Roy Morgan Unemployment down in Sept. to 12.9% – lowest in two most open States of NSW and SA

Latest Roy Morgan employment series data for September shows:

• The workforce is down:
  
  The workforce in September was 14,148,000 – comprised of 12,320,000 employed and 1,828,000 unemployed Australians looking for work. The workforce total is down 208,000 since August driven by falls in both full-time employment and unemployed Australians.
• Fewer Australians employed:
  
  12,320,000 Australians were employed, down 56,000 from August including 7,991,000 employed full-time, down 160,000, and 4,329,000 employed part-time, up 104,000.
• Fewer Australians looking for work:
  
  1,828,000 Australians were looking for work (12.9% of the workforce), down 152,000 from August. There were fewer people looking for full-time work, down 36,000 to 732,000 – the fifth straight month of declines for this indicator since peaking in April over 1 million, fewer looking for part-time work, down 116,000 to 1,096,000.

Roy Morgan’s unemployment figure of 12.9% for September is significantly higher than the current ABS estimate for August 2020 of 6.8%. However, the ABS figure for August estimated a large decline in the size of the workforce since March which they said was down 232,000. The ABS also counted an additional 152,000 Australians who were working zero hours in August as ‘employed’; people who ‘had no work, not enough work available, or were stood down’. If these non-workers are added the ABS unemployment estimate for August increases to 1.33 million (9.7%).

Michele Levine says:

“Roy Morgan’s unemployment measure for September shows 1.83 million Australians were unemployed (12.9% of the workforce) with an additional 1.33 million (9.4%) under-employed. In total 3.16 million Australians (22.3%) were unemployed or under-employed – down 112,000 on a month ago.”

In September 12.9% of the workforce (1.83 million Australians) were unemployed. This represents a decrease of 152,000 on August.

However, there were fewer people employed overall in September than August (down 56,000 to 12,320,000) driven by a decline in full-time workers (down 160,000 to 7,991,000) with an increase of 104,000 in part-time workers to 4,329,000, although not enough to offset the decline in full-time workers.

In addition to those who are unemployed 1.33 million Australians (9.4% of the workforce) are under-employed – working part-time but looking for more work. This is up 40,000 on a month ago driven by the increase in part time employment.

In total 3.16 million Australians (22.3%) were either unemployed or under-employed in September, an improvement of 112,000 on August according to the latest Roy Morgan employment estimates.

Michele Levine says:

“Unemployment decreased in September driven by falls across all States apart from locked down Victoria with unemployment virtually unchanged on a month ago at 12.1%. However, the drop in unemployment was driven by a contracting workforce rather than a surge in new jobs.”

In September, unemployment decreased across all States except locked down Victoria which was virtually unchanged on a month ago at 12.1% with a further 8.7% under-employed. On a State based level the biggest decreases in unemployment in September were in the States which are the most open – New South Wales and South Australia – which now clearly have the lowest unemployment rates in the nation at around 11%.

Although unemployment decreased in other States those with the toughest border restrictions – Queensland, Western Australia and Tasmania all have unemployment rates of at least 15% in September. Encouragingly, in recent days there have been signs that the border closures in these three States are set to be reduced as Federal Government economic support is tapered. Queensland is set to fully re-open to New South Wales at the end of October, Western Australia is set to allow visitors from Victoria to complete two weeks of self-quarantine, and Tasmania is set to re-open its borders to most of Australia in three weeks’ time.”

Compared to early March, before the nation-wide lockdown, there are now an additional 1 million Australians either unemployed or under-employed (+6.7% points).

NSW and South Australia drive the fall in unemployment and NSW again has the lowest of all

A look at the trends on a State-based level shows unemployment decreasing in all States except Victoria – which has spent the last three months in either Stage 3 or 4 lockdown with residents confined to their homes.

NSW and South Australia had the largest declines in unemployment in September and remains well below the national average in both at around 11%.

There were declines in unemployment for the ‘locked down’ States of Queensland, Western Australia and Tasmania but all three still have high rates of unemployment of at least 15% for the second straight month.

Roy Morgan Unemployment & Under-employment (2019-2020)

Source: Roy Morgan Single Source January 2019 – September 2020. Average monthly interviews 4,000.
Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

Michele Levine, CEO Roy Morgan, says unemployment decreased in September although this is not because of new jobs being created but rather people leaving the workforce as we approached a tapering of employment support measures such as JobKeeper:

“The decrease in the headline unemployment figure (from 13.8% to 12.9%) is NOT good news. The decrease in unemployment reflects the disturbing situation where more people have stopped looking for work. In September there were 56,000 fewer jobs or employed people and 152,000 fewer people looking for jobs. It’s a strange mathematical conundrum that we could have no unemployment – if everyone without a job simply gave up looking. Clearly this was never the intent of the unemployment metric.

“At a time like now – when jobs are held open, and the economy is held up by Government support, the metrics like ‘unemployment’, ‘employment’ and ‘the workforce’ take on very different meanings. What we call ‘the workforce’ is simply the sum of employed people plus people who are looking for work (unemployed). What about those who are employed but ‘stood down’ on JobKeeper – like a ‘holding pen’ waiting for their job to come back so they join the ‘employed’ or waiting to find they have no job – their employer no longer exists, or their job no longer exists, or their employer no longer needs them or can no longer afford them - so they join the ‘unemployed’.

“The Roy Morgan unemployment data suggests most of these people are not looking for work. Indeed the data shows fewer people are now looking for work than last month, even though fewer now have jobs.  This means the Australian workforce has shrunk.

“Government support measures including JobKeeper and JobSeeker were both reduced at the end of September with the JobKeeper wage subsidy for full-time workers lowered by $300 to $1,200 per fortnight and cut in half to $750 per fortnight for part-time workers. The JobSeeker payment for the unemployed has also been cut by $300 per fortnight.

“The reduction in Government support is forcing businesses that have relied upon these payments to continue trading over the last few months to assess how many of their employees are vital to the business and which may be too costly to continue to employ without the Government payments.

“The first tapering of the JobKeeper wage subsidy has brought these pressures into sharp relief and highlighted the importance of opening up economies when it is safe to do so. The most open State economy – New South Wales – has the lowest unemployment of around 11% and the second most open State – South Australia – is only slightly higher.

“In contrast, the highest unemployment rates are in Queensland, Western Australia and Tasmania – all States which have had hard border closures for months. The unemployment rates in all three States is above 15% for a second straight month.

“The question is when, if ever, will people start looking for work again?

“The Federal Government’s suite of economic support payments and programmes including Job Keeper and Job Seeker and additional payments to those on other benefits has successfully cushioned the most people from the immediate economic effect of the COVID and the associated lockdown measures. For many, their personal and household financial situation is better than before COVID – more money coming in and less to spend it on. The metric or number to watch is the number of people looking for work – measured in thousands of people – (real unemployment in thousands of people) – the truth is this number must go up – people must start looking for work if we are to get the economy going- jobs must be created.”

*Workforce includes those employed and those looking for work – the unemployed.

This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly face-to-face interviews of 707,911 Australians aged 14 and over between January 2007 and September 2020, and includes 6,092 telephone and online interviews in September 2020. *The ‘under-employed’ are those people who are in part-time work or freelancers who are looking for more work.

Roy Morgan Research cf. ABS Unemployment Estimates

Source: Roy Morgan Single Source January 2019 – September 2020. Average monthly interviews 4,000.
Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

Source: Roy Morgan Single Source January 2000 – September 2020. Average monthly interviews 4,000.
Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

Source: Roy Morgan Single Source April 1995 – September 2020. Average monthly interviews 4,000.
Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

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