Fact check: Has Labor created more jobs in 21 months than any other first-term government?

Prime Minister Anthony Albanese says Labor has created more jobs than any first-term government on record. (ABC News: Ian Cutmore)

The claim

Taking to the social media platform X recently, Prime Minister Anthony Albanese said that enough jobs had been created under Labor to fill 13 major sports stadiums combined, including the Adelaide Oval, the Optus Stadium in Perth and the MCG in Melbourne.

"You could even throw in another whole MCG for good measure," Mr Albanese said, before claiming: "That's 790,000 new jobs created. More than any first term government on record."

So, have 790,000 new jobs been created since Labor was elected, and is this a record for a first-term government?

RMIT ABC Fact Check investigates.

The verdict

There's more to the story than Mr Albanese's claim suggests.

In February of this year, there were an additional 789,700 employed people in Australia compared to when Labor came to power in May 2022.

This was indeed the largest such increase for a first-term government since 1966, the earliest year for which broadly comparable data was available.

However, experts told Fact Check that looking at the raw numbers alone was problematic, particularly since it ignored the role of population growth.

With population growth taken into account, the data reveals there was a greater increase in headline employment under Bob Hawke's first-term Labor government over a comparable (21-month) period.

The Hawke government also fared better during its early months on various other employment measures recommended by experts, such as overall hours worked, the rate of underemployment and the share of new jobs that were full-time.

And, importantly, experts stressed that governments cannot take sole credit for "creating" jobs.

Experts told Fact Check the private sector creates the bulk of jobs, though government policy is still a factor. (ABC News: Meghna Bali)

Taking credit

At various times over the last year, Mr Albanese and other senior Labor figures have taken credit for creating more jobs than any first-term government on record.

In May 2023, for instance, Treasurer Jim Chalmers told parliament that "we have seen the fastest jobs growth of any new government on record … and the strongest wages growth in more than a decade".

"These have been defining features of a government dedicated to secure jobs and better pay for our people."

The next month, Mr Albanese told ABC Radio that Labor had "created more jobs on our watch than any new government in history".

In August 2023, the Assistant Minister for Competition, Charities and Treasury, Andrew Leigh, claimed: "Our government has delivered half a million jobs, better jobs growth than any government on record over our first year."

And on March 19 of this year, Mr Albanese posted to X: "We've created more new jobs than any first term government on record."

Most recently, in an April 3 opinion piece published by the Hobart Mercury, Mr Albanese wrote that "more than 790,000 new jobs [had been] created since we came to office".

Source of the claim

Fact Check asked the prime minister's office to provide a source for Mr Albanese's "record" claim and received a response from a spokesman for Mr Chalmers.

"The comment is based on monthly labour force statistics from 1978 onwards and quarterly historical labour force statistics prior to 1978," the spokesman said.

In 2017, then-treasurer Scott Morrison said that year was "the strongest calendar growth in jobs we have seen on record". Is he correct? RMIT ABC Fact Check gets to work on the numbers.

These statistics reflect the results of the Labour Force Survey (LFS), conducted by the Australian Bureau of Statistics (ABS).

As Fact Check has noted in previous fact checks, the LFS provides data specifically relating to the number of people in employment, meaning it cannot account for people who hold more than one job.

The ABS has stated that although its employment estimates "are often misrepresented as the number of jobs", they in fact "provide a measure of … the number of people who have a job".

Bill Mitchell, the director of the Centre of Full Employment and Equity at the University of Newcastle, also noted the labour force data provided a net measure of employment rather than a count of new jobs created.

"[M]any jobs are created and destroyed each month, and the net outcome is the difference between those flows," he told Fact Check.

Regardless, five experts contacted by Fact Check said the labour force dataset was the most useful for assessing Mr Albanese's claim.

According to Mark Wooden, an emeritus professor at the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne, it "is widely recognised as the best source of information on employment levels and trends in Australia".

Where does the 'record' begin?

As noted by Mr Chalmers's spokesman, the LFS has been conducted since 1960, originally on a quarterly basis, and then on a monthly basis since 1978.

Professor Mitchell cautioned against comparing quarterly and monthly figures.

"The problem is that the old quarterly data is not comparable to the monthly data, so trying to go back prior to February 1978 is fraught with problems and is unadvisable," he told Fact Check.

In an email, an ABS spokesman similarly said the quarterly and monthly figures "aren't strictly comparable".

But there was "also no major time series break" in 1978, he said, so the bureau was "okay [with] presenting graphs covering 1966 and onwards".

In a 2012 article, the ABS said comparing data published prior to 1966 with later releases was problematic, "mainly because, prior to 1964, the LFS was run only in six state capital cities and data detail between 1960 and 1965 is fairly limited".

Jeff Borland, a professor of economics at the University of Melbourne, told Fact Check that looking at the data starting from 1966 was "as far [back] as is sensible".

Comparing first-term governments

Gough Whitlam is the first prime minister whose term begins in the era of comparable labour force survey data. (Australian Information Service/National Library of Australia: nla.pic-an24355082 )

Mr Albanese compared Labor's record to other "first term governments".

There have been seven of these since 1966, elected under prime ministers:

Gough Whitlam (December 1972)

Malcolm Fraser (December 1975)

Bob Hawke (March 1983)

John Howard (March 1996)

Kevin Rudd (December 2007)

Tony Abbott (September 2013)

Anthony Albanese (May 2022)

At the time of Mr Albanese's claim, the most recent labour force data was for February of this year: 21 months after he was sworn in as prime minister.

Fact Check has analysed the same time frame for each of the previous first-term governments.

Only quarterly data is available for the Whitlam and Fraser governments. In these cases, Fact Check has examined the period starting from the reference month closest to when each prime minister was first sworn into office.

What the raw numbers show

Seasonally adjusted labour force data shows that there were 14,269,600 employed people in Australia in February 2024.

This represents an increase of 789,700 people compared to when the Albanese government came to power in May 2022, in line with the prime minister's claim.

The data also shows this was indeed the biggest nominal increase to occur over the first 21 months of any first-term government since 1966.

The next-largest increases were recorded under the governments of Hawke (298,000 people), Abbott (252,800) and Rudd (227,900).

In percentage terms, the increase under Mr Albanese remains the largest since 1966, at 5.9 per cent, followed by that recorded under Mr Hawke, at 4.8 per cent.

What about population growth?

Notably, the above data does not take into account population growth, which Professor Borland said provided "an advantage to later governments" when it came to absolute increases in employment.

Professor Wooden noted that the labour force was "rapidly growing due to immigration" which made "looking at the absolute number of jobs … a little misguided".

Immigration is "a lever that the federal government can pull that will cause employment to quickly grow … since more people means more demand for goods and services", he said.

"But more people also means more people seeking work."

Professor Mitchell echoed this point, telling Fact Check that emphasising the change in raw numbers was "very misleading" because the population had grown "quite quickly in the recent period".

To "really assess the relative performance" of the labour market, he said, "one has to adjust for underlying population growth".

All three professors suggested looking at the employment-to-population ratio, published by the ABS as part of the labour force dataset.

According to the February data, that ratio rose by half a percentage point — from 63.7 per cent to 64.2 per cent — over the first 21 months of the Albanese government.

This was a better result than that recorded under five of the six previous first-term governments.

However, it was outpaced by growth during the first 21 months of the Hawke government, under which the employment-to-population ratio increased by 0.9 of a percentage point.

Comparing other 21-month periods

Ultimately, the above numbers reflect the narrow time period selected, which Professor Wooden said was one reason why "these sorts of comparisons are not very helpful".

"If I had chosen the last 21 months of the Morrison government, for example, we would find the employment-to-population ratio rising from 60.3 to 63.7; so by a massive 3.4 percentage points, and far more than the rise under Albanese," he said.

"So if the Albanese deserves credit for the improvement in employment under their period in office," Professor Wooden queried, "surely the previous Coalition [government] should be given big wraps for overseeing a remarkable recovery in employment?"

To illustrate the point, the charts below show changes in the employment-to-population ratio and total number of people in employment over rolling 21-month periods.

Beyond the headline data

While Mr Albanese's claim centred on total jobs, Alan Duncan, the director of the Bankwest Curtin Economics Centre at Curtin University, and Professor Mitchell said it was also worth considering other measures when assessing the relative performance of the jobs market.

According to labour force data on full-time and part-time status, for example, the rise in total employment over the Albanese government's first 21 months was driven primarily by full-time workers, who made up 56 per cent of the increase in people employed.

That was lower than the full-time share added under the first-term Hawke government (83.3 per cent), but higher than that of more recent governments.

(Equivalent data was not available for the Whitlam and Fraser governments.)

Professor Mitchell also pointed to the underemployment rate, which measures, as a share of the labour force, the number of employed people seeking "more hours of work than they currently have".

The underemployment rate rose by 0.6 of a percentage point during the first 21 months of the Albanese government — again, beating out all but the Hawke government, which oversaw a drop of 0.8 percentage points.

Additionally, the ABS data shows that under the Albanese government the total number of hours worked each month increased by 4.8 per cent, the second greatest such increase after a 5.8 per cent boost under the Hawke government.

Do governments create jobs?

As for who gets credit for having "created" a record number of jobs, experts said there was more to it than governments often claim.

"No government (or PM) can take sole credit (or blame) for changes in aggregate employment levels", Professor Wooden said in an email.

"Government policies clearly do affect employment levels, but it is extremely difficult (if not impossible) to separate their effect from the multitude of other forces (both domestic and international) that influence the demand for and availability of workers."

According to Professor Duncan: "As a general rule, there tends to be much credit claimed by governments of all persuasions — and blame by opposition parties — for outcomes not entirely within the government's control."

He said that while the government was "free to claim they helped with Australia's employment growth", businesses "grow their employment base on the basis of many factors — some related to government policy, but some related to local and global demands, business development, investment decisions and the like."

Professor Mitchell agreed:

"The government does not create all the jobs that emerge in the economy," he said.

He added, however, that "the policy environment is crucial to how well the private sector is performing, and that is down to the government."

Principal researcher: Ellen McCutchan

Sources

Fearlessly follow the facts no matter where they lead.

This article was undertaken through a collaborative partnership between RMIT University and the ABC, which concluded in June 2024. The article should be attributed as "RMIT ABC Fact Check [date]"

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