Unemployment rises as thousands give up looking for work during closures

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Another 138,000 jobs were lost last month as Australia’s two most populous states struggled with prolonged shutdowns.

The national unemployment rate climbed to 4.6 percent from 4.5 percent, with another dramatic deterioration in the participation rate, the main reason why unemployment has not increased further.

The participation rate hit its lowest level in 15 months, with just 64.5% of people aged 15 and over currently working or actively seeking work.

The New South Wales and Victoria labor markets – with a combined share of almost 60 percent of the Australian workforce – had a huge influence on the national figures.

Last month there were sharp declines in employment in Victoria (123,000 people) and New South Wales (25,000 people, after a significant drop of 173,000 in August).

National figures were partly offset by an increase of 31,000 in Queensland, where conditions recovered after the short lockdown in early August.

But the extent of the economic damage caused by NSW which failed to contain its COVID-19 outbreak in June has become even clearer.

In the past three months, labor force participation has fallen by 333,000 people, and employment has fallen by 281,000 people.

There are now 111,000 fewer people employed than before the first COVID closures in March 2020.

“Extended shutdowns in New South Wales, Victoria and the Australian Capital Territory have seen employment and hours worked fall below pre-pandemic levels,” said Bjorn Jarvis, head of labor statistics at the Bureau of Statistics.

The labor market will not recover until 2022

Economists warn that it will take months for jobs to recover.

“We are unlikely to see any significant improvement in data before the November print (released mid-December), with NSW set to lead ACT and Victoria,” said Sarah Hunter, chief economist at BIS Oxford Economics. .

“And, despite the potential for a robust economic recovery, it is likely that it will be well into 2022 before the labor market fully recovers.”

They say the closures have suppressed demand for labor, so NSW’s decision to reopen earlier this week should see demand pick up from here, followed by Victoria later this month.

EY chief economist Jo Masters said we could slowly begin to move towards a situation where labor market shortages become a bigger problem than job losses.

“The worst pain in the job market is behind us,” Ms. Masters said.

“We expect the economic narrative to turn from underwork to underfunding – indeed, Westpac unemployment expectations have fallen to a 6-month low nationwide and to a 16-year low in New South Wales, reinforcing anecdotes of a tight labor market. “

Women bear the burden of job losses

When the labor market recovers, much of the recovery will need to be seen in female employment.

Between June and September – the period covering the recent shutdowns – the majority of job losses were borne by women.

About 281,200 jobs were lost, but 60 percent were held by women.

Men lost 112,200 jobs, but women lost 169,000 jobs.

Most of the job losses occurred in part-time jobs, which were mostly held by women.

Full-time jobs fell by 46,400, but part-time jobs fell by 234,800 (of which 168,800 were held by women).

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Westpac economist Justin Smirk said part-time workers were typically the hardest hit by recessionary conditions.

“It is not surprising that the greatest pain was felt by part-time workers during the last round of closures, as they are often the first to be made redundant and represent a higher share of the workforce. works for the hardest hit sectors, ”he said.

Alison Pennington, senior economist at the Center for Future Work, says women have withdrawn from the workforce in greater numbers than men due to the need to care for children during closures.

“While health restrictions were introduced, schools closed, daycares [have] firm, [and] there has been an explosion in unpaid care work, which weighs disproportionately on the shoulders of women, ”she said.

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Economist Says Unemployment Figures Believe True Impact of COVID Restrictions


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