The Unemployment Rate Is At Its Lowest In A Decade: Business Owners Struggle To Recruit

The global pandemic shook the world and put our lives on hold – which at the time seemed like it would last indefinitely.

Though many inconveniences have now been resolved, and people have once again found their way through tough circumstances, there is however, a large issue that exists within the workforce.

The unemployment rate

The unemployment rate has returned to pre-pandemic levels; having dropped below 5% for the first time in a decade according to ABC News. Commonwealth Bank economist, Gareth Aird, has identified what the reason behind this unexplainable rise may be.

The pandemic has greatly affected Australian nationals, but more so, foreign non-resident workers who have been working in the country for less than 12 months. The reason the root cause of the employment issue has gone unnoticed is due to the labour force data being slightly inaccurate.

Where have the workers gone?

ABS publishes two data driven reports; a ‘quarterly’ report that lists every individual contributing towards Australia’s economy, and a ‘monthly’ report which fails to list overseas non resident workers.

Had these short-term workers been included, the employment scene would look significantly different. 

Since foreign workers made up a huge portion of the Australian workforce, their departure from the country proves to be the reason there are a large number of job vacancies. Gareth provided a rough estimated drop of around 521,000 workers (first quarter of 2020) to around 235,000 (first quarter this year).

Aird suggests the reason for their departure could be the lack of initiatives available to them.

The government of Australia introduced two initiatives for their people, the JobKeeper and JobSeeker schemes.

The JobKeeper initiative is a payment made from the government to businesses that were hit the hardest due to the coronavirus. These businesses could then pay their employees, to essentially keep them employed and not have to make them redundant in an attempt to sustain the business. The JobSeeker initiative is a payment made for the government to individuals between the ages of 22 to pension age and are looking for work. 

To qualify for the JobKeeper payment as a business, they are required to show the fall of turnover in one quarter alone, however, to qualify as an employee, you are required to be employed for over 12 months and, be an Australian resident. To qualify for the JobSeeker payment, you must be an Australian resident.

Both crucial initiatives failed to include a section of people who made up much of Australia’s workforce, and contributed towards the economy. 

This problem will now affect employers, who were previously struggling with a lack of workers, as they will be required to offer higher pays to possibly attract workers. This, mixed with the government’s order to increase minimum wage, may cause further issues among business owner who have been finding it tough to sustain operations. 

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