Analysis: Why ABS’ Weekly Payrolls Data May Have Overstated Employment Fall

• Published on
• 24 Apr 2020, 09:06 AM

By Sophia Rodrigues

Australia’s first weekly payrolls and jobs data may have overstated the fall in employment because the decline in jobs and wages doesn’t necessarily translate to the same drop in employed workers.

So, it would be incorrect to say that the 6% fall in jobs between the period March 14 and April 4 is equivalent to a loss of around 780,000 employment when measured in terms of the monthly labor force survey.

The payrolls data, published by the Australian Bureau of Statistics on Tuesday, showed a 6% fall in jobs between the period March 14 and April 4, and a 6.7% decline in total wages.

The data is an experimental weekly estimate of the impact of coronavirus on jobs and wages, and is sourced from the Australian Tax Office’s Single Touch Payroll data. As such, the data is initiated from an Australian employer and counts jobs because it is based on payments they make.

The monthly labor force data published by the ABS, on the other hand, is based on survey and counts number of workers.

THREE KEY POINTS TO CONSIDER

Because the payrolls data is based on employer payments, if a person holds two jobs it will count as payment to two jobs or loss of two jobs.

The data showed the biggest job losses were in accommodation and food services, and arts and recreation services. Both these industries typically have a bigger proportion of casual and part-time jobs, with many working with multiple employers.

These industries are also more likely to have workers in the age groups of under-20 and 20-29.

So, it is possible that the 9.9% decline in jobs for aged under 20, and the 8% fall in jobs for 20-29 year olds is overstated.

The decline in jobs could also be overstated due to another reason. Many casual employees were stood down immediately in businesses that could no longer operate due to restrictions imposed on them.

There would be some, if not many, among them who are now eligible for payment under the government’s Jobkeeper policy but their employers haven’t made the payments yet due to delays in getting their eligibility confirmed with the ATO.

Such workers are likely to be have got paid after April 4, and many of those could get paid more than their average income because of the A$1,500 flat fortnightly payment. This would make a positive contribution to jobs and likely a bigger contribution to wages.

Another reason why the payrolls data and the monthly labor force survey are not directly comparable is that the payrolls data only captures payments to employees and not contractors. The labor force data, on the other hand, is based on work and hence also captures people working as contractors.

--Contact: sophia@centralbankintel.com

(To avoid any misunderstanding, this article is not a criticism of the ABS’ data. It is purely meant to convey the limitations of any data and to inform how it should be interpreted, and is certainly not undermining the great work done by the ABS)