Boosting the number of women, younger people and older Australians in the workforce would potentially generate an extra $207 billion for the Australian economy - or increase GDP by 12 per cent, according to new analysis by PwC.
PwC’s new Labour Market Performance Index (LMPI) tracks how Australia performs against other OECD countries in enhancing workforce participation for key demographic groups with historically lower participation rates: females, youth and those over 55 years.
Three-quarters of working aged Australians are in employment, according to ABS data - a record high. However the new LMPI shows Australia is below the OECD average, sitting near the middle of the OECD range, ranking 14th out of 35 countries.
Improving workforce participation is one of the few major economic reforms that would have a tangible impact on Australia’s economic growth. The LMPI has been developed as a new composite measure to gain a more holistic view of the nation’s performance, comprising results from PwC’s Young Workers Index; Women in Work Index and Golden Age Index, which focuses on older workers.
A breakdown of each ranking across international comparisons reveals a decline in Australia’s performance for the Young Workers Index. Scores for the Women in Work Index and Golden Age Index improved between 2007 - 2018, but Australia’s relative position compared to other nations remained largely unchanged.
Under the new LMPI, Australia’s performance compared to other OECD countries fell from 12th place in 2013 to 14th in 2018.
The analysis also looked at the long-term boost to gross domestic product (GDP) from improving our labour market performance, as measured by the index. Sweden - which performed strongly across all three indices - was used as a benmark country to compare and estimate our GDP boost.
PwC Chief Economist Jeremy Thorpe said: “Although we have seen improved labour market participation in recent years, we cannot afford to be complacent in assisting these groups to secure jobs.
“There is a real issue, particularly with youth under-employment, that we need to address. When looking at the performance of other countries, Australia is far from best practice when it comes to having an inclusive workforce.
“Realising the potential economic gains from greater participation will need a mix of policies to overcome discrimiantion in the workplace, boost vocational training including retraining for all age groups, and improve childcare and flexible working arrangements.
“Successive Australian Governments have certainly made progress over the last two decades, but our analysis suggests more needs to be done for Australia to match international best practice and drive economic growth.”
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© 2017 - Fri Mar 05 05:28:47 UTC 2021 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. Liability limited by a scheme approved under Professional Standards Legislation.