Lockdown job ‘hibernation’

AUSTRALIA’S unemployment rate fell again last month, reflecting a plunge in the participation rate, largely due to long lockdowns, rather than a strengthening labour force.

The jobless rate slid to 4.5 per cent in August, down from 4.6 per cent for the previous month, while the participation rate weakened by 0.8 percentage points to 65.2 per cent.

It follows a 0.2-percentagepoint fall in the participation rate in July and shows many Australians are dropping out of the jobs market.

CommSec chief economist Craig James said those who weren’t actively looking for work, but technically classed as neither employed nor unemployed, “were effectively in hibernation”.

For those who had work, hours decreased by 3.7 per cent in August, considerably more than the 1.1 per cent fall in employment.

This highlighted the extent to which people who endured lockdowns had reduced hours or no work without necessarily losing their jobs, the Australian Bureau of Statistics said on Thursday.

ABS head of labour statistics Bjorn Jarvis said the relatively large fall in unemployment accounted for about 13 per cent of the 168,000-person fall in the total labour force.

“Beyond people losing their jobs, we have seen unemployed people drop out of the labour force, given how difficult it is to actively look for work and be available for work during lockdowns,” Mr Jarvis said.

Hours worked in Victoria were down 3.4 per cent in August.

“Compared with August 2019, there were an extra 1.2 million employed people who worked reduced hours for economic and other reasons in August 2021, including 532,000 who worked no hours for those reasons,” Mr Jarvis said.

Mr James said government assistance payments had been important in helping people cope with the dislocation and hold on to their jobs.

Job ads and consumer confidence were holding up a lot better than during lockdowns in the first half of 2020, he said.

“That’s because the focus is on the new endgame being the vaccination route to ‘freedom’,” Mr James said.

ABS figures also showed international border closures had resulted in Australia’s population growth slowing to a near standstill in the year to March.

The population grew by just over 0.1 per cent or 35,700 people to 25.7 million, in contrast to a 1.5 per cent growth in the 2019 calendar year.

Population growth over the past 12 months was entirely due to 131,000 births, while net overseas migration fell by 95,300 – for the first time since 1946.