There would have been twice as many job losses over the first half of 2020 without the JobKeeper scheme, the Reserve Bank has found.
A discussion report, authored by Reserve Bank of Australia economists James Bishop and Iris Day, looked at the impact of the JobKeeper payment between March 30 and September 27, and concluded that one in five recipients would not have remained employed without the scheme.
The Reserve Bank identified that JobKeeeper reduced total employment losses by at least 700,000 between April and July. During this period, around 3.5 million workers across more than 900,000 businesses were recipients of the scheme.
The authors of the report say that JobKeeper “undoubtedly played a crucial role in cushioning the decline in employment and incomes over the first half of 2020” and the scheme is “one of the largest labour market interventions in Australia’s history”.
The Reserve Bank estimated that receiving JobKeeper increased an employee’s chances of staying employed by about 20 per cent.
The report suggests each employee-employer relationship saved by JobKeeper cost $100,000 over the initial six-month period, which was compared favourably to wage subsidy schemes in other countries. For example, the PPP in the United States has been estimated to cost $224,000 per job saved. The report said this may have been because JobKeeper was more tightly targeted than other schemes.
“We do not consider the employment effects from August onward (including JobKeeper 2.0), or the effectiveness of the program in alleviating the longer-run effects of labour market scarring,” the report said.
“Policymakers should not assume that the short-term effects of the scheme will necessarily persist.”
JobKeeper was the largest single measure of the federal government’s COVID-19 stimulus package. In the initial six month period the scheme, the wage subsidy was paid at a flat rate of $1500 per fortnight for each eligible worker. In September, the JobKeeper payment was tapered down to $1100 per fortnight, and is currently set to end in March 2021.
In September, an independent report from the Parliamentary Budget Office found that between March and June this year, more women than men experienced job losses, with many women leaving the workforce altogether.
“While the increases in JobSeeker recipient numbers since COVID-19 are higher for men than women, data on job losses shows higher losses for women between March and June, and more women leaving the labour force altogether, in part reflecting higher concentration of women in the industries most affected by the early stages of COVID-19 restrictions,” the report said.