We’ve heard a lot of hullabaloo about employment rates, which currently show there are more people in jobs and fewer left searching for work, despite the doom and gloom around inflation and interest rates. It sounds good, doesn’t it? And it is.
Low unemployment, for the most part, has a positive impact on the economy. So why is it something we all need to pay attention to?
South Australia is experiencing a period of economic expansion, meaning our ‘little state that could’ is increasing its level of economic activity – a boom in the movement of goods and services. In fact, we’re doing so well that the CommSec State of the States report puts us as the third highest ranked state in Australia for economic performance.
As a reward for this economic expansion, as of July employment has grown by 4.8 per cent since the same month last year. For context, this is a lot higher than the rate of population growth (which was 1.6 per cent in 2022 – and that’s well above the long-term average). This means 43,600 more people working, reducing unemployment, and is a big win with lasting long-term benefits.
[breakout] Definition: Economics is a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services. Credit: Miriam-webster dictionary.
Why low unemployment is a good news story.
In March this year – in just one month – South Australia’s employment grew by 1.3 per cent, with over 12,000 more people in jobs in the state, pushing the unemployment figure to 3.7 per cent. That’s the lowest rate since monthly records began, more than 45 years ago.
Currently, The latest data (for July) tells us that South Australia’s unemployment sits at 4 per cent, with the national rate at at 3.7 per cent. That’s still very low, compared to historical levels.
All this suggests that we’re excelling at employing people who are able and want to work. We’re doing this, all the while seeing more and more people move to our state to fill our skills and labour shortages. Not to mention, the future’s looking bright with new pathways in education being built right here in SA. You can read more about our state’s technical colleges here and opportunities for those entering defence here.
What does low unemployment mean for the economy?
Essentially, if unemployment rates are low, it indicates there are plenty of jobs to go around for the population. Not only does that mean more people are able to work to provide for themselves and their families, but it also continues the movement of goods and services, and contributes to building the state.
This means more people recognising the beauty of our state, and using their paychecks to buy South Australian things in South Australia.
If you’re a South Australian food producer for instance, there are more customers and there is more cash going around ready to buy quality food and drink.
If you’re a South Australian cafe, there’s more people needing their daily coffee fix before or during their work day.
Equally, as we value people with skills, we’re training people on the job to be ready for advancement and new ventures. Skills are an important priority for the South Australian Government right now, and their investments have gone a long way to these employment rate gains. With the state experiencing an industry boom, it needs to deliver almost 100,000 vocational education training (VET) qualifications over the next five years to meet the skills demand. To do this, the State Government has committed over $5 million in grants to providers like TAFE SA. You can read more about that in this government press release.
What changed to create low unemployment?
The State Government has fought to bring industry to South Australia by leveraging the talent we have here. By investing in people, and strategising for future industry growth, we have invited expansion in sectors such as Space, Health, Technology, Agribusiness, and more that need skilled South Australians to operate and innovate.
By investing in the renewable energy sector for instance, we have become the national leader of renewable energy generation. This means jobs and clean energy for the state – it’s a win-win!
On that, you can actually read more about hydrogen as a source of renewable power in this article by The Post. Or, if you’re on the go, listen to the Hot Topics crew talk about hydrogen in this podcast:
Businesses are attracted to our competitive tax, insurance, and labour costs and with the government providing commercial partnerships in high-growth industries, employers are flocking here to utilise South Australian talent.
A significant barrier to employment is that people need to be trained to work for the available jobs, or have the skills to work in new industries. This is why the South Australian Government has introduced skills shortage solutions to address the Skills SA Skills Outlook. By creating skills centres for regional South Australia and connecting trainees with learner support on the My Training website we have transitioned people to work where we need them.
Our ability to rapidly introduce our growing population into the industries that need workers has set us up for the future, attracting employers to innovate solutions to problems while raising participation in the workforce.
How close can we get to full employment?
If you haven’t thought about these numbers before, you might be wondering why we can’t have the rate at zero per cent. While it would be great to make sure everyone has a job, not everyone can work and some people are just ‘between jobs right now’ (no, seriously) – referred to as “frictional” unemployment. Roughly a quarter of unemployed people have been unemployed for less than four weeks.
Unemployment can also arise when job-seekers might not have the skills or experience needed for jobs in industries that are growing. That’s why training South Australians to take up job opportunities in growth industries is so important.
The relationship between the unemployment rate and inflation is a hotly debated topic, and some economists expect that we will see the national unemployment rate rise to take some heat out of the inflation rate.
Regardless of where other states sit, South Australia’s unemployment rate is breaking our own records, and that is the best comparison to make.‘Compare your state not to other states, but to how your state was yesterday’ is an old adage (at least we think that is how it goes?).
There are currently 43,600 more people employed in South Australia compared to a year ago.. It is with a small amount of trepidation that we claim we’re in a good position moving forward, but the truth is that as our employment numbers shift and our national economy corrects itself in the post-pandemic era, South Australia has a strategic plan to make sure SA remains a fair, and prosperous place to live.