population, giving the ABS a false set of numbers.

    One of our Ministers was less discreet. He actually lied about the number of people on the DSP, which of course was a figure far less than the actual one. Unimpressed, our department heads had a quiet word in his ear.

  6. New England Cocky

    Thank you for a readable article o economics that actually makes sense.

  7. Stella

    Denis, thanks for a well-researched article about unemployment figures and the labour market.

  8. John Haly

    Hi folks, response time from your author.
    Stephengb: Kind opening appreciated, and yes, I have written about the Neo-liberal emergence and Keatings part in that in a couple of articles here in AIMN. There is even an embedded link in the article above to one of them. (https://theaimn.com/turnbulls-reinvention-457-visa-scheme-little-aid-australia/). I’d go a little further back to the Whitlam era before anyone caught a glimpse of a “fair go”. But perhaps that is just my memory of such a time.

    Phil: I am not sure what to say to you. I think you are a little too angry and perhaps go rest or choose better drugs.

    Terence: The data does have relevance as a tool for international comparison (as I have argued in previous articles, which are embedded above). It just has no place as a measure for domestic unemployment! And Fruit pickers and the like I dealt with back in September (also embedded above). It is just exploitation, and that is it pure and simple. The big Retailers have a significant piece to play in that equation, given their pre-existing exploitation of Farmers. It is a vicious cycle we need to break.

    wam: This is the role of propaganda, to confuse, divide and convince the working class that the ruling class’s objectives are theirs. It is about ensuring the facts don’t get in the way of their story and that what we can see and feel by way of climate, poverty and social disintegration isn’t so. The tragically overused rhetoric is, “It’s all Labors fault unless you are talking about bushfires, it’s the Greens’ fault”.

    Micheal: The ABS did make significant changes in measuring unemployment around 2010, which they admit to and has resulted in substantial differences between Roy Morgan and ABS measures ever since. What it was is an article for another time.

    New England Cocky: A pleasure! As I become more and more familiar with this specific area of economics in Australia, I do worry that I will talk over the top of most heads. However, I am reassured to know you don’t think so.

    Stella: Not sure who Denis is, but I will assume the compliment was either for the person who directed you to this article or me.

  9. Michael Taylor

    Hi, John.

    Howard et al were sneaky bastards. Whilst the classification for being employed (from ten hours work a week down to two hours) was public knowledge, the decision to not include suspended Newstart recipients in the total Newstart population was hush hush.

    And they were kept hush hush (embargoed) until the Minister signed off on them.

    I was perhaps being a little unkind to the ABS when I said I didn’t trust their figures, because after the election of Rudd things were more in the open.

    But the LNP are again in government. I wonder what other sneaky tricks they’ve been up to.

    Perhaps it shouldn’t be the ABS I have no trust in, but the government who provides them with the data.

  10. Phil Pryor

    John Haly, ignore my quick hot scribbles, done for effect. Most do so. I will attack brainless greedy conservatism in the vague hope of improvement. Now, tonight, another glass of some better drug…I enjoyed your professionalism and wide cover within the article.

  11. Max Gross

    “Brutus is an honourable man”

  12. leefe

    “So are they all,
    All honourable men.”

    I’ve always imagined that penultimate word being said with a sneer.

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