Detailed labour force data for released by the ABS on Thursday – a week after it listed the state’s unemployment rate at 7.9 per cent – show that just 55.8 per cent of South Australians had a job in May.
It is the lowest employment to population ration since August 2001 and more than 4 per cent down on the 60 per cent figure for May 2019.
There were 876,500 South Australians in the work force in May, 42,000 fewer than in March.
The participation rate – those in work or actively looking – also fell to 60.4 per cent in May from 63.4 per cent in March.
The ABS also released its Job Vacancy Data on Thursday, showing the number of vacancies in Australia decreased by 43 per cent over the May 2020 quarter to 129,100, the largest fall on record.
Job vacancies in the private sector fell by 45 per cent, and by 29 per cent in the public sector. Victoria and New South Wales were the hardest hit states.
In South Australia, job vacancies fell from 11,700 in February to 6800 in May.
All sectors experienced falls in job ads across Australia with Accommodation and Food Services (14,700 – 5000), Construction (16,600 – 8300), Real Estate Services (3200 – 1000) and Arts & Recreation (2000 – 100) enduring the biggest falls compared with the February figures.
South Australian Centre for Economic Studies Executive Director Associate Professor Michael O’Neil said the figures would be much worse across the board if not for the Federal Government’s JobKeeper scheme.
He said three indicators all pointing in the same direction – higher unemployment, lower labour market participation and the sharp reduction in job vacancies provided evidence of a significant employment market contraction caused by COVID-19.
“Employers are reluctant to hire, the economy’s not ticking away at full bore and people are pulling out of the labour marker as well, so the participation rate is declining,” O’Neil said.
“And then when you look at the job vacancies, the construction side has slowed down, the retail side and the ones that rely on tourism such as food and accommodation have declined as well.
“They are trying to address construction with the $25,000 payment but even then you’d hope state and commonwealth governments are moving towards having some major infrastructure projects or mixed use residential developments come online as well.
“The Commonwealth has done a good job with JobKeeper and it’s been a really important initiative for employers and also politically because it has stopped the unemployment rising even more dramatically.”
O’Neil said the reduction in South Australia’s employment to population ratio was not related to the state’s ageing population as many workers approaching retirement age were more likely to choose to keep working as a result of the negative impact the pandemic had on superannuation balances in March.
“People who were thinking about retirement and then saw their superannuation balance go down then that is likely to mean more of them will delay the decision to retire for six or 12 months so they can compensate for the losses,” he said.
“I don’t see the employment to population ratio dropping too much further but at some point in time they’ll stop (JobKeeper) and we’ll probably get a bit more of a hit to unemployment but you would hope there is some underlying strength in the economy.”
JobKeeper is due to end at the end of September but if the economy doesn’t start moving again soon and if Victoria’s infection spike continues to worsen then the Federal Government is likely to come under pressure to extend the scheme.
O’Neil said the Federal Government had “sort of wedged itself in” with the September 30 deadline as any extension would be either too short or bring the end date too close to Christmas.
“They will be pretty angry politically about what’s happening in Victoria at the moment because they can’t remove a national policy when they’ve got one state – and a major state – in such a deleterious situation,” he said.
“If they put it on for another month until the end of October it doesn’t sound like much so they would be looking at extending it until mid-November but they certainly wouldn’t want to stop it just prior to Christmas.
“A component of that is a political decision and the question is, is the economy starting to pick up enough to warrant taking JobKeeping away in mid-November or do they need to run it through to January?”
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