Decline in jobs and incomes eases as coronavirus restrictions begin to lift, ANU survey finds

Via Yahoo Finance

The historic decline in jobs and incomes as a result of Covid-19 and associated restrictions may have come to a halt in May, according to a new ANU study.

The ANU’s Centre for Social Research and Methods found that – with dramatically improved health results and easing restrictions – employment has levelled out at 58% and average hours worked actually increased from 32.3 per week to 32.8 in May.

Despite improvements in wellbeing and job prospects, the study warns more than half of Australians are still anxious about Covid-19, almost a third think it is very likely they will be infected in the next six months and more than a third of the population are lonely at least some of the time.

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The ANU’s longitudinal survey of more than 3,200 Australians predicted a loss of 670,000 jobs in April – close to the official figure of 600,000 lost jobs measured by the Australian Bureau of Statistics heralding the largest contraction since the Great Depression.

The latest edition of the survey, conducted on 12 May, just days after restrictions began to ease, found the employment rate had arrested its decline, nudging down slightly from 58.3% to 58%.

The report’s co-author, Nicholas Biddle, said “the fact that employment outcomes have not continued to worsen appears to have translated into a significantly more positive outlook for the future within the Australian workforce”.

People expecting to lose their jobs over the next 12 months fell from 24.4% in April to 20.6% in May. The proportion who thought there was no chance they would lose their job rose from 34.6% in April to 39.2% in May.

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Household after-tax weekly income has also slightly improved, increasing from $1,622 in April to $1,652 in May.

Australians in the lowest household income bracket continued to enjoy the greatest percentage gains, with the lowest decile experiencing a 39% pay boost from February to May in large part due to jobkeeper wage subsidies and the doubling of the jobseeker unemployment benefit.

On Thursday the Reserve Bank governor, Phil Lowe, warned against withdrawing these payments too early, telling the Senate Covid-19 committee that “if the labour market is not improving we will need to keep the fiscal support, some way or other”.

Although unemployment sits at 6.2%, the Treasury believes the figure is in line with estimates of 10% unemployment once those who stopped searching for work due to restrictions are factored in.

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Scott Morrison has insisted that fiscal supports are temporary – even likening them to “medication” the economy should not become accustomed to – although the treasurer, Josh Frydenberg, has left the door open to “further support” to the hardest hit industries, such as tourism.

Labor has warned against withdrawing economic supports too soon and called for jobkeeper to be extended, although the opposition leader, Anthony Albanese, believes the $1,100 fortnightly rate of jobseeker should not continue, as it now sits higher than the aged pension.

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The ANU study found life satisfaction had declined from 6.98 out of 10 in January, to 6.51 in April, before bouncing back to 6.86 in May – “almost back to what it was prior to the spread of Covid-19”, according to the report’s co-author, Matthew Gray.

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Fewer people reported being lonely at least some of the time, down from 45.5% in April to 35.8% in May.

Overall Australians are less worried about the pandemic, with 57.4% saying they were worried or anxious as a consequence of Covid-19, down from 66.4% in April.

“However, young people are still doing it tough,” Gray said. “Our analysis shows that 18- to 24-year olds still feel the most anxious about Covid-19.

“In April 76.7% of them felt this way – the largest percentage of any age cohort in the country.”