Comparing US and Australian jobs data

Stephen Koukoulas in A Striking Contrast: Australian and US Jobs Data compares jobs data from the USA and Australia:

In the latest data released Friday, the US labour force was 154.707 million people and of those, were 8.2% or 12.673 million people were unemployed.  The workforce participation rate was 63.8%.

Australia has a labour force of 12.076 million people, the unemployment rate is 5.2% or 632,000 people and the workforce participation rate is 65.2%.

He notes that:

If the US had Australia’s participation and unemployment rates; there would be an extra 3.47 million people in the labour force: the number of people unemployed would be 4.45 million people lower and the level of employment would be around 7.9 million people higher.

He goes on:

There are many issues that fall out from this contrast.  Here are a few.

Most importantly is the importance of economic growth.  Keep growing the economy and employment will remain resilient.  The stimulus during the GFC in Australia worked a treat, it kept the economy growing and supported employment.

Also important is a smashing of the notion of the benefits of US style labour market flexibility.  To be sure, the US labour market has more flexibility than in Australia,  much more, but look at the cost.  Flexibility to sack people and cut wages delivers flexibility to default on mortgages, to stop spending and to undermine productivity.  There is also a paper in the offing for those wanting to look at the “dreadfully inefficient, high cost” German workforce and compare it with the US at the moment.