The past year has shown just how vital government spending is during a recession. As we embark on the recovery, however, the latest job figures show that the public sector remains utterly crucial to keeping the economy afloat.

The old adage is that in a recession everyone is a Keynesian. Of course this is only partially true – governments are always Keynesian; conservatives remain advocates for austerity and failed policies so long as they are in opposition, as we saw during the GFC and are currently seeing in the US.

But for anyone with actual responsibility, when the economy turns to crud, you fire up the spending.

And guess what – it works.

The latest payroll job numbers released on Tuesday showed that the number of jobs is just over 1% above what we had prior to the pandemic hitting us in early March last year:

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The story is better for women than men (although the numbers are very much subject to revision), but regardless, things are a heck of a lot better compared to last year.

There were around 9% more jobs in early May than there was the same time a year ago:

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Now of course that is a pretty biased comparison.A year ago things were so bad that the federal budget had just been postponed and everyone was quite rightly freaking the heck out.

So it remains best to compare the current situation with the start of March last year – at least until we get to the point later this year where comparisons with 12 months ago will not seem so absurd.

And yes, overall things are good. There are more jobs now, and given we have gone through a recession, that is quite amazing.

It is testament to the fact that stimulus spending works, that a job guarantee (faulty though it was with the jobkeeper program) works, and it is also testament to the fact that higher unemployment benefits work as a good automatic stabiliser to keep money flowing through the economy even when jobs dry up.

It is also, of course, testament to the fact that a cash rate nearly at zero is also helpful. That we still have that cash rate of 0.1% while the government has unwound much of its direct support is, however, evidence that this economy remains very much in the ICU ward.

That fact is also clear just by taking a closer look at the seemingly good job numbers.

The numbers point very much to one where many have missed out on the “recovery” – especially men under 40:

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The latest job numbers suggest the biggest increase in work compared to the pre-pandemic period has come for those over 60.

Now that is not in itself a bad thing, but the lack of strong growth for those in the “prime-earning ages” of 25-54 is very much a concern, especially given older workers and teenagers will be more likely working casual or part-time.

These figures however only serve to back up what was shown in April’s employment figures where the good overall unemployment rate of 5.5% hid the fact that since March 2020, employment for those aged 20 to 35 has fallen and some of the biggest employment growth has come for teenage girls:

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The percentage figures, to an extent, hide just how bad the recession has been for those under 35, which also suggests that the government’s jobmaker hiring credit for under 35s has largely failed:

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Importantly, the growth in jobs for those aged 35-44 has not balanced the ledger of job losses for those who are younger.

In April there were 44,500 fewer people aged 25-55 employed than in March last year. Overwhelmingly the job losses were male ones.

It means that the level of men working full-time in their prime-earning ages remains well below pre-pandemic levels:

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If this continues, it will once again be the case that, as with all previous recessions in the past 40 years, full-time work for men never recovers.

What has recovered however is public sector work – much more so than the private sector:

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Jobs in public administration are 14% above what they were when the pandemic hit, compared to just 1.5% for the entire economy.

This is in line with the most recent breakdown of hours worked. In the March quarter of this year non-education public-sector hours worked was up 0.9% compared to last year, while those in the private sector worked 0.9% fewer hours.

This is not a criticism – it is good that governments around the nation have not cut workers – doing so only helps deepen any recession.

But it also reinforces that while government spending and stimulus helped us during the depths of the recession it remains very much needed during the recovery because the private sector continues to struggle.