JobKeeper saved 700,000 jobs during the recession: RBA

The JobKeeper program saved 700,000 Australians from the dole queue, a report from the ­Reserve Bank of Australia finds.

The RBA’s finding that JobKeeper saved the jobs of one in five who received the wage subsidy is similar to Treasury’s estimates.

The JobKeeper program saved 700,000 Australians from the dole queue during the darkest depths of the COVID-19 recession, a report from the ­Reserve Bank of Australia finds.

The RBA paper found that one in five of the 3.5 million workers who received the $1500-a-fortnight wage subsidy would have lost their jobs were it not for the measure.

“Without JobKeeper, employment would have fallen by twice as much as it did,” report authors James Bishop and Iris Day wrote.

Josh Frydenberg said the RBA’s analysis “confirmed that the Morrison government’s JobKeeper program was a country-saving moment”.

The central bank’s business ­liaison program and other surveys have pointed to the wage subsidy playing a major role in keeping workers attached to employers through the crisis. But the study — titled How Many Jobs Did JobKeeper Keep? — was the “first to rigorously estimate the contribution of JobKeeper to stemming employment losses during the first few months of the scheme”, the authors said.

Mr Bishop and Ms Day studied labour force data from the Australian Bureau of Statistics over the first four months of the scheme. They contrasted the ­experience of casual workers who had been with employers for longer than 12 months against similar employees who had been employed for between six and 12 months.

The wage subsidy scheme only applies to casual workers with more than a year’s service, allowing the researchers to compare how similar employees fared. The $101bn JobKeeper measure is the largest labour market intervention in the ­nation’s history, with $69bn ­already having been paid over the six months to the end of September, on Treasury numbers.

Treasury has previously estimated that its package of measures — including JobKeeper and other payments such as the cash flow boost — had saved 700,000 jobs. The RBA report backed up those findings, and suggested, if anything, that Treasury may have underestimated the impact of the wage subsidy in terms of jobs saved. The study did not include the impact on employment from the boost to overall demand in the economy as a result of JobKeeper.

The scheme is likely to have had an even greater impact in sectors hardest hit by restrictions through the pandemic. A recent Deloitte survey, for example, found three quarters of retailers said the scheme helped them avoid redundancies.

 

The health crisis has already triggered Australian professionals in some of the hardest hit sectors to transition into different industries.

New data from LinkedIn showed professionals in the education and travel sectors in October were looking to switch industries at almost twice the rate of a year before. The number of recreational and travel workers looking for opportunities elsewhere was 80 per cent higher than 12 months prior, while there were 70 per cent more education workers looking to find work outside that sector.

Recreation and travel workers were most likely to be switching to IT, finance, and corporate services jobs, while education workers were most likely to be switching to healthcare, IT and public administration roles.