Jobs for workers under 20 are on the up. But they’re shrinking for every other age group
The number of payroll jobs for Australians aged under 20 is rising above pre-coronavirus levels, but jobs for every other age group are on the decline.
Australian Bureau of Statistics (ABS) payroll data shows the number of payroll jobs for the under-20s has increased by 6.1 per cent since mid-March, when national lockdowns began.
Economists say this indicates businesses are preferring to hire younger workers at this stage of the recession, even before the Federal Government’s JobMaker Hiring Credit passes Parliament.
In the fortnight to October 3, the number of payroll jobs for young Australians increased by 2.8 per cent.
However, the number of payroll jobs has fallen for every other age group over the same period, with those over 60 hit the worst.
In the fortnight to October 3, payroll jobs fell for workers aged 20-29 (-0.8 per cent), aged 30-39 (-1.1 per cent), aged 40-49 (-1 per cent), aged 50-59 (-0.7 per cent), aged 60-69 (-0.9 per cent) and aged 70 and over (-1.9 per cent).
The ABS, which released the figures on Tuesday, said care needed to be taken when focusing on two weeks’ worth of data movements.
But if we look at the data since March 14 the disparities are more pronounced.
Since March, the number of payroll jobs has declined for workers aged 20-29 (-6.1 per cent), aged 30-39 (-3.6 per cent), aged 40-49 (-2.7 per cent), aged 50-59 (-2.8 per cent), aged 60-69 (-6.4 per cent) and aged 70 and over (-12.1 per cent).
JobMaker hiring credit for younger workers
The Federal Government’s 2020-21 Budget, released on October 6, included the $4 billion JobMaker Hiring Credit initiative, which was designed to provide an incentive to businesses to employ more Australians aged between 16 and 35.
The legislation passed the House of Representatives on Monday, but will not be considered by the Senate until next month at the earliest.
If it passes Parliament, the scheme will offer employers a “hiring credit” when they employ younger workers on JobSeeker or Youth Allowance: $200 a week for workers aged 16 to 29, and $100 a week for workers aged 30 to 35.
The Government says it is an important initiative to ensure young workers, school leavers and university graduates are not left behind by the recession.
The tax credit should support around 450,000 positions for young Australians over the next two years, according to Treasury.
However, economists say Tuesday’s payroll data shows employers are already preferring to hire the youngest workers of any age group at this stage of the recession.
“Nationally, payroll jobs worked by people aged under 20 years old continue to show the greatest strength, which are now 6.1 per cent above their pre-COVID levels, indicating businesses are preferring younger workers — even prior to the introduction of the JobMaker Hiring Credit,” EY’s chief economist Jo Masters said.
Recessionary conditions ‘broadening’ across the country
The decline in payroll jobs has started to migrate from smaller businesses, with under 20 employees, and businesses with 20 to 199 employees, to larger businesses with 200 or more employees.
In the fortnight to October 3, businesses with fewer than 20 employees and businesses with between 20 and 199 employees each recorded a decline in payroll jobs (-0.9 per cent), to be both down (-4.1 per cent) since March 14.
Businesses with 200 employees and more saw their payroll jobs decline by a larger amount in the fortnight to October 3 (-2.7 per cent), to be down (-6.4 per cent) since the beginning of the year.
“Today’s data demonstrates that the economic recovery from COVID-19 will be slow, as recessionary conditions broaden across the country,” Ms Masters said.
“The stress is becoming more evident for larger companies, with a 3.1 per cent decline in payrolls for NSW businesses with over 200 employees.
“Looking forward, the loss of job momentum raises concerns that the cyclical downturn is still to come,” she said.
The fall in overall payroll jobs in the fortnight to October 3 (-0.9 per cent nationally) comes after payroll job numbers increased (by 0.5 per cent) over the previous fortnight.
It means over the month to October 3 total payroll jobs declined by 0.7 per cent.
“It’s disappointing to see a stalling in the jobs recovery,” Commonwealth Bank associate economist Nicolas Guesnon wrote in a note to clients.
“The recovery in the labour market looks to have lost some momentum in recent weeks. Our internal data is showing a lift in JobSeeker payments over early October.
“However, we expect to see the recovery in the labour market resume. Further easing in restrictions in Victoria will help lift employment.”
Payroll jobs are jobs paid through Single Touch Payroll-enabled software to the Australian Taxation Office.