CANBERRA, Australia – On Thursday, official unemployment data shows that around 600,000 of Australians lost jobs in a single month, primarily due to the coronavirus pandemic.
The official data for April shows 594,000 Aussies lost jobs because of the forced shut down of industries as the world faced health crisis due to COVID-19. In the efforts of the country to suppress the further spread of the disease, many businesses got closed, which led to employees losing their jobs and income. April’s jobless rate is the country’s highest since September 2015.
The most substantial increase in unemployed people in Australian history was back in October 1982, with 65,400 people getting unemployed. Now, the total number of Aussies out of work is over 823,300, the largest recorded for the country since September 1994.
The newly jobless Australians are mostly from industries hard-hit by the pandemic. It includes different economic sectors, such as tourism, education, hospitality, and recreation. Other thriving sectors also experienced a level of impact due to the coronavirus pandemic.
Josh Frydenberg, Australian Treasurer, defined the current situation of the country as heartbreaking. He voiced his solidarity towards the Australian people who are primarily affected by the pandemic, from workers to families who are currently struggling.
The official data shows that the previous 5.2% unemployment rate increased to 6.2% in April. Although the figures don’t show a massive increase, that understates the genuinely devastating effect that the labour market is currently experiencing.
The unemployment rate only considers those jobs laid off as businesses and industries locked down. It doesn’t include the number of self-employed Australians and casual workers who also got their work hours reduced due to the pandemic. The total work hours for most workers dropped by around 9% for the month.
Meanwhile, the underemployment rate, or the number of people who are looking for more work hours, increased to record levels.
The unemployment rate of the country also discounts the massive number of Australians who stopped actively seeking for jobs altogether because of the lockdowns due to the virus. That accounts to around 750,000 Australians. They are not counted as part of the data as they are not unemployed, technically. People who didn’t have jobs before the pandemic happened or before April are considered as in absence from regular work or are either work at home with JobSeeker or JobKeeper payments.
For now, Australians out of jobs, both unemployed and those seeking jobs before the pandemic happened, gets government support. Welfare payments for Aussies have helped individuals and households to brave through the health crisis as they lose their sources of income.
Meanwhile, all sectors in politics agree that the government’s cash assistance and subsidies much helped Australians deal with the COVID-19 restrictions and policies. That includes the imposed lockdown measures to help flatten the curve.
On the other hand, Michaelia Cash, Australia’s Employment Minister, said on Thursday that she is going to extend her decision for Australians to look for jobs until at least June 1 actively. Previously, people have to be actively looking for employment as a requirement to receive unemployment subsidy from the JobSeeker scheme.
However, the consensus for the people’s safety net with the emergency welfare from the government is coming to a dispute as COVID-19 restrictions start easing.
Meanwhile, the Australian Prime Minister Scott Morrison got asked about his commitment to ending the scheduled measures in September. The Prime Minister answered that his most concern is people getting too dependent on the emergency welfare provided by the government. He said that it could lose people’s drive to start actively seeking employment as soon as they are able.
The Prime Minister continued that Australia cannot have an economy where its people get addicted to receiving the measures the government has put in place.
On the other hand, the Reserve Bank of Australia released its prediction about the country’s unemployment rate. According to the central bank, the number of jobless Australians could increase to around 10% before the year ends.
Further, the Australian government is trying to consider the possible impacts that the broader economy has to shoulder if all citizens currently on emergency welfare lose all their sources of income. When that happens, the country’s economy could spark a high risk of defaults on personal and business loans.
The Commonwealth Bank of Australia also expressed concerns about the current standing of the country’s economy, as well as its future. Earlier in the week, Commbank already warned that if Australia’s unemployment rate would continue to increase, the country could see a drop in house prices. The bank said that property prices could decline by around 32% for the next couple of years.
Also, during the press conference of the Prime Minister after the release of the unemployment rate data, Mr Morrison expressed his devastation of what it means for the country’s economy. According to him, the impending economic downturn in Australia could have a more devastating impact compared to the global financial crisis.