What does the LNP pledge for 209,000 extra jobs actually mean?

Once again we see a State political party making claims regarding the number of jobs to be created. The LNP have today announced their “Jobs for Tomorrow” plan which pledges that “More than 209,000 jobs would be created in Queensland over the next six years”. The irony here is that job creation, on the broad scale, has very little to do with anything that a State government can do. You might think, having previously pledged to bring down the State’s unemployment level from 5.5% to 4% and then seeing it increase to sit at 6.9% currently, that the LNP would be more wary about these kind of promises; apparently not.

But what does an extra 209,000 jobs in six years actually mean? Considering the absolute number of jobs in isolation tells us almost nothing about the state of the labour market. In the six years to November 2014 (out latest available data) the working population in Queensland increased by 349,100 people. A sharp fall in the Participation Rate over those years saw the labour force increase by just 155,000. But even that slower growth in the labour force was not matched by employment, which increased by just 119,200; hence the increase in the unemployment rate from 5.8% to 6.9% (all these figures relate to the ABS Trend series for Queensland).

The LNP have been wise enough (having been badly burnt previously) not to make promises about the unemployment rate. However, this pledge to create 209,000 new jobs over 6 years means little as we know nothing about what will happen to the size of the labour force over those six years. Given the sharp decline in the Participation Rate it would seem reasonable to assume that we might see some reversal in that trend. An increase (even a relatively modest increase) in the Participation Rate, combined with ongoing growth in the size of the working age population, could easily see 209,000 new jobs have no downward impact on the unemployment rate.

As an example, if we assume the rate of growth of the working age population continues at about the same rate as over the past 6 years then we would see an extra 350,000 Queenslanders of working age by 2021. If the Participation Rate was to increase by just 0.5 (only a quarter of the decline we saw in the past 6 years) then the labour force would increase by 250,000. In that case 209,000 new jobs would still see the unemployment rate increase to about 7.7%!

The initiatives that the LNP are announcing in their Jobs for Tomorrow plan are certainly to be welcomed but let’s not be fooled by ridiculous claims of the number of new jobs which in reality mean nothing.

UPDATE: Gene Tunny over at Queensland Economy Watch has also posted on the 209,000 target. He points out that this is a very achievable target and indeed is “slightly more conservative than Treasury forecasts would suggest it needs to be”. He also includes an interesting chart which demonstrates that creating 209,000 new jobs in a 6 year period is actually a very weak target indeed (particularly given that population growth over time makes such a target ever more tiny).



  1. Gene Tunny says:

    January 19th, 2015 at 4:22 am

    Pete, given exponential growth of population I expect the situation is even worse, with 15+ population growing by around 500,000 in the next six years according to the official Qld Govt projections.

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