Between early April and early May, Australia continued to experience unprecedented interventions in the labour market, which included restrictions to slow the spread of COVID-19 and government support packages to mitigate its impact on individuals, households and businesses.
A large number of people had their hours reduced or were stood down in April, as social distancing and other business restrictions came into effect. These conditions continued into May, with social distancing rules impacting work and job search activities, while changes to schooling arrangements may have reduced people’s availability for work, or ability to look for work.
The implementation of the JobKeeper wage subsidy and changes to the JobSeeker program, including changes to the mutual obligations for payment recipients, will also contribute to changes in the labour market activity of people in Australia in May and later months.
Given these unique circumstances, the deterioration in the labour market was largely reflected in falls in hours worked (down by 0.7%), the participation rate (down 0.7 pts to 62.9%), employment (down 227,700) and the employment to population ratio (down 1.1 pts to 58.4%), and less so in an increase in unemployment. The number of unemployed people rose by around 80,000 people to 927,600 (a rise in the unemployment rate of 0.7 pts to 7.1%).
The underemployment rate decreased 0.7 pts to 13.1%, reflecting a reduction in the number of part-time workers who indicated that they would prefer to work more hours.
Had the increase in the number of people who were not in the labour force between April and May (142,000) been a further increase in unemployment (that is, if they had been actively looking for work and been available to work) then the number of unemployed people would have increased to around 1.1 million people (and an unemployment rate of around 8.1%).
Looking at the cumulative change between March and May, had the increase in the number of people who were not in the labour force (623,600) been a further increase in unemployment, then the number of unemployed people would have increased to around 1.55 million people (and an unemployment rate of around 11.3%).
These estimates highlight the sizable impact of developments over the past two months on people working in Australia.