A strange note from the Australian job market. “The jobless rate has fallen to a fresh 33-year low of 4.2 per cent, stoking fears of an interest rate rise next month,” reports the Australian. “In a sign of an economy working at full tilt, the number of jobs increased by 13,000 in September. A fall in full time employment of 17,200 was offset by a surge in part time jobs of 30,100.”
It’s not strange that the economy is running at full tilt. What is strange is that full-time employment fell while part time employment soared. Hmm. An anomaly? Or a structural shift in the job market where you have greater flexibility to move and improve your salary, but less lifetime employment security?
That’s globalisation for your, more choice but less certainty. It’s hitting Western workforces particularly hard. For years we’ve been used to high wages and little competition. Now it’s the opposite: low wages and fierce competition.
Our prediction: the forced flexibility is inevitable. You can’t lock in high wages these days by protecting certain markets. If you try, whole sectors of your economy will simply vanish offshore where labour is cheaper. Employees will have more flexibility…but slower real growth in wages…and higher growth in prescription medications for anxiety and depression.
Markets and Money