Without foreign students and workers, retail sector calls for pensioners to fill staffing gaps

Without foreign students and workers, retail sector calls for pensioners to fill staffing gaps

Photo: Kraken Images, via Unsplash

The Australian Retailers Association (ARA) has called on new government policy to unlock pensioner participation in a sector that is facing its tightest labour market in half a century, exacerbated by a lower inflow of international students and working holiday makers.

The peak retail body is supporting calls to allow employment income to be exempt from the Age Pension income test, which would help pensioners supplement their incomes and alleviate longstanding staff shortages.

ARA CEO Paul Zahra says there are now more than 29,000 job vacancies in the retail industry nationwide.

"We are in the tightest labour market in more than 50 years and without the usual numbers of overseas workers and students, these gaps won’t be filled using traditional recruitment methods," Zahra says.

"Retail has always been a powerfully diverse employment sector and we need to think more creatively about how we can mobilise new segments of our Australian workforce such as mature age workers and pensioners.

"We would like to see this as a priority for the Federal government immediately following the election. Should the new government enact this considered change, a new workforce of pensioners can be unlocked and able to choose work that suits them in an economy that desperately needs their efforts."

Zahra claims there can not be an economic recovery without a retail recovery, emphasising skills shortages along with supply chain challenges are enormous constraints on the industry.

"Retailers have been consistent in their calls for a solution to the current labour shortages of international students and other visa holders in the country, formerly key demographics of the retail workforce," he says.

"To this point, no broad solutions have been suggested, leaving a significant gap in productivity and growth for an already stressed workforce.

"Making changes that exempt employment income from the Age Pension income test going forward would benefit everyone in our economy."

He also notes such a scheme would empower a demographic that would thus be mobilised to spend in light of newfound employment opportunities, in addition to aspects of social duty.

"Additionally, those on the aged pension are interested in returning to work from a sense of social duty and responsibility as well. They are a group critical to the fabric of our communities, and this generous sense of social duty should be freely welcomed, rather than significantly constrained by mechanisms such as the Aged Pension income test," he explains.

"We already have existing training programs that would support these individuals to quickly mobilise their skills into frontline retail positions, and with the commitment of many of Australia’s largest retail employers to prioritise this training and employment we could see a solution in place within a few months."

Effects of long COVID yet to be fully felt in the workplace

Australia may have been able to ward off the COVID wave longer than most of the world, but now with a relatively highly vaccinated population the virus is running rampant. Despite the country's small population, we currently have the fourth-highest daily case rate globally and are 11th in the world for the number of active cases at 455,476.

This all will come to bear when it comes to long COVID debilitation in society and the workforce - a phenomenon that international medical and policy experts are still trying to better understand. Australia is also yet to implement an option for the general population - aside from vulnerable populations - to have a fourth jab of the COVID vaccine, which has become standard practice elsewhere given the decline in immunity over time without the benefit of a booster shot. 

Comments earlier this week in the British Parliament from Bank of England Governor Andrew Bailey provide valuable insight as to what could be in the pipeline for Australia, which is further behind the UK in its experience with COVID.

Bailey said that the size of the UK labour market fell by 450,000 people, or 1.3 per cent, since the end of 2019 before the pandemic began.

"It is a very big fall in the labour force by historical standards, and it reflects a 3 per cent increase in the number of economically inactive people, and an economically inactive person is somebody who doesn’t have a job and isn’t searching for one," he said.

"The persistence and scale of this drop has been a surprise to us. We have seen an increase in long term sickness in that number – about 320,000 people, so what we’ve done in the May monetary policy report is to lower the projected view of labour participation."

The calculation of unemployment rates omits people who are not actively looking for work, which could lead to skewed numbers if more people exit the labour force altogether due to the effects of long COVID.

There are other dynamics that play on employment rates as well, including changes in part-time work. This was particularly evident in the latest Roy Morgan employment series data released yesterday, which shows unemployment rose by 1.9 percentage points to 9.7 per cent in April.

However, the level of underemployment remained unchanged at 8.4 per cent, and this was largely due to a large fall in part-time employment as restrictions eased.

"The moves in the employment market can be explained by policy responses to the Omicron variant of COVID-19 as well as the steep fall in active cases during April," the report stated.

"During April many of the isolation rules surrounding ‘close contacts’ of positive COVID-19 cases were relaxed – meaning many workers who had only been hired on a part-time basis to fill in for workers forced into isolation were no longer required.

"As well as the change in policy, there was also a steep fall in active cases of COVID-19 during April as the Omicron variant receded and total active cases fell to their lowest since early January. These market forces led to many part-time workers falling into unemployment while a lucky few were upgraded to full-time work."

Roy Morgan CEO Michele Levine noted the April unemployment rate was the highest it had been since the start of last year's Delta wave in July 2021.

"There is an important question of why there was such a large increase in unemployment and it can be found when looking at the trends for full-time and part-time employment. Full-time employment actually increased in April, up 31,000 to 8,709,000, however there was a large drop in part-time employment, down 270,000 to 4,442,000 which fed into the increasing unemployment in the month," she said.

"The removal of mandatory isolation for close contacts of confirmed cases of COVID-19 should mean the virus has less impact on the employment markets going forward as firms will need to hire less part-time workers to fill in for isolating workers.

“However, the counter to that is that as we head into the winter months many experts suggest Australia may be on the verge of another wave of the virus as colder weather tends to lead to more people congregating together indoors – the most effective way of spreading the virus."

Roy Morgan's unemployment estimates are vastly different to those of the Australian Bureau of Statistics (ABS), which most recently reported the unemployment rate as 3.9 per cent. The difference lies in Roy Morgan's methodology with face-to-face interviews whereby a person is classified as unemployed if they are looking for work, no matter when. The results are not seasonally adjusted.

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