Boiling the workforce frog
What does workforce data reveal about the state of the nation? Stephen Gow, Open Advisory, explores the growth and evolution of the Australian workforce through recent periods of social and economic reform, and highlights key insights into where the Australian workforce (both current and future) is likely to be heading going forward.
Australia's economic performance has been the envy of many nations, and the year on year growth in GDP has already delivered Australia 26 years of uninterrupted economic growth.[1] Australia is the only country in the developed world with a period of uninterrupted economic growth that long, based on the definition that a recession requires two consecutive quarters of negative economic growth. In other words, all of the other 34 member countries in the Organisation for Economic Co-operation and Development (OECD) have experienced at least one period of two consecutive quarters of negative GDP growth since 1991.
This amazing performance over the past decades has been attributed to a range of factors including economic reforms, strategic location in the booming Asian region, and strong population growth.[2] This enabled it to withstand the Asian economic crisis of 1997/98, prospered through the US stock market bust and recession of 2001 and continued to grow through the Global Financial Crisis of 2008/09.
It is interesting to see how Australia’s workforce has changed and evolved during this time. Figure 1 illustrates the change in the number of employed persons by quarter since 1991. This graphic illustrates a number of key trends:
- The steady decline in the Manufacturing sector since 2008, from the largest sector comprising 14 per cent of employed persons in 1991, to 8 per cent of the workforce in 2017.
- Static Retail sector workforce since 2008.
- Variable growth in Construction, with periods of static (2008-2011) and high growth (2003-2008).
- The continued growth in Health Care and Social Assistance, so that it is now the sector with the highest employment, comprising 13 per cent of the total employed persons (1.6 million), up from 9 per cent in 1991.
Analysis of the index of employed persons in Figure 2 shows the relative growth within each sector from 1991. The standout in this graphic is the boom and bust of the Mining sector from 2005, and that the best relative performing sector is the Professional, Scientific and Technical Services.
Let’s focus Health Care and Social Assistance as it is the largest sector.
Drilling into the Health Care and Social Assistance sector also shows how the composition of this sector has also evolved (Figure 3). This sector was dominated by the Hospitals workforce comprising 42 per cent of the sector in 1991, but it is only 28 per cent in 2017.
The standout growth here is the rapid increase in the Medical and Other Health Care Services[3] and Social Services[4] workforces, now comprising 30 per cent and 27 per cent respectively, up from 22 per cent and 15 per cent. These are dramatic changes in a sector that has been dominated by the Hospital workforce for decades. The Hospital sector itself was subject to the sudden disruptive jolt of national Activity Based Funding and other reforms in 2011-2013.
The growth in these workforce groups are related to the demographic shifts associated with an ageing and growing population and increased availabilities of technologies. These are likely to be continued themes for the future.
So, what is to become of Australia?
What are the key jobs for the next decade and our children?
The recent discussions triggered by the ABC and others on population growth and Australia’s population policy directions have been valuable contributors to the public discourse.[5] [6] These debates often have a focus on the tsunami of ageing in the baby boomer generation, and the need for additional health, aged care, and social services workers. These are not the jobs that can be replaced by digitisation or automation.
So, what would one bet on as key jobs of the future? Health and social services seems like a sure bet. The forecast demographic shifts, lack of technological competition, and low reliance on exports makes this seem attractive.
As long as Federal and State Governments have sufficient taxation revenue to pay for it…
Figure 1: Employed persons by selected industry division from 1991-2017 (ABS 6291.0.55.003 Labour Force, Australia, Detailed, Quarterly)
Figure 2: Index of employed persons by selected industry division from 1991-2017 (ABS 6291.0.55.003 Labour Force, Australia, Detailed, Quarterly)
Figure 3: Employed persons by Industry sub-division of main job (Health Care and Social Services) 1991-2017 (ABS 6291.0.55.003 Labour Force, Australia, Detailed, Quarterly)
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About the author:
Stephen Gow is the founder and Managing Director of Open Advisory Pty Ltd which a specialist health system planning advisory service based in Melbourne. Open Advisory works with clients to explore system planning, workforce, and design questions, drawing from professional insights derived from extensive work across Australia and internationally. Stephen Gow can be contacted at stephen@openadvisory.com.au and followed on twitter at @gow_stephen.
References:
[1] ABS Vol. 5206.0 - Australian National Accounts: National Income, Expenditure and Product, Dec 2017
[2] OECD.Stat & , United Nations, Department of Economics and Social Affairs, Population Division, World Population Prospects, the 2015 Revisions
[3] Comprises general practice, medical specialists, pathology and diagnostic imaging, allied health, ambulance and other.
[4] Comprises child care, disability assistance, aged care assistance, welfare and other
[5] https://theconversation.com/australia-doesnt-have-a-population-policy-why-78183
[6] http://www.abc.net.au/4corners/big-australia:-are-we-ready/9547730