The shape of the Australian labour market has changed significantly over recent decades.

We can see the impact of these changes in both the types of jobs and the mix of industries across the economy. There has been strong growth in higher-skill level jobs, non-routine jobs and services jobs, and growing use of automation.

At the same time there have been other big structural changes such as a decline in manufacturing. Overall, the labour market weathered the impacts of these big picture forces and changes well.

Female employment and participation have grown strongly and, in response to jobs having higher skills needs, young people are spending longer in education.

Over the past several decades, structural change in the economy, together with a number of economic shocks, have changed the shape of our labour market.

Australia entered the COVID-19 pandemic with a low unemployment rate and strong employment growth. In the three years to February 2020, the number of people employed increased at an average annual rate of 2.5%, while the unemployment rate was 5.1% just before the onset of the COVID-19 pandemic.

Australia entered the COVID-19 pandemic with a low unemployment rate

Source: ABS, Labour force, Australia, seasonally adjusted.

The COVID-19 pandemic initially had a significant, negative impact on the Australian labour market. Employment fell much more quickly and dramatically than in any previous recession.

There were also other impacts such as the effects of closed borders, changes and disruptions to supply chains and shifts in consumer spending.

Jobs have bounced back strongly. In fact, the June 2021 labour force figures from the Australian Bureau of Statistics showed that employment had continued to increase and has been above pre-pandemic levels since March 2021.

That said, the risk of ongoing outbreaks over the months ahead presents a high degree of uncertainty.

When it comes to broader structural changes, it appears that the largest impact of COVID-19 might be to accelerate those that were already underway. These include increasing activity online and the need for post-secondary qualifications.

The increase in jobs since the pandemic has mostly been in those that typically require a bachelor degree or higher

Source: ABS, Labour force, Australia, detailed, seasonally adjusted by NSC

Note: The Employment Index base is February 2020.