Australia's economic growth has slowed to its lowest level since the global financial crisis, with stagnant wages and weak consumer confidence raising fears of a recession reminiscent of the early 1990s. Retail spending is at its weakest since that downturn, and the jobs rate fell for the first time in three years last week.
For many Australians, the memory of the last recession remains vivid. John Andrews lost his job at age 51 in the early 1990s, after three decades in IT. He spent five years in temporary roles, surviving on unemployment benefits. 'I soon found out that it was hard for a 50-year-old to get employment,' he said, recalling age discrimination during interviews. His son Paul, then 20, also struggled, unable to find work after graduating from the University of Sydney. The unemployment rate for 20-to-24-year-olds reached 17 per cent in 1992.
Despite the worrying signs, economists such as Stephen Koukoulas argue that a full recession is unlikely, citing infrastructure spending and healthy exports. The Reserve Bank's interest rate cuts have yet to boost household spending. However, 60 per cent of the current workforce was too young to be employed during the 1990 recession, leaving many unaware of its severity.
The conventional definition of a recession is two consecutive quarters of negative GDP growth. Australia experienced a 1.8 per cent fall in GDP in the September quarter of 1990, with the formal downturn lasting until September 1991. Unemployment remained high for years afterwards, a phenomenon termed the 'jobless recovery'. The causes of that recession were global, and its effects were devastating: 31 out of 38 studies found that suicide rates increase during economic downturns.
Andrews, now 78, says the experience changed his worldview. He sold his house and eventually found a permanent job at Macquarie University, but on lower pay. 'Many people think that unemployed people choose to be unemployed,' he said. 'These people revealed themselves to me as being basically heartless.'
