‘Weak private sector’ causing unemployment rate increase
One employer group is pointing to the private sector market as a direct cause of an increase in the unemployment rate.
Last Thursday (17 July), the Australian Bureau of Statistics (ABS) revealed that the unemployment rate has risen to 4.3 per cent for the month of June.
Speaking on the data, ABS head of labour statistics Sean Crick said: “This month, we saw the unemployment rate rise 0.2 percentage points, driven by a 34,000 increase in the number of unemployed people.
“This month, we saw a decrease in full-time hours worked, down 1.3 per cent, associated with a 0.4 per cent fall in full-time employees.”
Innes Willox, chief executive of the Australian Industry Group (Ai Group), pointed towards what he has described as the “weak private sector” as having a direct correlation to this increase.
“[The] June labour market data, showing a rise in unemployment to its highest level since the pandemic, points to the impact that our weak private sector is having on the labour market,” said Willox.
“The unemployment rate rose to 4.3 per cent seasonally adjusted in June, with an additional 33,600 people looking for work. This is the highest unemployment rate since November 2021.
“This unfortunate outcome is a consequence of our weak private sector labour market. For over a year, there has been negligible jobs growth in the private market sector, with government-supported employment in the public and non-market sectors doing the heavy lifting.”
According to Willox, over the past year-and-a-half, job creation has been far too reliant on government-supported sectors.
“During 2024, approximately four in five new jobs created in Australia were in these government-supported sectors. As the Australian Industry Group has been warning since the start of this year, this level of dependence on the taxpayer for job creation is plainly unsustainable.
“With the private market sector accounting for two-thirds of employment in Australia, it was inevitable that its sustained weakness would eventually spill over to the broader labour market. It appears this problem is now coming home to roost.
“It is therefore imperative that the government takes immediate action to return the private sector labour market to health. There is much that can be done – on tax, energy, regulatory burden, industrial relations and more – to provide better policy settings for private sector investment and jobs creation.”
Workplace Relations Minister, Amanda Rishworth, claimed that the unemployment rate increase was an “inevitable consequence” of uncertainty surrounding the global economy.
“Despite the unemployment rate ticking up last month, ABS Labour Force data shows more Australians are in work than ever before.
“[The] figures show some slight softening in the labour market, but more jobs were created, unemployment remains low and participation remains close to its record high.
“While slightly higher unemployment is the inevitable consequence of extreme uncertainty in the global economy and the impact of higher interest rates, our labour market remains resilient.”
