Fact check: Have 100,000 new jobs been created this year?

Updated

The Abbott Government celebrated one year since the election on September 7, 2014.

In a message on the Liberal Party's YouTube channel Prime Minister Tony Abbott listed the Government's achievements from the first year of its first term. Among other things, he said: "Over 100,000 new jobs have been created since the end of last year."

ABC Fact Check takes a look at job creation under the Abbott Government.

The claim: Tony Abbott says over 100,000 new jobs have been created since the end of last year.

Tony Abbott says over 100,000 new jobs have been created since the end of last year. The verdict: According to the July ABS Labour Force survey, the number of people employed full-time and part-time between December 2013 and July 2014 rose by 109,300.

Employment figures

Fact Check asked the Prime Minister's office for the basis for Mr Abbott's claim and a spokeswoman pointed to the Australian Bureau of Statistics seasonally adjusted monthly Labour Force data.

It showed that in December 2013 there were 11,467,300 people employed, both full-time and part-time. In July 2014 there were 11,576,600 people employed. That's 109,300 more people employed at the end of July 2014 than the end of December 2013.

The seasonally adjusted unemployment rate in July 2014 was 6.4 per cent, up from 5.9 per cent in December 2013.

The trend estimates for the same period - which the ABS says "reduce the impact of the irregular component of the seasonally adjusted series and can provide a better basis for analysing the underlying behaviour of the series" - showed a similar result, recording an increase of 93,000 people employed between December 2013 and July 2014.

August Labour Force survey

Since Mr Abbott made his claim, the Labour Force survey for August was released. It indicated a sharp spike in people employed, showing an additional 121,000 in the seasonally adjusted figures for the month.

It also revised previous data, and concluded that between December 2013 and July 2014 the seasonally adjusted increase in employed persons was 115,500.

The revised trend estimates are again similar, showing 132,400 more employed people in July than December.

For the purposes of this fact check, the figures from the July Labour Force survey are the relevant ones, as Mr Abbott did not have access to the August figures when he made his claim.

People employed versus jobs created

Using the Labour Force survey to determine job creation is not ideal. In a paper on job creation published in February 2013, the ABS says the Labour Force survey does not measure job creation.

"The LFS provides regular estimates of the number of employed people at a point in time. However, these estimates are often misrepresented as the number of jobs. The LFS estimates do not provide a measure of the number of jobs, they provide a measure of the number of people who are employed (the number of people who have a job)," the ABS says.

Economist William Mitchell, from the University of Newcastle's Centre of Full Employment and Equity, tells Fact Check that "the reality is that there were many more jobs created than the Labour Force survey indicates – the so-called gross flows measure all the jobs created and destroyed over a period".

"The difference between, say, the December 2013 and July 2014 Labour Force numbers are just the net result," Professor Mitchell said.

He says employment growth has been less than population growth, which is why the unemployment rate is up even though more people are employed.

Economist Saul Eslake says the Labour Force survey is the best way available to track job creation.

But he agrees there's no way to tell from the Labour Force data exactly how many jobs were created, or how many were lost, over any given period.

"Strictly speaking it could be that, for example, 250,000 new jobs have been created and just over 110,000 existing ones lost," he said.

Fact Check asked the ABS about the relationship between jobs and people in March 2014 and Labour Force Survey manager Richard Arnett said the Labour Force survey was the best available data, and that there would be a close correlation between the two.

Economic advisory panel This piece was reviewed by three members of Fact Check's economic advisory panel, Professor Warwick McKibbin, Bernie Fraser and Chris Richardson.

Meet the panel here.

The verdict

The Labour Force survey doesn't actually measure job creation, but the experts Fact Check contacted say it is the best indication available.

According to the July survey which Mr Abbott based his claim on, the number of people employed between December 2013 and July 2014 rose by 109,300.

Mr Abbott cannot know from the Labour Force survey how many jobs were created over that period but the economists Fact Check spoke to estimate that it could be many more than 100,000. So the Prime Minister's claim that 100,000 new jobs have been created since the end of last year checks out.

Sources

Topics: federal-government, liberals, work, business-economics-and-finance, abbott-tony, australia

First posted