Care Economy Experiencing Rapid Growth with Continued Expansion Expected
Workers are entering caring professions, as indicated by recent job data, in a trend that Treasurer Jim Chalmers believes should be embraced rather than criticized.
Australia has consistently exceeded job expectations in a sluggish economy, and the official labor force data from Oct. 17 confirms that a significant portion of these roles are in non-market sectors.
According to KPMG analysis, these sectors accounted for over 80 percent of the increased demand for workers in the September quarter.
“The non-market sector, which mainly consists of public services provided by the government, has seen a greater absolute increase in employment since the start of the COVID pandemic compared to market sectors,” stated KPMG chief economist Brendan Rynne.
Despite representing less than 20 percent of the domestic economy, non-market sectors have been the driving force behind job growth.
The opposition raised concerns that the rapid growth in public sector jobs was masking weaknesses in the private sector.
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Opposition employment spokeswoman Michaelia Cash expressed concern that the Albanese government was prioritizing growing the public sector over supporting the private sector, which she claims is burdened with excessive regulations and uncertainty.
However, Chalmers argued that not all non-market jobs were public service positions and dismissed the notion that working in the care economy is not a “real job.”
He emphasized the importance of valuing and appropriately compensating those working in the care industry.
According to research economist Matthew Maltman, pay increases for aged care and childcare workers are expected to drive further growth in these sectors.
The aging population, the expansion of the National Disability Insurance Scheme, and policies aimed at improving access and affordability of childcare are contributing to the influx of workers into the care economy.
Maltman noted that the care economy has outpaced all other sectors in growth over the past decade and has become a popular career choice for individuals changing industries.
Although the rise of the care economy presents an opportunity to provide quality care for vulnerable populations, it also poses challenges in managing worker demand and increasing productivity.
Maltman highlighted that productivity growth, essential for economic growth and improved living standards, has been lacking, with care sectors playing a significant role in this issue.
He suggested that policymakers may need to reconsider how productivity growth is achieved, particularly in sectors like child care and aged care where traditional productivity improvements may not apply.
Enhancing service quality without increasing worker numbers could be a key driver of productivity in these sectors, according to Maltman.
