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Low wages growth means work is nice if you can get it (twice)

Greg Jericho
‘Are we seeing growth in people getting jobs, or more people having to work multiple lower-paid jobs?’ Photograph: Fiona Jackson-Downes/Getty Images/Cultura RF

New data from the Bureau of Statistics reveals just how drastically over the past seven years we have shifted towards white-collar and service-sector jobs and also how much of the surge in new jobs last year was due to a big uptake in workers taking a second job.

The labour force figures are often touted as recording the number of “jobs”, whereas in reality they count the number of employed. There are actually more jobs than employed people because some people work more than one job. This discrepancy is also a problem for the ABS because while its labour force figures come from a survey of people, much of its information about jobs – such as job vacancies – comes from surveying businesses.

The ABS has been trying to marry-up the data. Last year it released its first annual labour account data, and this week it has now released the first of the quarterly series of the data.

The hope is to have the quarterly labour account figures be released in line with the quarterly national account GDP figures. This would mean data on the labour side of the economy would be nicely joined with that of the production and consumption side.

And this is important because, while the monthly labour force figures provide a great deal of information, they don’t tell us everything about how people are working. One key measure that this new data shows is the growing number of people holding a second job.

Over the seven years from September 2010 to September 2017, the number of people working has risen by 11.1%, but the number of people working in secondary jobs has risen by 13.8%.

In the 12 months to September last year, secondary jobs grew by 7% compared with 2.8% growth in “main jobs”:

The growth of secondary jobs accounted for 15% of all new jobs in that 12-month period – which is a stunning amount, given even with this surge, only 7% of employees work more than one job.

But that current level is well up from the recent low of 6.6% at the end of 2016:

While the current figures are not too alarming, the increase in secondary jobs in the recent past does fit within the narrative of flat household incomes, low wages growth and rising underemployment.

The only reason you work a second job is because your main job is not paying enough money, either due to a low base rate of pay or too few hours. The big growth in people taking a second job suggests the below-inflation wage growth is having an impact and forcing people to get a second job to make ends meet.

The split of jobs into main and secondary also highlights the quality of job growth across industries.

In the 12 months to September last year, real estate services, and the information media and technology industries, saw a decline in the number of main jobs but a surge in the number of secondary jobs.

Similarly, 92% of the new jobs in the administration and support industry were secondary jobs.

This last point is not too surprising because the administration and support industry is the main source of secondary jobs. It only accounts for 5.1% of all main jobs in the economy, but a stunning 20% of all secondary jobs:

The figures also highlight the shift in the nature of our work.

In 2010, construction and manufacturing were the third and fourth most common industries for jobs. Now they rank sixth and seventh, having been overtaken by three services industries – accommodation and food services, professionals, scientific and technology, and education:

The shift from blue-collar to white-collar work and also to the services sector is seen most starkly when we compare the number of jobs in manufacturing and in the professional, scientific and technology, and accommodation and food services industries.

Seven years ago the number of jobs in all three industries was roughly the same. Now there are more than 1.1m jobs for people working in accommodation and foods services and in professions such as architecture, engineering, computer systems design, law and accountancy. By contrast, the number of jobs in manufacturing has fallen to 870,000:

And this also highlights the problems of the changing economy.

Unsurprisingly, given the level of expertise required to be an engineer or lawyer, the average income of workers in those industries are higher than in manufacturing – an average income per hour of $55.80, compared with $43.60. So in that regard the shift from manufacturing to white-collar work would appear to be a general good for the economy – as people are on average moving to higher-paying work.

But while the white-collar jobs may pay more, the jobs in the accommodation and food services sector do not. In September 2016, the average hourly rate of income for those workers was just $23.00.

It reflects why, even though in the 12 months to September 2017 the average hourly income for workers in the professional, scientific and technology industry rose 2.8%, the average hourly income for all jobs actually fell 0.2% from $45.19 to $45.08 – workers overall were shifting from higher-paying jobs to lower-paying ones:

This new data from the Bureau of Statistics will certainly become a valuable source of information for policymakers. Over the past few years the rise of underemployment has become a key issue, but this new series of data will also allow us to chart where the new jobs are going, and whether what we’re seeing is a growth of people getting jobs, or more people having to work multiple jobs in lower-paying industries in order to pay the bills.

• Greg Jericho is a Guardian Australia columnist