MMMM…really Mr Swan

I don’t like to get too political in the sense that 1 side is better than the other. I think they both have their moments and I admire politicians and leaders (past and present) of both persuasions. But I have to write this blog because catalyst for it wound me up so much.

So here we go

Did you know the Australian government is holding a jobs forum on October 6th? Me neither. Apparently the uptick in unemployment has them so spooked that they feel they need to come out on the front foot and have a confab.

I stumbled upon this fact yesterday whilst choking on an appalling quote from Treasurer Wayne Swan. I thought he must have been misquoted but I was wrong. Bloomberg said that:

“Australia’s rise in unemployment last month doesn’t fully reflect the demand for workers in an economy that “continues to outperform” the U.S. and Europe, Treasurer Wayne Swan said.

“Recent jobs data has underestimated the strength of demand for labor in our economy given an increase in working hours,” Swan said yesterday in his weekly economic note.

Australia’s jobless rate jumped to a 10-month high of 5.3 percent in August, the second straight monthly rise, according to a government report Sept. 8. Prime Minister Julia Gillard’s administration is trying to counter declines in consumer and business sentiment that last month helped lift the ranks of the jobless to 636,800, the most since October.

“Many part-time workers have been picking up a few extra hours each week,” Swan said. “Had employers met the increase in labor demand by hiring new workers, we would have seen an additional 110,000 jobs created since the start of the year.”

Now, I’m not going to denigrate the fact that workers are getting a few more hours but this a really bad example of using stats to tell the story that you want them to tell, not telling the story that they actually tell.

Take the following charts for example. The first is total monthly hours worked divided by the total number of people employed. The second chart is the total average work week. You can see that both series have picked up recently, but equally, both are in a long-term downtrend:

A less politicised reading of these charts is that Australian businesses have been hoarding significant quantities of labour by spreading less hours amongst more workers. As they’ve realised that there is NO new boom coming, they’ve begun to shed that excess. Hence the number of hours worked per person is increasing. This is our productivity problem now reversing.

I’m glad the people in work are getting more hours but as my colleague Rumplestatskin over at MacroBusiness wrote this morning those losing their jobs are not necessarily about to find new employment easily.

Perhaps they can wait tables for a few hours at the impromptu job summit (fly in, fly out of course).

Cross Posted with MacroBusiness

This blog is for information only and does not constitute advice. Neither Greg McKenna nor Lighthouse Securities has taken your personal circumstances, objectives or financial situation into account. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.

If you do need economic, investment or financial advice we are happy to help.

Please Email the team at Lighthouse at or Greg directly on

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