Jobs on a roll, are higher wages next?

The April figures will tell us the real state of Australia’s jobs market but both the statistical and the anecdotal evidence suggests there will be only a slight bump up in the jobless numbers.

A year ago when 600,000 workers lost their jobs and another 3.6 million kept them but went on to JobKeeper.

AT last, we are back to where we started — a relatively normal jobs market. Let’s hope we don’t have to do it all over again.

We do first have to get through to the end of JobKeeper and the 1.5 million jobs — or something like one in every seven jobs in the private sector — that were still being supported by the taxpayer.

These latest official ABS jobs numbers are as at the first half of March; JobKeeper, of course, ended at the end of March.

So it will be the April figures that finally tell us the real state of jobs play.

But all both the statistical and the anecdotal evidence suggests there will be only a slight bump up in the jobless numbers.

Most of those 1.5 million will go seamlessly back to having their wages and salaries paid by their employers and not the taxpayer.

And those that do lose their jobs will do so into the best jobs market, not just since before the virus and the lockdowns but arguably since the last century.

Seek just reported the highest number of job ads posted in its entire 23-year history, consumer confidence is at record highs and business confidence is very strong, if not at records.

Back a year ago when 600,000 workers lost their jobs and another 3.6 million kept them but went on to JobKeeper, the central question was how many of those 3.6 million would have joined the 600k but for the taxpayer subsidy. Into this year the question had flipped 180 degrees: how many of the reduced 1.5 million number were in no danger of losing their jobs, but their employers were just getting a nice handout.

So far as keeping people in their jobs, a year ago JobKeeper was exactly right, albeit erring on the side of generosity especially for part-time workers.

The $90bn it poured into people’s pockets was also the single biggest driver of the rapid spring-back in the economy in the September and December quarters.

The spring-back was either the strongest or among the strongest in the developed world — after the June quarter plunge which was the worst ever.

This was mostly because we, Victoria aside, avoided the punishing second and indeed third lockdowns that ravaged especially the economies in Europe.

The pick-up continued into the March quarter and is continuing through this June quarter.

In the March quarter we will have recovered all the ground lost, and then some, since the last ‘normal’ quarter, pre-virus, back in December 2019.

What’s really helped in terms of jobs is what we haven’t seen over the past year, pretty much for the first time this century — migrants, both the permanent and the temporary ones.

We won’t be seeing them for months yet, if indeed we see them in any serious numbers at all this entire year.

And 2022? Who knows. You might say that the government’s tardy rollout of the vaccine is great news for those looking for a job.

There’s a further important benefit — both for workers and for the broader economy.

A strong jobs market is the fundamental pre-condition to getting rising wages. That’s also the single precondition nominated by the Reserve Bank to higher interest rates.

And yes, higher interest rates are a good thing; and not just for people with bank deposits currently getting zero.

At least we didn’t follow those countries that took their basic rates negative, so depositors had to pay the bank. And there’s now zero risk, the vaccine delivering, of that happening here.

The RBA has promised not to raise rates until early 2024 at the earliest. There’s now also zero possibility of it pushing that date out.

Again, the vaccine permitting, it will start to be under pressure to raise rates earlier and potentially much earlier.