Report

Initial assessment of the impact of a COVID-19 induced economic downturn on NSW and Australian workers

Publisher
COVID-19 Infectious diseases Pandemics Economic forecasting Economic indicators Labour market Australia
Description

The COVID-19 pandemic is one of biggest global health challenges in recent history. Since its emergence in Wuhan, China in December 2019, the virus has now spread to over 100 countries, infected over 200,000 patients and led to the deaths of more than 8000 people worldwide as of March 19, 2020.

Australia has proven to not be immune from the impacts of COVID-19. As of March 19, 2020, over 500 Australians had been infected.

While COVID-19 is first and foremost a healthcare challenge, it creates a real and unprecedented set of challenges for the Australian economy.

The policy levers pulled by both Commonwealth and State Governments – social distancing measures, emergency powers, and unprecedented travel bans – have impacted every sector of the economy, due to impositions on consumers’ ability to spend, and the perceived uncertainty and anxiety throughout the population which has led to a rapid collapse in aggregate demand.

This analysis does not assess the merits of the first round stimulus. It does, however, highlight other cohorts that will be acutely and immediately impacted by the significant economic downturn that is now evident, looking at both Australia-wide and New South Wales specific data.

Key national findings:

  • 3.7 million working Australians have no access to paid leave.
  • 1.86 million workers in Australia are employed in five sectors immediately impacted by the downturn: accommodation and food services, retail trades (excl. food retailing), creative and performing arts, sports and recreation, and airlines. While workers in these fields are immediately impacted, the economic ramifications will be felt economy wide.
  • 3.2 million Australian workers earn under $800 per week, with the overwhelming majority not able to access stimulus payments from the 17.6 billion stimulus package. This includes 557,000 employed Australians who earn under $200 per week.
  • Low paid workers are the least likely to have paid sick leave, and the most likely to be working in industries most immediately impacted by the slowdown: accommodation and food services, retail trade, sports and recreation activities, the airline industry, arts and creative sectors.
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