Did Queensland see the largest fall in jobs

A policy document from the Liberal National Party in Queensland says that the state is vying for last place in terms of unemployment, and that a record 30,000 jobs were lost in the state last year.
Courtesy: Glenn Hunt

Unemployment is shaping up as a key issue in the Queensland election campaign. The State Opposition is keen to portray Labor as a party of economic wreckers “costing Queenslanders jobs and opportunity”.

In late October, the Liberal National Party released a policy document, “Getting Queensland Back in Business”

It says: “Under Annastacia Palaszczuk, Queensland is in a battle for the unemployment wooden spoon. Last year, Queensland lost 30,000 jobs — our worst year on record.”

Is Queensland vying for last place when it comes to unemployment? And is correct that last year 30,000 jobs were lost from the state economy, the largest fall on record? RMIT ABC Fact Check investigates.

 

The verdict

The LNP’s claim is misleading.

Although Queensland employment did indeed fall by about 30,000 in 2016 — the biggest fall for any calendar year since the current employment series started in 1978 — the LNP has ignored the surge in jobs over the past ten months, which has offset the 2016 loss more than three times over.

The most recent figures also show Queensland now has the strongest annual employment growth in the nation, although as one expert pointed out, after a year of relative weakness in 2016, the state’s job market has been coming off a lower base.

The LNP is not justified in using the 30,000 figure from 2016 to illustrate its assertion that Labor, which has been in power since February 2015, has cost Queenslanders jobs.

While the unemployment rate in Queensland, at 5.9 per cent, has been slowly trending down, it remains above the national average, and only slightly below Tasmania, which has the highest unemployment.

Like some other states, the unemployment rate has been higher than it otherwise might have been because of an increase in the number of people actively looking for work. And, as a second expert noted, five out of six states are grouped in a relatively narrow band of unemployment, meaning Queensland’s unemployment ranking could quickly change.

Furthermore, as two experts noted, state government policy is only one of several factors that influence the jobs market.

Others include federal politics, international economic conditions, exchange rates and interest rates.

Given these dynamics, to suggest that a state government is solely responsible for the performance of the labour market is a stretch.

Context to the claim

The LNP document, signed by Opposition Leader Tim Nicholls, Deputy Leader Deb Frecklington and Shadow Treasurer Scott Emerson, makes two broad attacks about the state’s labour market since Labor took office.

In the introduction, the LNP argues “Labor can’t manage the economy and this is costing Queenslanders jobs and opportunity”.

“Under Labor we’ve seen Queensland’s domestic economy shrink, business investment plummet, business confidence at the lowest level in the country and 30,000 jobs lost last year — our worst year on record,” it says.

In a later section titled “Under Queensland Labor you are falling behind”, the LNP says that “worryingly under Labor, Queensland has fallen further and further behind” and that it has become “harder to get a job” in Queensland since Labor was elected.

The key information the LNP offers to support this proposition is its claim about the 30,000 lost jobs and the unemployment rate compared with other states.

Measuring employment

Fact Check contacted the LNP to ask for the source of its claim, but received no response.

The “Getting Queensland Back in Business” policy document shows it has relied on the Australian Bureau of Statistics’ labour force series for the claim.

Related Story: Fact check: Labor claims unemployment in Qld highest in 11 years

A graph included in the document indicates that when the LNP refers to job losses “last year”, it is referring to the 2016 calendar year, not the 2016-17 financial year.

In a previous Fact Check examining unemployment in Queensland, the Australian Bureau of Statistics advised that trend employment data, as opposed to seasonally adjusted data, was a preferable measure.

To measure the number of jobs created or lost over the course of a particular year, Fact Check has compared the December figure for each year with the December figure of the previous year, tracking the change over 12 months.

Was the fall in employment in 2016 the biggest on record?

Fact Check has analysed the current ABS Labour Force series for Queensland, which begins in February 1978, to produce the following graph, showing calendar year changes in employment.

In 2016, Queensland lost 29,600 jobs in trend terms. This accords with the Opposition’s claim that Queensland lost 30,000 jobs last year.

As can be seen in the graph, in terms of job losses, this was the largest in a calendar year for the current series.

There have only been three other years of calendar year job losses in Queensland since the series began: 1982, when employment fell by 1100; 1990, when it fell by 5600; and 2009, when it fell by 5400.

The LNP’s claim that Queensland experienced the worst year “on record” appears to be based on the current labour force series.

Prior to 1978, some labour force statistics were kept. Fact Check has also examined the ABS series, Labour Force: Historical Time Series, covering the period from 1966 to 1977.

The two series cannot be directly compared for a variety of reasons, including because the older figures provide an unadjusted “original” estimate, rather than using a “trend” estimate to reduce volatility.

Also, it provides an employment estimate for the month of August for each year.

These issues aside, the historic series shows employment in Queensland grew over the 12 months to August in each year from 1967 to 1977.

Despite relatively rapid growth in total employment over this period the unemployment rate in Queensland increased sharply, rising from 1.5 per cent in 1967 to 6.2 in 1977.

Fact Check has not examined any data that may be available prior to 1966, leaving open the possibility that Queensland may have recorded bigger annual falls in the past, for example during the Great Depression of the early 1930s.

Employment growth in 2017

In its policy document the Queensland LNP only used figures up until 2016, leaving out employment data for 2017.

David Peetz, Professor of Employment Relations in the Centre for Work, Organisation and Wellbeing at Griffith University, said it was “a bit disingenuous” for the LNP to use the present tense “is” when referring to data that are “quite out of date”.

“So, yes, trend employment in Queensland fell by 29,600 between December 2015 and December 2016,” Professor Peetz told Fact Check.

“But that’s nearly a year ago, and national employment growth was less than a third then of what it is now in trend terms.”

Professor Peetz said Queensland and Western Australia, both mining states, suffered when “commodity prices fell and mines closed” following the end of the mining boom.

“This would be the biggest single factor in what looked like a poor employment record in 2016. But that’s been more than offset since then.”

During his speech at the LNP’s campaign launch on November 19, Mr Nicholls repeated the claim that Labor “lost 30,000 jobs in a single year”.

As the following table demonstrates, jobs growth in Queensland over the most recent 12 months has been easily the strongest in the nation, both in terms of numbers and percentage changes.

In trend terms, total employment in Queensland grew by 108,100 over the 12 months to October 2017, an increase of 4.6 per cent compared with October 2016.

Another way to examine Labor’s performance is to look at the number of jobs created since it came to power, particularly since the LNP uses the phrase “under Annastacia Palaszczuk”.

The Queensland election was held on January 31, 2015, with Ms Palaszczuk sworn in as Premier on February 14.

As Professor Fabrizio Carmignani, from Griffith University’s Business School, pointed out in a recent article in The Conversation, there are arguments for and against including February 2015 as the “first” month of the Palaszczuk Government, or the last month of the Newman government.

If the State Government’s term is measured from February 2015, employment in Queensland grew by 128,800, or 5.6 per cent.

This was broadly in line with the national increase of 5.7 per cent over the same period, although lower than NSW and Victoria.

The unemployment wooden spoon?

According to the Macquarie Dictionary the wooden spoon is the “notional prize awarded to the individual or team coming last in a sporting competition”.

Is Queensland in a battle for last place when it comes to unemployment?

At 5.9 per cent, the state’s unemployment rate is above NSW, South Australia, Western Australia, the Northern Territory and the ACT.

It is equal to Victoria, and only 0.1 percentage point below the worst state, Tasmania.

The state’s unemployment rate has, however, fallen since the 2015 election, edging down from 6.2 per cent to 5.9 per cent.

Queensland’s unemployment rate would be lower, were it not for a significant increase in the number of people classified as actively looking for work.

The state’s labour force participation rate, a measure of the proportion of the working age population either in work or actively looking, was 65.7 per cent in October 2017, up from 64 per cent a year earlier.

In terms of the October 2017 unemployment rate, five out of six states, including Queensland, are grouped in a fairly narrow 5.6 to 6 per cent band.

“You could just as readily say that Queensland is in a race for second best as in a race for the worst,” Professor Peetz said.

“I don’t recall seeing such bunching between the states for a long time.”

What the Australian Bureau of Statistics says

In a statement to Fact Check, the ABS said there been no collection methodology or questionnaire changes to the labour force survey that would have affected the figures in 2016 or 2017.

Rather, Queensland employment growth in 2016 had been consistent with the “relatively subdued” national trend throughout the year.

“This trend was also evident in most other states, including NSW and WA,” the ABS said.

“Victoria was the main state to show strong growth through 2016.”

It said the pick up in employment evident in Queensland throughout 2017 was also consistent with the national trend, and the majority of states.

What the experts say

Professor Peetz cautioned that there were problems with both employment and unemployment as indicators.

“The latter in particular is influenced by variations in the labour force participation rate,” he said.

“An indicator that’s getting more credibility these days … is the employment to population ratio (or ’employment rate’). On that, Queensland’s is 61.9 per cent, just above the national average (61.7 per cent), above three states and below two (WA and Victoria).”

Professor Peetz said he had never understood why people believed job growth promises from state politicians.

“The truth is, federal factors are the biggest single influence on a state economy, though state governments certainly make a difference.”

Commsec chief economist Craig James said there were various ways to assess the data.

He said Queensland had the fifth or sixth best jobs market when comparing unemployment and employment with decade averages.

“Each state/territory will have a different ‘normal’,” Mr James said.

“So we consider comparison with ‘normal’ as the best way to view statistics. Unemployment of 5.9 per cent is … above the decade average of 5.6 per cent.”

Mr James said Queensland currently had solid employment growth, but off a low base.

“Annual employment growth in 2016 was the worst of all states/territories, so any improvement in 2017 would portray it in a better light,” he said.

“Encouragingly, job growth has lifted in 2017 (4.6 per cent annual), but Queensland employment still lags other states in a relative sense over the past decade.”

However, Mr James said Queensland employment growth in 2017 was the strongest of the states/territories in annual percentage terms.

Professor Carmignani told Fact Check that state government policy is “only one of many factors” influencing the labour market.

He said federal policies, economic conditions in trading partner countries, commodity prices, interest rates and exchange rates also play a part.

Professor Carmignani said while the unemployment rate in Queensland was still relatively high after labour market weakness in 2016, it was is “lower than it was”.

He said the LNP’s claim was “a bit of an overstatement”.

“If you look at the unemployment rate you could put Queensland second last in the ranking, but when you look at employment creation under Palaszczuk, Queensland is performing relatively well,” he said.

Source: http://www.abc.net.au/news/2017-11-22/fact-check-queensland-jobs-unemployment/9152266