We Told You So..

JobMaker misses the real target by John Black, CEO of Education Geographics, November 17, 2020

Today’s ABS Single Touch Payroll data confirms that JobMaker has come too late to help younger workers displaced by Covid job lockdowns and it is now missing the real target – older workers in retirement and tourist regions.

Outside of Victoria, Australia’s younger workers are already a lot better off than their parents, when it comes to jobs lost due to Covid lockdowns.

The Jobs Index numbers from today’s ABS release (below) shows workers aged 20-29 years are well ahead of their parents’ generation in the mainland states, with the exception of Victoria.

This is because younger workers tend to lose their more casual jobs in food and retail first during downturns, but then typically lead the recovery. This means, as a policy response, that JobMaker has come about four months too late for all Australian states except Victoria, which was held back by its second wave.

The figure below shows job losses for twenty something’s are still quite pronounced in Victoria, as the recovery there from lockdowns has only just begun (fortunately).

Even when we include Victoria in the national index numbers, the figure below, shows that workers less than 20 years of age now have more jobs than they did before Covid. By contrast, the big job losses by age deciles have been among workers aged 60 years and over.

Your humble correspondent has long felt that politicians overreact to the Labour Force stats which show that when a young person loses a job, they join the official unemployment rate and hence dominate news reports, whereas, when an older person loses their job, they tend to leave the official jobs market until they’re sucked back in by local rising demand – particularly for part time tourism and hospitality jobs in regional centres.

This resonates with the views of University of Melbourne economist Professor Mark Wooden who questioned the Federal Government’s focus on subsidising younger jobs, given the substitution effects which would see young persons prioritised over older workers.

“I worry if they (the Government) are somewhat sucked in by the argument that young people have been much worse affected economically,” he told the Financial Review after the Budget move was announced.

“That’s true, but I think that’s true in all recessions. Young people do worse, they lose jobs faster. But they also do better in the recovery.”

For more background, see my post What’s In An Age