Between June 2012 and June 2014 the number of solicitor jobs advertised on the internet fell by 32%. For the economy as a whole, the unemployment rate rose to 6.4% during 2014. During those years there were plenty of headlines about law firms shedding staff and the oversupply of law graduates.
But then, things took a turn for the better. From June 2014 to June 2018 the number of jobs for solicitors advertised on the internet increased by 31%. The unemployment rate for the whole economy fell to 5.4% – as at June 2018.
The experience of the past decade, which includes the after-effects of the GFC, is that downturns have occurred at a faster rate than upturns. A typical scenario in the employment market is that downturns are steep and upturns are gradual. The employment market (based on job ads) for lawyers has taken four years to recover from the immediately prior two-year downturn.
There is a lot of attention at present on employment data. So far, there has been no significant spike in unemployment. Job ad numbers are not falling.
However, the increase in the demand for lawyers and the general demand for labour in the economy has stopped growing at the rate of the last four years. Job advertisement numbers for lawyers increased 5% for the 12 months ended June 2018.
Is now the time to be preparing for the possibility of a replay of 2012? The rise in unemployment from 2012 spurred on interest rate reductions. With low interest rates and an already significant federal government budget deficit, what can a responsible government do in this cycle to give the economy a boost if unemployment begins to rise again? Probably much less than last time around.
[Data source for graph: Australian Government Department of Jobs and Small Business]