3.4 Million To Be Unemployed; Which Industry Will Be Hit The Hardest?
A new report from the Grattan Institute has warned of “either the worst, or one of the worst economic downturns in history,” predicting that as many as 3.4 million Australians will be out of work with the recent COVID-19 pandemic, as jobs that require close-contact like hospitality and the arts are hit particularly hard.
The report, which can be accessed here, forecasts that anywhere between 14-26% of Australians could be out of work, which are set to increase when a second-wave could potentially hit the economy. Authors of the report said that “history tells us that recovery from periods of high unemployment is rarely fast.”
Jobs that rely on close contact with others will, predictably, be hit the hardest by the recent economic downturn, with Grattan’s researcher and co-author of the report, Brendan Coates telling the ABC “that leads to an unemployment rate of somewhere between 10 and 15 per cent, which would be certainly the worst recession we’ve had since the 1990s and probably since the 1930s.”
The report predicts that hospitality workers will be hit the hardest of all industries in Australia, with a predicted 60% of jobs lost, while the arts and recreation industries follow close behind with a 50% reduction in employment. Those industries have been hit the hardest by lockdown procedures and social distancing measures that have meant a huge number of organisations can’t operate whatsoever.
Graphic courtesy of the Grattan Institute
The report adds that “many workers in retail trade, education and training and the arts are also at risk. Lower-income workers are twice as likely to be out of work as high-income earners.”
“Younger Australians and women are likely to be hit hardest, because they are more likely to be employed in occupations and industries most affected by the response to COVID-19.”
For those in hospitality that were able to adopt a takeaway menu and enforce social distancing measures, many are still lacking in the necessary foot traffic to turn a profit and make a day’s trading viable after paying staff, suppliers and their rent.
According to figures in the report, more than 40% of workers ages 15 to 19 would be out of work, and about 30% of workers in their 20s, and 25% of those in their 40s.
Co-author, Brendan Coates said: “Even though we’re all in this together in trying to make sure all Australians are protected from COVID-19, it’s younger Australians and lower-income earners who are likely to be bearing the costs of those economic costs today.”
“Lower-income workers are twice as likely to be affected by the crisis as higher-income workers because they tend to work in the kinds of industries that require close physical contact and therefore they’re likely to be out of work at the moment,” Coates said.
The report makes specific mention of the Morrison government’s JobKeeper wage subsidy package that will ‘disguise much of the impact of the crisis on employment,’ write the authors.
“Some Australians off work will continue to be regarded as ‘employed’ because they will receive pay from their employer via the JobKeeper scheme. And others, especially older workers, will give up looking for work and will therefore not be counted in the unemployment rate.”
While the government’s packages have been large, the Grattan Institute’s report states that their paper shows “that the economic shock from COVID-19 is going to be so big that more support will be needed,” they write.
Globally, Australia ranks second in a drop of job listings behind New Zealand, who have posted decreases of 50% and nearly 60% respectively. Unemployment figures are expected to top 10% in the June quarter, and the aforementioned predictions anticipate a top of anywhere up to 15% in Australia.