In six months, Morrison could have crushed it in. Shame the election is now.
So the election has been called. What’s going to be the deciding factor?
We like to think it’s about big-picture vision and value positions. It’s about the issues.
But it’s not. It’s the economy, stupid.
I don’t think Bill Clinton ever expected that that little quip would be one of the most lasting contributions of his “legacy”, but it is exactly right. People need to feel secure first and foremost. The economy has to be delivering real jobs and a decent standard of living.
If it’s not, everything else is a side-show.
And on that front, you’d have to think the economic tides are with Morrison.
And they are to a degree. The economy continues to perform reasonable well, especially on the most important metric that matters – employment.
Employment growth is easing, but it remains decent. And most importantly, the number of jobs is growing faster than out labour force population, and the unemployment rate continues to fall.
At 5%, it’s a pretty decent outcome, all things considered. By itself, it’s certainly not a ‘turf them out’ type number.
But there are problems for Morrison that are hidden behind this headline number.
The first is that employment growth is uneven. Some sectors, especially the public sectors, are doing well. Others, particularly mining and construction, less so.
That patchiness can create ‘pockets of pain’ in the economy. It can create segments were unemployment is concentrated, and political venom starts to pool. Think the mining communities of Far North Queensland, for example. It’s not possible for a miner who’s lost his job in Townsville to just go and become and community care worker in inner-city Melbourne, for example.
The other headache for Morrison is that while people have jobs, wages growth has been… what’s the economic term? Piss poor.
Wages growth has been hobbling around 2%, which means that people probably feel they’re going backwards in real terms. Technically, it’s still outpacing inflation, but I think that’s probably only a technicality. Ask around and I don’t think people will tell you that they’re keeping pace with the cost of living – especially with energy prices becoming a real pain point.
So that’s a headache for Morrison. It’s something that can shift the electoral dial.
The real irony here though is that wages are actually starting to pick up. Take a look at the chart and you can see that yes, wages growth is relatively low by historical standards, but it has definitely ticked up in recent months.
And the NAB survey is showing that more and more firms are reporting difficulty finding suitable labour.
So wages pressures are building. We’re still six months to a year away from this feeling like things are really on the up and up for everybody, but it’s coming.
So Morrison must be spewing. If only the election could have been called six months later. He probably could have ridden a growing sense of optimism to victory.
But instead, people are still grumbly, There’s not a lot of gratitude in the community.
And if Morrison loses and Labor wins, they’ll enjoy a very sweet honey-moon period as wages continue to pick up and households enjoy the boost in confidence. Even though they’ll have done nothing to deserve it.
That’s just how the cards have landed. Tough break, ScoMo.