Job threat bogey kills confidence

It’s hard to open a newspaper these days without hearing about job losses caused by restructures or, even worse, company failure (vale Darrell Lea – so long, and thanks for the licorice).

We’ve had dispatches from the front line of the slow-speed economy for some time now and they are taking their toll.

Last week my team and I were in the field conducting research across three states and there was lots of talk about job insecurity.

The thing is, despite years of low to modest consumer optimism about the economy, the whole issue of job security hasn’t been top of mind for the many Australians we have surveyed. In the first six months of 2009, job insecurity was concerning people but by the end of that year it largely disappeared from consumer conversations, eclipsed by complaints about cost of living.

In the last 12 months this has changed. In our Mind & Mood October 2011 report, consumers started to talk about job security concerns with greater energy – those working in retail and the public service seemed particularly worried.

We’ve found now that those concerns have intensified. As one gentleman in one of my discussion groups remarked, “at the moment it’s all replacement recruitment … there are no new jobs”.

Regular research by our public affairs division mirrors what we have discovered in our qualitative research, namely that concern about unemployment has risen significantly in the last 18 months.

In July this year 20 per cent of Australians considered unemployment to be a top economic issue compared with only 9 per cent in November 2010.

Concern has increased even though the unemployment rate has remained reasonably steady. It is at present 5.1 per cent. Over the post GFC period that rate never tipped over 6 per cent, with the high point being 5.7 per cent in October 2009.

What’s driving the concern? The ever present scepticism about the impact of the mining boom on the broader economy is part of it. As one consumer observed: “The resources boom is over and so what do we replace it with? We have no manufacturing, no retail. It’s going to take 15 or 20 years for us to develop something else.”

But much of the perception about job losses is fuelled by anecdotal evidence (“my brother in law/neighbour/friend of a friend just got retrenched”) and by media reporting of job losses.

While consumers remain concerned about job security – regardless of whether those concerns are well-founded – we’ll continue to see confidence remain constrained.

Ironic really.

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