The latest slowdown of Covid-19 job losses has been touted as good news. Is it though?
The latest weekly job figures highlight just how damaging the coronavirus has been to tourism regions and also how even in the face of supposedly better news the situation remains dire.
In these bizarre times, it is weird what can be seen as “good”, as the news came with a media release stating “slowdown in COVID-19 job losses”. And while this might seem good, upon closer inspection I feel a desire to insert the “is it though?” meme.
In the first week of May the Australian Bureau of Statistics estimates that jobs fell by 1.1%. And sure, that is nowhere near the massive 3.7% drop that occurred in the first week in April. But it is still the biggest drop since then and is equivalent to some 120,000 people losing their jobs in just one week:
The slowing, such as it is, is also due mostly to a pick-up in jobs for those under 20. Every other age group – whether male or female – saw a greater loss of jobs in the first week of May than in the last week of April.
So, yes, it is good that we are not losing jobs at the same speed we did when the shutdowns occurred (not sur
prising really) but, given that 2% of people in their 30s lost a job in the first week of May – only slightly down on the worst weekly fall of 2.85% – it might be a bit early to start relaxing.
The increase in jobs for younger workers is likely to be linked to an increase in jobs in the accommodation and food services sector. This is mostly the result of a slight easing of restrictions and also just a bit of a rebound from an incredible drop.
Accommodation and food, and the arts and recreation sectors were two of the industries that saw the best job growth in the first week of May but they are also the two which have suffered the biggest overall job losses.
Even with a 5% increase in jobs in the first week of May, there are still 27% fewer job in the accommodation and food services industry than was the case at the end of February.
That more than one in four jobs in the industry have gone in a month remains utterly shattering to contemplate, and also explains why the job losses are so decidedly varied across the regions.
In New South Wales, for example, the Blacktown region has seen the smallest drop in jobs – down 4% (still astonishingly large), and yet it pales in comparison to job losses on the tourist friendly mid-north coast, which has had nearly 12% of jobs disappear:
Across the country there is a clear sense that the areas that are suffering the most are those most dependent upon tourism – such as the Gold Coast (down 9%), the Sunshine Cost (down 10.2%) the SA Barossa region (down 9.6%) and Coffs Harbour-Grafton (down 11.2%):
The erratic level of job losses looks set to continue as we move from shutdown to soft reopenings.
The latest preliminary retail trade figures highlight just how far we have to go before things get back to “normal”.
In March total retail trade surged a record 8.5% off the back of panic buying and stockpiling of home goods to use during the shutdown.
But in April came the hangover of that splurge and it was a killer. The ABS estimates that retail trade in April plunged nearly 18%:
So great was the fall that the spending in April was the lowest it has been in any month since 2015 – when Australia’s population was some 1.5 million smaller.
And while of course there was the big spendathon in March, the combined retail trade in March and April was 1% below the combined amount spent in January and February.
What this all means in the context of shopping centres reopening across the country is hard to say. Yes, there may be shops open, but will there be people spending money in them? It is not enough to announce that the economy is open – the economy actually has to open – and given how dependent we are on exports, that means open internationally.
Tourism looks set to suffer for a long time yet. Domestic travel will help, but as one who last year had booked a holiday to Queensland for July and is now in the process of trying to get refunds, it is clear the snapback is not going to be fast.
Anecdotally, people do seem to be frequenting retail shops in good numbers since the easing of restrictions (at least from my experience in the Australian Capital Territory), but it is all dependent on there not being another spike in cases, which would see people isolate themselves quickly and the job losses fall sharply yet again.
But that means easing the restrictions will need to be done slowly – and that, by extension, slows the ability for the economy to return to any type of pre-virus level.
There are some OK-ish signs in the latest job figures, but only compared with the worst period of the past two months. By comparison with any “normal” time, the first week of May saw an obscene number of job losses. We have a long way to go yet.