After the full-employment annus horribilis of 2016, this year the news in 2017 has been overwhelmingly good. Full-time employment is growing stronger than any time in the past six years. But a significant source of growth of full-time work has come from older workers. With the beginning of the retirement age being raised, there are now more people over 65 working full-time than ever before – and it is likely to be a sign of things to come.
The news on the employment front has been almost universally good in the past six months.
So strong has been the recent surge in employment that the government is now on track for the first time to reach the goal set by Tony Abbott at the 2013 election of 1 million jobs in five years:
In August, employment was growing at an annual rate of by 2.6% – the best for 18 months – and, better still, the hours worked is now growing at a rate of 2.7% – the best since the start of 2011:
The growth in hours worked is important because it is a sign that some of the slack is going out of the labour market. While the August figures also showed that underemployment remained at record highs, the better growth of hours worked should hopefully see that come down:
The growth of hours worked is also crucial for bringing a return of some normality to wages growth. If workers are worrying about having to choose between a higher wage rate and more hours, the choice for more hours will likely come first but after that a better wage rate should follow (but join a union as well).
The strong growth of hours worked also reflects that recently full-time work has been the big driver of jobs:
But where are these full-time jobs and who is getting them?
The good news is the growth has largely been across all states and both genders.
Men accounted for 148,800 of the 253,300 extra full-time employment in the past 12 months, with women making up the other 41% – an amount slightly above expected, given women account for 36% of all full-time employed.
While growth was most consistent in New South Wales and Victoria, Western Australia has also seen a solid increase – especially among women. But while the eastern states are powering ahead, the situation in WA is more about recovery – it still has 2% fewer people working full-time than was the case at the end of 2014:
When we look at age, however, we see a big change occurring.
The past 12 months has seen an amazing increase in the number of people over the age of 65 working full-time.
There are 26% more women over 65 working full-time now than a year ago and 16% more men:
It is a state of affairs that reflects the finding of the latest Household, Income and Labour Dynamics in Australia (Hilda) survey
The Hilda survey found that people turning 65 were now more likely to put off retirement than in the past.
It noted that men born 1935 to 1939 were the most “likely to have retired before age 60”, while those born 1920 to 1929 and 1935 to 1939 were the equal most likely to have retired before age 65.
But, by contrast, those born 1950 to 1954 are the least likely to have retired before 60 and those born 1945 to 1949 were the least likely to have retired before 65.
It has led to the point where there is a greater proportion of people over the retirement age working full-time now than ever before:
Nearly 10% of all men above the retirement age are working full-time – nearly double the rate at the start of the century.
The baby boomers are working longer than any generation before them and it is likely to be the start of an ongoing trend given that July this year saw the start of the increase in the pension age to 65 and a half years of age. It will increase by six months every two years until reaching 67 in July 2023.
The Turnbull government still has a policy of raising that to 70 years for those born after 1965.
At the other end of the age scale, millennials under 25 are less likely to be working full-time than any of that age ever before:
The slower start to full-time work, the greater actual participation rates for women, the increase in the retirement age all mean that while the baby boomers are working longer than ever before, those who will come after them will likely work much longer.
In essence what we’re seeing now for over 65s is akin to the changes in the labour force we saw for those in their 20s and 30s in the 1970s and 80s.
But we shouldn’t suggest all the full-time work is going to older workers. The biggest share of growth is still that of workers aged 25-64:
Even if we exclude the older and youth workers, prime-aged full-time employment is growing stronger than it has for six years.
And that is a good sign, one which hopefully will lead to an increase in real wages and households’ standard of living.
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