Morrison’s 1.3 million job promise hinges on net migration

Prime Minister Scott Morrison has announced that he will create 1.3 million jobs in five years, but how will this be achieved?

refers to ‘the Coalition’s record of creating 1.9 million new jobs since it was elected’ and his ‘proven plans to generate these new 1.3 million jobs’.

But nowhere in his press release does Morrison refer to the level of net migration since the Coalition was elected (well over 1.5 million) or the increase in people holding two or more jobs. With negative or low wage growth, for many people, a job is not enough to survive.

For example, in 2018-19 there were 14.1 million people (including owner-managers) who had a job at any time of the year. They had 20.1 million employment relationships. From 2014-15 this had increased from 13.1 million employed people holding 18.4 million jobs.

In other words, the number of people employed during those four years increased by about 1 million, while the number of jobs increased by 1.5 million.

Of the 14.1 million people who had a job during 2018-19, 1.7 million had two jobs at the same time; 0.46 million had three concurrent jobs; and 0.2 million had four or more concurrent jobs.

Note that monthly labor force statistics for February 2022 indicate that only 13.72 million people were employed and 0.563 million people were unemployed. The lower number of employed persons in the monthly labor force series seems to be due to the fact that some persons are only employed in some months and not in other months.

I have not been able to establish which of these data series the Government is using to reach its target of creating 1.3 million jobs over the next five years, but to get as many as possible, it is likely that the Government using the number total labor relations in each year. That’s 20.1 million in 2018-19.

Over the next five years, the budget forecast is for total employment to increase by 1.5% in 2022-23 and then by 1%. annual later. It is likely to be related to the monthly labor force series.

The unemployment rate in the Budget is forecast to fall to 3.75% through 2024-25 and then back to 4%, despite Morrison’s labor bragging, there is no improvement on the current rate.

The participation rate is expected to remain at 66.5%, well below New Zealand, for example, which has a 71% participation rate.

That means the number of unemployed people is projected to rise despite an expected 1.3 million job creation.

It should be noted that over the next five years, the number of baby boomers retiring will accelerate further as more reach retirement age of 67 or retirement pension age of 60, when a retiree can receive a tax-free retirement pension.

Since 2008-09, the increase in the number of retirees in the population had already been accelerating to almost 90,000 annual (see Table 1).

(Source: ABS)

That figure is, of course, net of the number of retirees who die each year.

The total net number of retirees in the population will grow faster in the next five years.

So, if the number of unemployed people is forecast to rise, the participation rate is flat, and the number of retirees will grow even faster (and almost as fast as the number of new entrants to the labor market by natural increase), where will it be? the people come to create Morrison’s 1.3 million jobs?

There are only two ways this can happen.

The government may be assuming that even more people will take two or more jobs at the same time or at any time during the year. by Morrison ‘tested plan’ it does not indicate how many more people are expected to hold two or more jobs at any time during the year.

But most of the additional jobs will probably be absorbed by a higher level of net migration.

In this sense, the Government does provide a little more detail.

The only economic success of Morrison and Frydenberg is not even certain

The 2022 Budget forecasts that net migration in 2022-23 will increase to 180,000; 213,000 in 2023-24 and 235,000 annual thereafter.

That means a total net migration over the next five years of 1.1 million.

There is nothing wrong with using net migration to slow the rate of aging and grow the economy and workforce in the context of most developed nations with much older and soon shrinking populations.

The key will be the type of jobs the new immigrants will take on.

Problems arise if the government intends to continue its intensified focus on low-skilled, low-wage “guest workers” such as the Pacific Island Worker Visa and the new Agriculture Visa, as well as encourage students to work multiple jobs instead of studying and working as tourists. to work instead of vacation.

That would increase competition for insecure, casual, informal, low-skilled, low-wage jobs, which is not a problem in today’s strong labor market, but what will happen in the future?

The low-skill, low-wage approach the Government has taken is the exact opposite of Australia’s long-standing strategy of high-skill migration.

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