18 AUGUST 2022
SUBJECTS: Unemployment rate, Wages data, Wages bargaining.
THE HON TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: I'm pleased to report today on the jobs figure that have come out.
Unemployment is down. Underemployment is down. Youth unemployment is down. Unemployment is now at 3.4, coming off a 3.5 figure. At 3.4 that is the lowest unemployment rate we've had since August 1974. Underemployment is down 6.0 down from 6.1. Youth unemployment is down to 7, down from 7.9. That is the lowest youth unemployment figure that we've had since that series began when that was first added to the stats.
There are some other figures which require a bit of explanation. There has been a fall in the total number of jobs, a fall of 40,000. But that follows eight consecutive increases totalling 750,000. Similarly, there's a drop in the participation rate from 66.8 down to 66.4 but that's off the back of significant increases. We're effectively back to where we were in the participation rate in April, which is well above, still well above where we were at in March 2020. 310,000 more in terms of the participation rate.
The hours worked have decreased by 15.6 million which takes total hours worked down to 1.8 billion hours, but this is largely a symptom, a symptom quite literally of COVID-19 and influenza during that winter period.
There's something that you can draw, though, when you connect yesterday's figures with today's. Today we had the jobs data, yesterday we had the wages data. The general pressures of low unemployment providing upward pressure on wages, the concept doesn't change, but if you look historically at the numbers we have now, there is clearly something broken in the system.
Compare where we're at now to August 2008, both were periods where unemployment was low, where participation was high, but with very different wages outcomes. In August 2008 we were at 4 per cent unemployment, which back then had been the lowest since 1974. We're now at 3.4 per cent. Participation rate, I said before participation rate now is at 66.4. Back then it was at 65.5, just below - both of them just below record highs. So in each case you had low unemployment, you had high participation, but the wage price index was a completely different story. August 2008 wages were running at 4.2%. We found out yesterday they're running at 2.6 per cent.
So effectively the hydraulic pressure of unemployment being low putting upward pressure on wages, that pressure's still there but we now - it's coming through in pipes that have all sorts of leaks coming out of them. Leaks off the back of a previous government trying to drive wages down for 10 years, leaks in terms of loopholes in the system that allow what were otherwise minimum rates of pay to be able to be undercut and the huge leak in the system, a bargaining system that has largely stalled.
On the deliberately keeping wages low, we changed that from the day we came into office with making sure that our first major decision was the submission to the annual wage review which resulted in Australia's lowest paid getting a pay increase of 5.2%. We've taken similar action with respect to the aged care work force.
In closing loopholes, we've made clear already for the loopholes that are there that allow wages to be undercut that we will act on the gig economy, we will act on some of the rorts that exist within the labour hire system, and that we will also be looking, and I put squarely on the table, the issue of the unilateral termination of enterprise bargaining agreements where we've seen recent cases of potential pay cuts of up to 40 per cent.
But the final stage is to get bargaining going again. We need to make sure that the nexus between low unemployment and wages getting moving again returns and we look to the Jobs and Skills Summit to be able to provide that information.
So that's the update on the figures, but, effectively, the story remains the same. The only way to make sure that we get wages moving, to be able to keep up with what's been happening with prices and for people to have some chance as time goes on to be able to get ahead again, is through the deliberate actions of government in pushing wages where we can, in closing loopholes where we find them, and in making sure that we provide the tools for bargaining to get moving again.