Coronavirus: Youth wages jump 17% as subsidies kick in

Workers under 20 that have managed to keep their jobs have seen wages jump an impressive 17% since the COVID-19 pandemic took hold in mid-March.

Young workers that have stayed employed have seen wages increase since the onset of the pandemic. Picture; iStock

While the nation struggles through the economic devastation wrought by the global pandemic, these are salad days for many of Australia’s youngest workers - at least those who have managed to hold on to their jobs.

Wages paid to employees aged under 20 have enjoyed an impressive 17 per cent boost to their pay since the COVID-19 pandemic took hold in mid-March, Tax Office payroll figures show, as the Morrison government’s supercharged wage subsidy program bolstered the paypackets of lower paid, casual workers in April.

More widely, the ATO figures, compiled in the latest Australian Bureau of Statistics payrolls report suggest the pace of job and wage losses due to the health crisis slowed over the back half of last month, bolstering hopes that worst of the crisis may have passed. Over the two weeks to May 2, wages as recorded in the ATO’s single touch payroll system lifted 1.4 per cent, while the number of jobs was broadly flat.

Between mid-March - when Australia recorded its 100th coronavirus case - and May 2, jobs are now down 7.3 per cent, against a 7.5 per cent drop reported in the previous ABS release for the five weeks to April 18. Total wages showed a bigger inflection, and are now down 5.4 per cent over the seven weeks, compared to an 8.2 per cent fall over the five weeks to mid-April.

ABS head of labour statistics Bjorn Jarvis said “the week-to-week changes are much smaller than they were early in the COVID-19 period”.

Citi chief economist Josh Williamson said that amid the staged reopening of the economy from this month on, job and wage losses are “now at a turning point”.

 

The turnaround in pay in April for our youngest workers has been more dramatic, led by industries hardest hit by social distancing restrictions, including the hospitality, arts and recreation and retail trade sectors, which are big employers of casual and young workers.

Wages for employees aged under 20 years had sagged by 10 per cent over the three weeks to April 4, as ramping restrictions strangled businesses such as cafes and restaurants which are big employers of younger staff.

But a dramatic reversal has taken place over the past month, with wages for the youngest segment of the labour market bouncing 30 per cent, bringing the total gains since mid-March to 16.8 per cent, according to the ABS.

Of course, only those who have managed to hold on to employment have enjoyed the fruits of the country’s biggest ever fiscal support program.

The data shows there were 15 per cent fewer jobs held by under 20s in early May than in mid-March, versus 7 per cent fewer for the wider population. This was despite a small, 1 per cent increase in the number of roles for under 20s.

Eligible employers were required to pay workers the wage subsidy in April in advance of receiving the government subsidy – a measure aimed at ensuring bosses were not simply pocketing the money.

 

Data compiled by the ABS for The Australian last month showed that 65 per of casual employees who have been with their employer for at least 12 months – and are therefore eligible for the JobKeeper scheme – earned less than $1500 a fortnight.

The businesses hardest hit by social distancing restrictions such as the food services and accommodation and arts and recreation sectors – which are also big employers of young, casual workers – have put staff back on their payrolls.

The latest ABS report showed the number of accommodation and food services jobs lifted by 9 per cent over the three weeks to May 2, albeit only trimming the fall in industry job losses since mid-March to 27 per cent. The sector’s overall wages bill climbed 24 per cent over the three weeks to early May, but remained down 12 per cent over seven weeks.

Over the past seven weeks there has been a 13 per cent surge in the pay of under-20 hospitality workers.

Total employee wages in the arts and recreation sector are now 5 per cent higher than when the epidemic began ramping up, while the youngest of the industry’s workers have enjoyed an incredible 90 per cent lift in pay.