In my post last week How many jobs needed to be created over the Qld Government’s first term?, I compared the actual job creation rate of 1,400 per month with the rate of 2,200 per month that would have been required to maintain the unemployment rate at 5.5% (instead of seeing it increase to 6.6%). A comment from Pete Faulkner made me realise that the required job creation rate would have been much higher if the labour force participation rate (i.e. employed + unemployed as a percentage of 15+ population) hadn’t fallen from 66.8% to 65.2%.
The fall in the participation rate has reduced labour force growth and thus the required number of jobs. If the participation rate hadn’t fallen, around 3,900 jobs would need to have been created each month since March 2012, nearly three times as many as were actually created (see chart below). To some extent, the fall in the participation rate since March 2012 will have reflected the ageing of the population, but a large part of it would have been due to many people being discouraged by the weak labour market and giving up on looking for a job.
Pete Faulkner and his fellow Far North economics blogger Mark Beath have had some good posts lately on employment issues: