Can Government Print Jobs And What Does It Look Like?

Australia's unique migration and government funded job creation driven job market.

Earlier this week the release of the latest Australian jobs figures was the catalyst for Prime Minister Anthony Albanese, Treasurer Jim Chalmers and a laundry list of other Labor figures to proudly proclaim that a record 1 million jobs had been created during the government’s time in office.

On the face of it this sounds like a good thing, but when you begin to put into perspective it swiftly becomes clear that Australians are arguably worse off than when the Albanese government took power in May 2022. There are also serious questions about the sustainability of the job creation that has been seen amidst the strongest level of non-market (generally government funded) jobs growth in Australian history.

In order to quantify the experience of the Australian people we’ll be looking at three metrics:

• Job creation relative to labour force growth

• Unemployment rate

• Which industries and/or sectors were jobs created in

We’ll also get into an analysis on the share of government funded jobs growth over time.

Job Creation And Labour Force Growth

Since the Albanese government entered office, 1.04 million jobs have been created. This compares with a labour force expansion of 1.1 million during the same period and the working age population (civilians aged 15+) growing by 1.38 million people.

To put this into perspective across the same duration of time (28 months) prior to the pandemic the economy created 638,600 jobs, the working age population grew by 759,400 and the labour force grew by 602,200.

In short, the job creation seen in the time of the Albanese government is a reflection of the expansion of the working age population and by extension the labour force.

Part of the increase in the size of the labour force is down to a rising participation rate, which in a vacuum is arguably a positive. But given that various surveys show record levels of financial stress, there is a strong argument to be made that this has been heavily driven by the cost of living, not solely a genuine desire to enter the labour force for other reasons.

Unemployment Rate

When the Albanese government entered office the headline trend unemployment rate was 3.76%. In the following months it fell to a near 50 year low of 3.49% in October 2022. Since then it has risen to 4.10%.

Despite the government talking up its achievement of a record high level of job creation, there are 93,300 more unemployed people than when they entered office.

In fairness, the Albanese government did inherit a challenging set of circumstances and it would be perfectly understandable if the number of unemployed people was significantly higher again, after all that is part of the strategy the RBA is very publicly pursuing.

If that were the case in a vacuum, that would be understandable, but that isn’t how things have played out. The Albanese government has instead pursued a strategy of what I like to call Burnout Economics, keeping their foot flat on the accelerator driving job creation, taking migration to all time high’s and continuing to increase spending in a way that more than a few analysts have concluded is contributing to inflation.

Non-Government Funded Jobs Growth On Life Support

Recently the labour market made headlines after an Ai Group analysis of the split of public vs private sector jobs growth revealed the number of people in public sector jobs rose by 499,000 in a single quarter and the number in private sector roles fell by 516,200.

In year on year terms, private sector jobs growth was -264,2000 and public sector growth was 639,000.