The facts about job vacancies

One of the many surprise policies announced in the federal government's 2014-15 Budget was a big change to the way income support is paid to young people. Under the proposed changes, unemployed persons under the age of 30 years will have to wait six months before they can access the Newstart payment. The underlying logic to this policy is that there are plenty of jobs out there, if only young people are willing to take them. The jobs may not be in their industry of choice, or even in their local area, but if we refuse them income support, they will be more motivated to get back into work.

How well does this argument stack up?

The ABS released job vacancy numbers on Thursday and they show some promising signs. As shown below, vacancies are up around 7,000 jobs since six months ago. But, at 147,100 vacancies, we're still well below a peak of 191,300 just a little over three years ago.

Job vacancies

But when we introduce the number of unemployed to the scenario, we see both that the number of vacancies is dwarfed by the number of unemployed, and that the recent growth in vacancies is nothing compared to the rise of job-seekers. At May 2014 there are more than 700,000 job seekers and only 147,000 vacant jobs.

Job vacancies and job-seekers

The idea that young people can just waltz into a job in a cafe or retail outlet is ridiculous, when you consider how many people are competing for these jobs. The graph below shows how few jobs there are to go around in each industry. Just look, for example, at how few jobs there are in retail and food services, compared with the total number of unemployed persons.

Job vacancies and job-seekers by industry (May 2014)

There have been some interesting changes, too, in the distribution of vacant jobs from state to state. NSW has powered on from last year's dip. Over the same time, Queensland, WA and Victoria have dived, and dived hard.

Job vacancies by state and territory ('000)

The drop in Queensland and WA could be attributable in large part to the declining number of jobs being offered in mining. The graph below is a bit of a tangle of lines, but it shows some interesting movements in various selected industries. Mining has provided the most consistent trend: up, up, up until the end of 2011 (10,000 vacancies in November), and then down, down, down (just over 4,000 jobs free). It's no longer providing the extra jobs that the economies of the mining states need.

Job vacancies by industry ('000)