Yes, job vacancies are high. But laziness is not the reason they aren’t being filled
Right now the economy is not operating as it should. The government wants things to be normal, and so jobmaker is gone and the jobseeker bonus as well, and yet the economy is still dealing with the shock to its system that is the pandemic.
Now sure, on the surface things look fine ... ish.
The IMF this week announced that it had revised up the estimate for Australia’s GDP growth for 2021 from 3.5% to 4.5%.
Yes, it revised down its projection for next year’s growth from 2.9% to 2.8%, and it does not expect the economy to grow faster than that out to 2026, which is another period of very middling growth. But hey, let’s focus on the positives!
This good news came on the back of the latest job vacancy report released by the bureau of statistics that showed the number of vacancies in February was some 26% above that in February last year.
That growth is stronger than any seen since the end of the GFC.
It also means that the number of unemployed per vacancy is well down – just 2.8 people per vacancy – lower than was the case before the pandemic hit. Graph not displaying? Click here And yet, all this great news of vacancies and improved economic growth is actually more of a sign that we are still within the great flux of the pandemic.
The economy, for all its moving parts and complexity, often works in pretty predictable ways.
For the past 25 years, there has been a pretty solid relationship between job vacancies and unemployment. But that has ended in a dramatic fashion with the pandemic.
Over the past quarter of a century when the job vacancy rate was around 1.8%, as it was last November, you would expect the unemployment rate to be around 4%. Instead, it was 6.8%. Similarly, when in February we had a job vacancy rate of 2.1% (the highest ever recorded) you would expect unemployment to be at record lows. Instead, it was at 5.8%.
There are jobs available, but they are not being taken up.
Now you might think this is because “people are lazy” or that the jobseeker bonus meant they didn’t want to work because the payment was higher. But the actual explanation is there are a lot of vacancies for jobs that most people are not seeking.
In February last year, 43% of job vacancies were for managers and professionals, and yet those two occupations only account for 23% of the growth of vacancies over the past 12 months.
ICT, and business, finance and HR professionals usually account for around 39% of all vacancies for all professionals, and yet they made up just 6% of the increase in vacancies over the past year.
Conversely, there has been a big surge in vacancies for labourers, machinery operators, technicians and trade workers, and for community and personal service workers.
So yes, lots of new jobs, but an unemployed accountant is hardly about to start applying for a job operating machinery. And saying “everyone should go pick fruit” sounds easy in a press release, but it’s not a realistic prospect if you have family commitments a long distance from a fruit orchard.
This is no one’s fault – it is what happens when an economy suffers a massive shock.
But these figures come from a time when the safety nets of jobkeeper and jobseeker bonus were still in place.
The treasurer’s department now anticipates up to 100,000 extra unemployed due to the end of jobkeeper. It is likely to see a rise in the unemployment rate even as job vacancies also rise.
The economy still has a long way to get to a point where the supply of workers starts to match the demand for labour.
As we begin the run to the budget, the temptation for the government will be to cherry-pick the good news and focus on restoring the budget to balance and claiming some sort of victory.
In truth, the economy remains in shock and in dire need of care.