Post by NFA on Oct 16, 2020 19:29:20 GMT 8
Coronavirus: Those with the most to lose have suffered dearly
Adam Creighton 6:35PM October 15, 2020
It’s been a good pandemic for the bureaucracy, banking and wealth management, the most parasitic parts of the economy: same or more pay, work from home, and more colleagues with which to discuss the importance of lockdowns to “save lives”.
Since February millions have been shunted onto JobSeeker and JobKeeper, hundreds of thousands have left the job market altogether, but public administration and financial services have increased their headcount, the governor of the Reserve Bank pointed out on Thursday.
The hardest hit sectors have been those that produce things households and businesses actually want: construction, manufacturing, hospitality, arts and recreation, for instance.
Since February millions have been shunted onto JobSeeker and JobKeeper, hundreds of thousands have left the job market altogether, but public administration and financial services have increased their headcount, the governor of the Reserve Bank pointed out on Thursday.
The hardest hit sectors have been those that produce things households and businesses actually want: construction, manufacturing, hospitality, arts and recreation, for instance.
“All recessions are uneven but this one is especially so,” Philip Lowe said on Thursday in a speech that laid bare what he said was the “striking” contrast in pandemic experiences of low- and high-paid workers, small and large business, the young and the old.
The costs of the pandemic have fallen most heavily on the first of each of those groups: those with the least resources, and with the least influence in politics and media.
“The decline in employment has been largest for occupations with the lowest hourly earnings, while employment has actually increased for occupations with the highest hourly earnings,” Dr Lowe said. The top fifth of occupations ranked by hourly earnings — a class dominated by public sector and financial services — have grown in number, while the other 80 per cent of occupations have shed workers, and most starkly in the bottom 40 per cent.
By age, well over half of the lost jobs since February were held by the under-35s. Around 500,000 lost their jobs in the early stages and about 300,000 were still out of work in August.
Meanwhile, the group that makes most of the decisions in society, those aged 55 to 64, lost the fewest number of jobs, about 40,000.
The effect has been similar in the business world. Those with fewer than 200 workers had 7 per cent fewer staff in September compared to March, while big businesses, those with more than 200 staff, were only down 1 per cent.
The coronavirus, and our scorched-earth response to it, will prove to have been a blow torch to competition. JobKeeper, which is being paid to more than 900,000 businesses, has papered over the damage for now.
As the governor said, the economy is about to enter a period of “heightened structural change”.
Aggregate spending patterns will change in response to new ways of working, a new, top-heavy distribution of income, and the realisation that another pandemic will totally up-end economies for months.
On the other side will be an economy more dominated by government, bureaucracy, ticket clipping, and oligopolies, far from the free-market economy politicians spruik and many voters will believe exists.
The costs of the pandemic have fallen most heavily on the first of each of those groups: those with the least resources, and with the least influence in politics and media.
“The decline in employment has been largest for occupations with the lowest hourly earnings, while employment has actually increased for occupations with the highest hourly earnings,” Dr Lowe said. The top fifth of occupations ranked by hourly earnings — a class dominated by public sector and financial services — have grown in number, while the other 80 per cent of occupations have shed workers, and most starkly in the bottom 40 per cent.
By age, well over half of the lost jobs since February were held by the under-35s. Around 500,000 lost their jobs in the early stages and about 300,000 were still out of work in August.
Meanwhile, the group that makes most of the decisions in society, those aged 55 to 64, lost the fewest number of jobs, about 40,000.
The effect has been similar in the business world. Those with fewer than 200 workers had 7 per cent fewer staff in September compared to March, while big businesses, those with more than 200 staff, were only down 1 per cent.
The coronavirus, and our scorched-earth response to it, will prove to have been a blow torch to competition. JobKeeper, which is being paid to more than 900,000 businesses, has papered over the damage for now.
As the governor said, the economy is about to enter a period of “heightened structural change”.
Aggregate spending patterns will change in response to new ways of working, a new, top-heavy distribution of income, and the realisation that another pandemic will totally up-end economies for months.
On the other side will be an economy more dominated by government, bureaucracy, ticket clipping, and oligopolies, far from the free-market economy politicians spruik and many voters will believe exists.
The comments are worth reading as well