26/04/2013 - 06:56

Fewer hours worked, more seniors in a job

26/04/2013 - 06:56

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There have been some amazing changes in the composition of the workforce.

There have been some amazing changes in the composition of the workforce.

Australians are working fewer hours; there are more and more seniors in the workforce and there is a much smaller proportion of young people in jobs.

First to hours worked. In part reflecting an increase in part-time workers but also an increase in productivity and changes in lifestyles, the average number of actual hours worked by Australians hit a record low of 31.8 hours a week in the year to March.

At the start of the data series in the late 1970s, average hours worked stood at just over 35 hours a week.

In the 1980s and 1990s, Australians worked longer and longer hours. But no more. Technology has enabled more to be done in fewer hours. People have re-assessed lifestyles.

And there are more people in the workforce, so hours are being shared around. A raft of changes but all very beneficial and showing how our standard of living has improved over time.

Participation rates

Due in part to lifestyle choices, the global financial crisis and federal government incentives, a record proportion of senior Australians are in the workforce.

Almost 54 per cent of those between 60 to 64 years were in the workforce on average in the year to March. And a record 12.1 per cent of those 65 years or over were also still working.

The contrast with younger workers is stark. There were almost 79 per cent of those aged between 20 to 24 years in the workforce on average over the past year. It sounds high, but it is the lowest proportion on record, down from highs near 84 per cent.

Similarly, the proportion of those between 15 and 19 years holding down a job is close to record lows.
Young people are opting to stay in school or go on to higher education rather than join the workforce. And while that may increase their productivity in coming years, there are no guarantees.

Overall, the workforce participation rate is at five-year lows. But, remarkably, it is also only 0.4 percentage points below record highs.

Australians are still actively holding down jobs. Rather, it is the composition of employment that continues to change.

What are the implications for interest rates and investors?

More seniors are supplementing their income through part or full-time work, buoying economy-wide spending on travel and adding to the shift of spending from goods to services.

The job market remains in strong shape. The participation rate has not fallen markedly from record highs meaning there are not a large number of discouraged workers that could re-enter the workforce and drive up the jobless rate.

The Reserve Bank is unlikely to be worried by the small lift in the unemployment rate over the past six months.

Sometimes it pays to stand back and assess the big picture and challenge stereotypes.

The standard of living in Australia continues to improve. We are working shorter hours but are more productive. And wages have risen in line with our increased productivity and at a faster rate than prices. As a result, affordability has improved for a raft of goods and services.

Australians are travelling overseas in record numbers, saving more, have less debt, buying more cars and are generally better off.

Services businesses are the real winners from the improved financial circumstances.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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