Workers are piling into caring professions, fresh jobs data suggests in a trend Treasurer Jim Chalmers says should be welcomed not snubbed.
Australia has consistently produced more jobs than expected in an anaemic economy and Thursday's official labour force data confirms many of those roles are in non-market sectors.
Those areas of the economy accounted for more than 80 per cent of extra demand for workers in the September quarter, based on KPMG analysis.
"The non-market sector, which largely reflects public services provided by government, has now recorded a higher absolute increase in employment since the beginning of COVID pandemic compared with market sectors," KPMG chief economist Brendan Rynne said.
That's despite non-market sectors representing less than 20 per cent of the domestic economy, he said.
The federal opposition warned the strong growth in public sector jobs was masking weakness in the private sector.
Opposition employment spokeswoman Michaelia Cash said the Albanese government was "all about increasing the size of the public sector whilst attacking the private sector with red tape and uncertainty".
A care job "is a real job, we value it, we are paying people appropriately", Jim Chalmers says. (Darren England/AAP PHOTOS)
Yet, Dr Chalmers said not all non-market jobs were public service roles and rejected the notion that "it's only a real job if it's not in the care economy".
"There's a real snobbiness at the core of that critique, which says, 'if you work in the care economy, that's not a real job'," he said on Friday.
"It is a real job, we value it, we are paying people appropriately."
Pay rises for aged care and childcare workers were a reason to expect further growth in those sectors, e61 research economist Matthew Maltman said.
The ageing population, ongoing growth of the National Disability Insurance Scheme and policy moves to improve accessibility and affordability of child care would also keep workers moving into the care economy.
Mr Maltman said the care economy had grown faster than any other sector in the past decade and was the most popular destination for workers switching industries.
"The expansion of the care economy represents the most profound structural change since the mining boom," he said.
While a welcome opportunity to offer high-quality care for the most vulnerable, Mr Maltman said the rise of the care economy posed fresh challenges for managing worker demand and driving productivity growth.
The latter, a key driver of economic growth and higher living standards, has been performing poorly, and the think tank has identified the dominance of care sectors as part of the problem.
Mr Maltman said policymakers might need to "reconceptualise what productivity growth looks like on the ground".
Unlike in market services, where self-service checkouts and restaurant QR codes have become commonplace, imagining labour-saving productivity improvements in child care or aged care was more difficult.
"Instead, productivity growth might come from improving service quality without increasing worker numbers, as the Productivity Commission found in health care, rather than cutting labour while maintaining the same quality," Mr Maltman said.