The Treasurer has a new favourite mantra — “1,000 jobs a day“.
It’s a new take on the familiar “jobs and growth” three-word slogan the Prime Minister took to the last election.
Scott Morrison is correct as there were 371,000 new jobs created over the past year, which averages to more than 1,000 per day.
But it’s a much less impressive statistic when compared to the breakneck growth in Australia’s population.
Australia’s population swelled by 388,000 in the year until June — which is more than 1,000 people being added to our population every day.
When you have a population growing that fast, you need to create a lot of jobs just to keep up.
For a Treasurer and Prime Minister who are interested in trumpeting headline figures like GDP, high population growth helps to inflate the numbers.
Simply by letting more people in, you bump up the overall size of the economy.
Comparing Australia to other countries
However, it doesn’t necessarily make life any better for the people who live in the country and arguably, makes it a lot worse.
This is more people competing for jobs and housing, pushing down wages and pushing up property prices.
Australia’s population growth is extraordinarily high when compared to our global peers, at 1.6 per cent per year.
This is more than double the rate of the US, nearly three times the rate of the UK, and four times the rate of France.
On current projections, Australia will hit 38 million people by 2050.
This high rate of population growth is driven mostly by high immigration.
Net migration was 245,400 people over the past 12 months — which was a 27.1 per cent increase over the year before.
That’s more than the total population of Hobart in new migrants coming to the country in a single year.
This is also a huge additional supply of workers (although a proportion would be children or the elderly).
The simple economic rule of supply and demand means these new workers effectively lower the price of labour, which means lower wages.
A huge intake of new workers makes economic sense if you don’t have enough workers in order to do the jobs you need to get done.
It also makes sense to run a real skilled migration program in order to attract the talent you can’t train yourself.
For example, at the height of the mining investment boom, attracting talent from overseas made sense in many occupations to allow projects to be built.
Although be careful when talking about ‘skill shortages’. Often it isn’t a case of there not being enough people with those skills.
Instead, it’s a case of businesses not being willing to pay enough money to attract people and thus choosing to sponsor foreigners who will work for worse pay and conditions.
Why workers are getting a raw deal
Australia is not currently anywhere near full employment.
At 5.4 per cent unemployment, Australia is well above the US which is sitting at 4.1 per cent and the UK at 4.2 per cent.
There are currently 707,000 unemployed Australians. These are people currently looking for work.
But that’s only part of the story as there are currently about 1.1 million Australians who are ‘underemployed’.
These are people who are currently working (perhaps as little as one hour a week) but want to work more hours.
So the number of Australians currently looking for more work is 1.8 million.
There is still a huge amount of ‘slack’ in the labour market which is keeping people from getting a decent pay rise.
Companies are much less likely to offer big pay rises to workers if they know there’s a big supply of other workers who are desperate for a job or more hours.
What’s really worrying, is despite the Government crowing about creating ‘1,000 jobs a week’, there are only 20,000 less unemployed Australians than there were a year ago.
The economic ‘growth’ hasn’t made a sizeable difference to the amount of Australians unemployed and has left us with the worst wages growth since the 1960s.
Companies are benefiting from this huge increase in workers and consumers. New migrants buy more things, which helps keep the tills ringing.
And new migrants also mean more potential workers, which keeps wages down.
This can be seen in the most recent profit figures, with companies experiencing a 27 per cent increase in profits in a year while workers received less than 2 per cent in wage increases.
With 1.8 million people out of work or looking for more hours and 250,000 new migrants moving to the country each year, there’s very little incentive for bosses to give workers a big rise.
Which is why, despite ‘1,000 new jobs a day’, workers are getting a raw deal.