Fact check: Were 301,000 jobs created in 2015?

Updated

The claim

"I mean we've created 300,000 — 301,000 new jobs in Australia last year," Prime Minister Malcolm Turnbull said on Radio 3AW in January.

Were over 300,000 jobs created in Australia in 2015? ABC Fact Check investigates.

The verdict

Yes, Mr Turnbull's numbers are correct, but there's more to it.

Seasonally adjusted data from the Australian Bureau of Statistics Labour Force survey shows that the number of employed people did indeed increase by 301,300 between December 2014 and December 2015, whilst trend data showed a rise of 312,100.

Experts contacted by Fact Check say the Labour Force survey is a net figure — the number of newly employed people minus the newly unemployed — and the number Mr Turnbull used does not distinguish between full-time and part-time jobs, but they agreed that the survey was the best source of data to measure jobs growth.

Other indicators such as the employment to population ratio, participation rate and unemployment rate reveal more about the health of the job market than the raw numbers of jobs — and they indicate a strengthening trend.

Mr Turnbull's use of the word "we" could be read as crediting the Government with creating the jobs. Alternatively, it could be read as the jobs "we in Australia" — in other words all those involved in the economy — created in 2015.

Experts said that politicians have long used figures from the Labour Force survey to spruik their economic credentials, but quantifying the number of jobs created by the Government is difficult due to the substantial role of external factors involved.

The basis for the claim

Mr Turnbull's office told Fact Check his claim was based on the Australian Bureau of Statistics Labour Force survey.

As discussed in a previous fact check, this survey measures people not jobs, and some people have more than one job.

The ABS uses seasonally adjusted and trend numbers, which Fact Check has discussed in a another fact check relating to jobs.

The Labour Force survey's seasonally adjusted numbers show that in December 2014, 11,601,000 people were employed, whereas in December 2015, 11,902,300 people were employed, an increase of 301,300.

The trend estimates for December 2014 show that the number of employed people in Australia was 11,581,700. This rose to 11,893,800 in December 2015, a slightly higher increase of 312,100 jobs.

Net jobs growth

Garry Barrett, an economist at the University of Sydney, told Fact Check that whilst the survey was the best source to measure Mr Turnbull's claim, his use of the employment numbers is not without its pitfalls.

"These numbers are based simply on whether a person is in employment. It is possible that the net job growth has been with casual or part-time work (possibly replacing full-time jobs) — so it is possible that total hours employed in the economy has not been as great," Professor Barrett said.

The Labour Force survey shows that there was growth in both full-time and part-time employment over 2015, but the growth in part-time was higher.

There was also an increase in hours worked per month for those employed both full-time and part-time.

Mark Wooden, Professorial Research Fellow and Director of the Household Income and Labour Dynamics in Australia (HILDA) survey told Fact Check that the labour force numbers represent net employment growth, that is, the number of 'jobs' created minus the number lost.

"Total jobs 'created' however is much greater than this. This is because as new jobs appear, others disappear. So gross jobs growth is much, much, much larger than net jobs growth," he said.

Raw numbers

Professor Barrett said that the raw jobs numbers reflect "the demand from firms to employ people, so it's about the vacancies they have and wanting to fill these roles. So that's reflecting strength in labour demand".

He said that the number of raw jobs increase by a certain amount as the economy and population grow, and that the Government wouldn't be responsible for the large majority of the growth in these numbers.

The ABS survey shows that in 2015, both the rate of people participating in the labour force and the ratio of employed people to the total population improved.

"The general trend over the last decade or so is less early retirement, people working longer, with improved nutrition and health care, people's working lives are being extended as well. So all these factors lead to higher participation rates, higher employment to population ratios," he told Fact Check.

Professor Wooden told Fact Check that there are other factors to consider in tandem with the raw jobs numbers when assessing the strength of the labour market.

"If employment grew by 300,000 and labour force grew by say 400,000 that would suggest things are not good at all. So number of jobs per se tells us little about labour market conditions. However, employment is growing while unemployment is falling ... so that everything is moving in the right direction," he said.

Professor Wooden said that the employment to population ratio was a more revealing statistic than the raw number of jobs created, but that using a use of raw figures in political rhetoric tends to have a greater impact on the public, which is why they are regularly used by politicians to spruik their economic credentials.

"Saying we created X,000 jobs has much more weight," he said.

The Government's role in job creation

Government ministers have used different phrasing when describing the Government's role in the generation of over 300,000 jobs in 2015.

Mr Turnbull's use of the word "we" in his 3AW interview could be read as the crediting the Government with creating the jobs. Alternatively, it could be read as the jobs "we in Australia" - in other words all those involved in the economy - created in 2015.

A few days later he put it differently: "Last year Australia generated 301,000 new jobs," he said in Question Time on February 2.

Minister for Employment Michaelia Cash repeated the claim in a similar manner on Sky News on February 16: "People are aware that under this Government you have seen in excess, in the last 12 months, 301,000 jobs created."

But in the same interview, she implied that the Government was somehow responsible for creating these jobs: "And as I said, this is a Government that has created, in 12 months, 301,000 jobs."

Experts contacted by Fact Check were keen to highlight that the Government's role in job creation is hard to quantify.

"The notion that the Government creates many jobs that you can easily quantify is rare, unless you've got something really clear like a job creation program," Professor Wooden said.

Economic advisory panel A panel of experts has agreed to advise ABC Fact Check for its work on economic issues.

For this fact check, the full panel was consulted.

Meet the full panel

"It's a very, very grey area. Every prime minister, every minister for employment, every treasurer going back decades makes exactly the same claim. It's a standard thing to say, that because employment is increasing, we 'created' it ... But it's always been ludicrous to think that government creates all these jobs ... if they created all of these jobs, did they destroy all those other jobs?"

Professor Barrett said that "on the flip side — when employment growth slows down (or there is a decline) governments of all persuasions quickly point to economic forces out of their control (high oil prices, falling commodity prices, US recession, China slowdown, high exchange rate)."

He said it was a "stretch" to say the Government created all those jobs and that it doesn't create jobs outside of the public sector in the sense of directly employing workers.

But he said spending by the Rudd government to boost aggregate demand during the global financial crisis was an example of where government policy might influence the number of people employed.

Professor Wooden said that it was not outrageous for a government to suggest that it "created the conditions that fostered economic growth".

But he also said that even the policies of previous governments can play a role in today's job creation.

"No one can really say we created X number of jobs, but they all do," he said.

"It's bordering on laughable, but the reason it's not laughable is that they say it all the time and everyone accepts it and it really doesn't raise any eyebrows."

Sources

Topics: unemployment, economic-trends, turnbull-malcolm, liberals, australia

First posted