New labour force figures show now is the time to focus on stronger wage growth.
The data released by the ABS today shows the link between record low unemployment and strong wage growth is broken.
With unemployment at these historic lows – we should be seeing wage increases.
For years we were told that low unemployment would lead to significant wage growth.
But we’re still not seeing that.
That tells us that something has broken down for workers after a decade of deliberate wage suppression by the previous government.
Yesterday’s Wage Price Index data showing real wages are taking a hit and today’s historically low unemployment figures at two sides of the same coin.
That’s something we’re committed to addressing – which is why we’re bringing business, unions, and other organisations together to discuss at next month’s Jobs and Skills Summit.
The Albanese Labor Government is committed to boosting job security and getting wages moving.
That’s why we’ve sided with aged care workers arguing for a much needed pay increase in a submission to the Fair Work Commission.
That’s why we backed an increase to the minimum wage in a submission to the Fair Work Commission – securing a 5.2 per cent increase.
Our plans include making job security an object of the Fair Work Act, getting a better deal for gig workers, stopping the labour hire rorts that are undermining wages, making wage theft a crime, limiting the use of fixed-term contracts and ensuring a better deal for women.
Today’s figures show:
Seasonally adjusted employment rate fell to 3.4% in July, 2022 – the lowest rate recorded since August 1974 (when it was 2.7%)
While seasonally adjusted employment fell over the month, by 40,900 to 13,558,400 in July – the decline was not unexpected, given that it follows 8 consecutive monthly increases totally 750,000.
Employment remains 556,100 (or 4.3%) above the level recorded in March 2020 (when Australia recorded its 100th case of COVID-19).
Full-time employment decreased by 86,900 (or 0.9%) over the month, to 9,409,400 in July 2022, although it remains 540,400 (or 6.1%) above the level recorded in March 2020.
Part-time employment rose by 46,000 (or 1.1%) over the month, to 4,149,000 in July 2022, and is now 15,700 (or 0.4%) above the level recorded in March 2020.
The participation rate decreased from 66.8% in June 2022 to 66.4% in July 2022, although it remains well above the 65.9% recorded in March 2020. This equates to a fall in the labour force of 61,200 (or 0.4%) in July 2022, although there are 310,400 (or 2.3%) more people participating in the labour force than in March 2020.
The employment to population ratio also fell over the month, by 0.2 percentage points, to 64.2% in July 2022, although it remains well above the 62.4% in March 2020.
The underemployment rate decreased by 0.1 percentage points over the month, to 6.0% in July 2022, and is well below the 8.8% recorded in March 2020.
Encouragingly, labour market conditions for youth improved in July, with youth employment increasing by 13,300 (or 0.7%) over the month, to a record high of 2,059,400 in July 2022.
The youth unemployment rate fell from 7.9% in June 2022 to 7.0% in July 2022, the lowest rate recorded since the inception of the monthly series in February 1978.
The youth participation rate decreased marginally over the month, to 71.7% in July 2022, but is well above the 68.3% recorded in March 2020.
These figures show resilience in the Australian labour market, and while wages have begun to move workers are still falling behind inflation.
The latest ABS Wage Price Index data (for the June quarter 2022) shows wages grew 2.6 per cent – the strongest pay packet growth since 2014.
But that’s against a background of inflation at 6.1 per cent – meaning real wages went backwards by 3.5 per cent. That’s the biggest fall in real wages since 1998.
This Government is committed to getting wages moving again and that will be a focus of next month’s Jobs and Skills Summit.