Thursday 14 September 2017 by Opinion

Labour Force Data – August 2017, Australian Bureau of Statistics

Regardless of the bigger picture, today’s labour force data shows that Australia created a large number of jobs in August. Jobs were largely full time and a lot more people joined the labour force meaning that the unemployment rate stayed constant. However, hours worked per employee continues to fall and the underutilisation rate is still high at 14.1%. As such, wage growth (and therefore inflation) will remain weak.

Data for August includes some more encouraging signs for the Australian economy, but there is still an underlying trend of declining hours. This is at odds with the headlines informing  40,100 new full time jobs created in August, but consistent with the underemployment rate still remaining above 14%, which is well above the 12% benchmark for a healthy Australian economy.

Drilling down on the employment data, there is a clear trend over the past few years in particular, and it is not good news for the boys.  Figure 1 uses a different scale for men and women to account for females, and their larger part-time segment.  Females’ hours per week have remained steady over the past 20 years at around 26hrs per week.  Males’ hours per week have been more volatile but stayed around 35.75hrs per week until the GFC, propped up for a short while for the mining investment boom, but now is clearly sliding.  

Arguably, women’s average hours remain steady as more women are shifting from part time to full time, but these long term social trends don’t explain the gap between male and female hours worked that has opened up in the past eight years or so.  

Clearly we can’t be seeing such strong full time jobs growth and declining/flat hours per week. Time will tell whether it is the hours per week that the ABS has got wrong or the number of jobs.  Hopefully the recent business investment pickup is translating to jobs and the hours will follow, but the trend line over the past decade would suggest there is something more structural at play such as the digitalisation of jobs, casualisation of manufacturing and construction roles, or some other fundamental changes that will keep hours and therefore incomes down for some time to come.  

Average hours per week – Males vs Females

Source: Australian Bureau of Statistics, published on 14 September 2017
Figure 1