Queensland’s unemployment rate drops while Australia’s surges

They’ve smashed coronavirus numbers and they’re also winning at keeping unemployment at bay. How is this state doing it?

Boy do I wish I was in Queensland right now. For the sunshine. For the lack of coronavirus cases. For access to my beloved game of Australian rules football. But also because Queensland seems to be managing its way through this recession really rather well.

New ABS Labour Force data shows that Australia’s unemployment situation worsened in June as the pandemic continued.

The national unemployment rate rose from 7.1 per cent to 7.4 per cent, with different results are different in different states. South Australia now has the nation’s worst unemployment rate, for example, rising from 7.9 per cent to 8.8 per cent.

But one state went the other way. As the next graph shows, Queensland was the only state to record an improvement in the unemployment rate between May and June. Amid economic mayhem, the sunshine state unemployment rate dropped from 7.8 per cent to 7.7 per cent.

(Northern Territory also improved, but its unemployment statistics are volatile and it is omitted from the graph.)

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Queensland bucked the unemployment trend in June, dropping by 0.11 per cent. Picture: Supplied.

How did they do it? Approximately 53,000 Queenslanders moved into jobs in the month of June, seasonally adjusted. That compares very favourably with the 29,500 jobs added in Victoria, although not as much as the 81,000 added in NSW, a state with a much higher population.

That Queensland’s economy did relatively well in June is related to their success in holding the virus at bay. The state recorded just 15 cases in the month, and it was sealed off rightly from the rest of the country, up until Premier Annastacia Palaszczuk loosened restrictions at the tail end of June.

In Queensland in June the number of full-time workers fell slightly and the number of part time workers rose a lot. A similar pattern was seen in much of the country, as the next graph shows.

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Most states have seen a rise in part-time workers. Picture: Supplied.

It is not ideal to see a big rise in part time work, but underemployment in Queensland remains relatively controlled, at 11.2 per cent, below the rate in NSW (11.3 per cent) and Victoria (12.8 per cent). If it can add more full time workers, that underemployment rate will fall.

PARTICIPATION

As we all know, the unemployment rate only counts people as unemployed if they are not working and looking for a job. You have to be looking for a job to be counted as participating in the labour force. Participation fell sharply in April and May as people dropped out of the labour force altogether. But in June, participation came back. That’s why the national unemployment rate went higher. People are getting counted again because they are looking for work.

In most of the country the lift in jobs was not big enough to match the rise in labour force participation, so the unemployment rate went up. Queensland was different. The lift in jobs was big enough that even a large rise in the participation rate, from 61.6 per cent to 62.9 per cent – could not stop unemployment from falling.

The data above is all from June, and July is likely to see Queensland streak further ahead of the other two east coast states, which are battling coronavirus outbreaks that are crippling Sydney and Melbourne. Partly because the Australian Football League is propping up its economy by sending hundreds of footballers and their families up to Queensland for the next few months.

It’s not quite ‘beautiful one day, perfect the next’ but Queensland is doing a lot of things right so far this pandemic. This Melburnian is envious!

Jason Murphy is an economist | @jasemurphy. He is the author of the book Incentivology.