Employers cutting hours, not staff

Employers are reluctant to let staff go, with the struggle of finding suitable
workers during the recent skills crisis still firmly etched in their memories.
Official jobs data released on Thursday shows bosses are leaning towards cutting
work hours rather than turfing staff onto the dole queue in reaction to the economic
downturn.
The jobless rate returned to a five-year high of 5.7 per cent in May - a level last
seen in March - after the surprise fall in April.
The April outcome was revised up to 5.5 per cent from 5.4 per cent.
"While the trend in the unemployment rate overall is up, looking through the monthly
gyrations over the past two reports, the employment market is far from carnage at
the moment," National Australia Bank senior economist David de Garis said.
The total number of people employed fell by a slim, seasonally adjusted 1,700 in May
when economists were looking for a hefty 30,000 decline.
A 26,200 fall in full-time workers was all but offset by a 24,500 rise in part-time
workers.
"We have come off a period of marked skill shortages, so there is definitely a
reluctance on the behalf of employers to make reductions in overall staffing
levels," Australian Chamber of Commerce and Industry acting chief executive Greg
Evans told reporters in Canberra.
Mr de Garis said job creation had slowed to nil in the past year, but a move towards
fewer hours had seen part-time employment grow at an annual rate of three per cent,
while full-timers are down 0.7 per cent.
"While the leads and lags between the slowdown in the economy and its impact on the
employment market can be quite variable, these data continue to suggest that there
is labour hoarding going on," he said.
Prime Minister Kevin Rudd said the figures would have been far worse had it not been
for the government's stimulus packages.
"Without our nation building plans, over 200,000 more Australians would be out of
work," Mr Rudd told delegates at an Australian Industry Group lunch in Sydney.
But opposition treasury spokesman Joe Hockey said such suggestions were "absurd".
"Disappointingly, the level of unemployment continues to trend up and the prime
minister and treasurer were way too early in proclaiming mission accomplished when
they said that Australia was not in recession," Mr Hockey told Sky News.
"The suggestion that the unemployment rate, if not for those stimulus packages,
would today be nearly eight per cent is absurd."
Deputy Prime Minister Julia Gillard said Australia's job market was not immune from
the recession hitting workers right around the globe.
"For Australians hit by recession, we will be standing with them. We want to stand
shoulder to shoulder with them," Ms Gillard, who also holds the employment
portfolio, told reporters in Sydney.
"We are strongly positioned compared to other countries. We've acted here to cushion
Australia from the full effects."
She said earlier this week that she was sticking with the government's forecasts in
the May budget, which estimated an unemployment rate of 8.25 per cent by mid-2010.
Queensland saw the biggest percentage point jump in May, rising to 5.3 per cent from
4.9 per cent the previous month.
Queensland Treasurer Andrew Fraser said the figures were sobering, being above five
per cent for the first time since 2004.
"This will get worse before it gets better and we expect the unemployment rate will
only move higher, not only this year but in the year ahead after that," he said.
NSW has the highest rate in the country, rising to 6.4 per cent from 6.1 per cent.
"I'm concerned about every job loss, whether it's in NSW or the rest of Australia,"
NSW Premier Nathan Rees told reporters.
"Clearly, as the prime minister said, we are not out of the woods yet."