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Australia’s race to the bottom to part-time jobs with low-pay

Bill Mitchell says:

Over the 12 months to July 2016, the Australian labour market added only 219.8 thousand (net) jobs. 190.1 thousand of them have been part-time – that is 86.5 per cent.

In that time, underemployment (part-time workers who cannot find enough hours of work to satisfy their desires) rose from 7.8 per cent (951 thousand persons) to 8.9 per cent (1133.7 thousand persons).

So there is now an extra 182.6 thousand workers who are in part-time employment but not working to capacity.

The table below shows the distribution of net job changes across industry for the three periods analysed matched with their place in the pay distribution.

The bold entries in the Below Average AWE column are those industry sectors that are 75 per cent or less of the All Industries AWE (that is, our low wage sectors).

The slowdown in the last 6 months is apparent as is the sectoral decline in Manufacturing, Wholesale Trade, Information, Media and Telecommunications.

There has also been a collapse in Professional, Scientific and Technical Services in the last 6 months, which is consistent with the declining full-time employment growth over that period.

These are all above-average paying industry sectors. Australia_Industry_AWE_Employment_Change_2008_12_6_Months

Over the last 6 months:

1. Low Pay sector jobs change account for 28.6 per cent of the total change in employment (at May 2016 these jobs accounted for 20 per cent of total non-farm industry employment).

2. Below-average AWE jobs change account for 85.2 per cent of the total change in employment (at May 2016 these jobs accounted for 50.9 per cent of total non-farm industry employment).

3. Above-average AWE jobs change account for 14.8 per cent of the total change in employment (at May 2016 these jobs accounted for 49.1 per cent of total non-farm industry employment).

Overall conclusions from the analysis:

1. It is clear that in the more recent periods, the bias towards low-pay work has intensified along with the rising part-time ratio and the rising underemployment.

2. Over the last 12 months, the low-pay jobs are being created in far greater proportion than one would expect from their overall place in the jobs distribution as at May 2016.

3. Over the last 6 months, the disproportionate growth in below-average paying jobs has been accentuated. See more on Bill’s excellent blog

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