The surprising workforce trend few people are talking about

Employment figures are always closely watched by politicians and economists and reported widely in the media as a benchmark of economic performance.

But what the reported figures don’t include is the number of people who are unemployed but not looking for work, including full-time students, stay-at-home parents and full-time carers.

The current workforce participation rate is Australia is 60.5 per cent for women, and 70.9 per cent for men[1].

Not surprisingly, the participation rate for women has steadily increased in the past 50 years, as more women join the paid workforce and/or return to it after having children.

However, the workforce has undergone another trend in recent times with the number of males participating falling.

Australia is not alone in this trend, as N. Gregory Mankiw recently reported in The New York Times.

“Among women, the share out of the labour force has fallen from 66 per cent in 1950 to 43 per cent today. That is not surprising in light of changing social norms and the greater career opportunities now open to women,” Mankiw reports.

“Men, however, exhibit the opposite long-term trend. In 1950, 14% of men were out of the labour force. Today, that figure stands at 31%.

“In 1950, only four per cent of prime-age men were not working or looking for work. Today, that figure is 11 per cent.”

Here in Australia, the Reserve Bank of Australia has also taken note of the same trend, noting in a 2013 report that “in the construction sector, there has been a sharp decline in self-employed workers, equivalent to over half of the peak-to-trough fall in employment in the industry. It is possible that some of these workers may not be recorded as actively seeking work, and hence they may not be counted in the labour force. To the extent that this is the case, it may help to explain the relatively large decline in the participation rate of male workers over the past couple of years.”

In 2017 the Institute of Public Affairs released a report by Research Fellow Gideon Rozner examining this phenomenon. In researching the cause for the decrease in male participation in the workforce Rozner did not determine any strong links to economic or social causes.

“There is little evidence that falling male work rates are caused by changes in the labour market, nor societal changes, such as increased enrolments in tertiary education or males taking on a greater share of unpaid domestic and childcare responsibilities,” Rozner is quoted as saying.

“Alarmingly, the growth in joblessness has a strong correlation with the expansion of welfare entitlements during the same period, particularly the disability support pension.”

So, what can businesses do to help arrest this trend and encourage men back into the workforce? According to WCA Solutions’ Principal Heather Warner, workplace training is a key element.

“If you look at all the information on this trend we can conclude at least a part of it is caused by automation affecting jobs traditionally held by men,” Heather said.

“Technological advances are impacting on certain jobs. Rather than re-training or upskilling men are then relying on the welfare system to get by.”

Heather urges business owners and managers to keep close watch on how technology and automation will continue to impact workplaces, and to invest in professional development and training for their staff.

“We have seen media reports just recently of the skills shortages in many industries,” she said.

“Automation has impacted on many jobs, but often it is only one component of a role that is affected – human resources are still required to operate, manage and oversee the machinery.

“This is where employers need to ensure they are training up their current staff to take on those roles, rather than allowing them to fall through the cracks and out of the workforce.”

For more information on workplace training and tips on upskilling your staff contact WCA Solutions on 08 9383 3293, email us at admin@wcasolutions.com.

 

[1] https://www.wgea.gov.au/sites/default/files/Stats_at_a_Glance.pdf