How COVID-19 pandemic impacted working arrangements in labour market

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 How COVID-19 pandemic impacted working arrangements in labour market
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Highlights 

  • The work from home setup has considerably increased over the past year as the businesses redefine working arrangements.
  • Employee earnings have risen, though many jobs have been lost in the casual labour market segment.
  • The loss of jobs in the hospitality sector largely explains the drop in casual employment setup across Australia.

The mass adoption of the work from home setup has brought a radical change for the Australian labour market months after the country was hit by the pandemic. While some businesses continued their operations remotely, others were unable to switch to a digital environment and continued to suffer during the pandemic. Overall, the market has gradually become accustomed to this unique working setup.

The latest data from the Australian Bureau of Statistics (ABS) suggests that over 40 per cent of employed people were regularly doing work from home during the first half of August 2021. However, close to 64 per cent of professionals and managers were doing it regularly in August, relative to 25 per cent of individuals across other occupations.

 More businesses have become digital to incorporate WFH arrangement

 

Interestingly, employee earnings have also risen over the 12 months ended August 2021. The ABS data shows that median employee earnings went up A$50 over a year to August 2021. The median employee earnings stood at A$1,200 per week, while median hourly earnings remained stagnant at A$36 per hour.

RELATED READ: Is the Australian labour market recovery losing momentum?

Patchy Distribution

Overall, the lockdown has been detrimental for the labour market and economy as a whole. In the September quarter, the Delta variant disrupted the ongoing recovery from the initial damage done by COVID-19. This was reflected heavily in the labour market data of earnings distributions.

Fewer lower paid workers were reported during August 2021 than before the pandemic. Over the month, the number of employed people earning less than A$1,000 per week fell by about half a million relative to pre-pandemic levels. The finding resembled the trend seen in August 2020, when lower paid jobs were hit adversely by the pandemic-induced restrictions. On the contrary, those earning above A$1,000 per week rose by 8 per cent between August 2019 and August 2021.

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Casual employment taking a breather

Casual employment, which depicts that part of the working population that is not entitled to sick leave and not considered as “permanent employees”, declined during August 2021. Much of this shift can be accrued to the loss of jobs in the hospitality sector, where part-time positions are generally available.

The shutdown of hospitality sector weighed heavily on casual jobs

During August 2021, 2.4 million employees were not entitled to paid leave, which made up for about 23 per cent of the total employee base. The percentage of casual staff was 23.6 per cent out of the total population in May 2021, while 24.1 per cent in February - almost a quarter of the total population.

In a nutshell, labour market statistics do not appear to be giving an ideal picture of the economic rebound, especially since the new Omicron variant cases are now on the rise. However, improvement can be expected as the economy gears up for a possible international reopening next year.

ALSO READ: Australia records low overseas travel in October, travel stocks slump

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