Understating unemployment?

A survey result by the Bureau published this morning suggests that the participation rate significantly understates the number of Australians who could be enticed into the workforce if jobs were available

Richard Farmer

Crikey political commentator

Understating unemployment? The monthly labour figures of the Australian Bureau of Statistics during the last year have put the participation rate in employment at over 65% with the number unemployed around the 5% mark. Yet a survey result by the Bureau published this morning suggests that the participation rate significantly understates the number of Australians who could be enticed into the workforce if jobs were available. In its survey Labour Force Experience the ABS presents information about the labour force experience of persons aged 15 years and over not during a single month but during the 12 months ending February 2011. It found that there were 12.9 million persons aged 15 years and over who participated in the labour force at some time during the year ending February 2011 (78% of males and 66% of females). That is, 72% of Australians aged 15 years and over either worked or looked for work at some time during this period (the same as in 2009).

Of the persons who were in the labour force at some time during the 12 months ending February 2011, 70% spent the whole year in the labour force and 17% spent from 39 to under 52 weeks in the labour force. The persons with the highest proportion of participation in the labour force at some time during the year ending February 2011 were those aged 20-34 years (89%), closely followed by 35-44 year olds (88%) and 45-54 year olds (87%).

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3 comments

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3 thoughts on “Understating unemployment?

  1. jaywhar

    so all the Australian capitals (I think Bris came in at 21 and in absolute scores isn’t far off the others) are all pretty great places to live, yet to read most media here you’d get the impression that we’re all stuffed.

  2. billie

    Richard the catchy headline isn’t justified by your report. Your analysis of the ABS statistics fails to remind readers who may not be familiar with the ABS definition of “unemployed” or methods of calculating “unemployment”.

    A person is employed if they have an hour of work paid or unpaid in the survey period. A person who volunteers for an hour per week is not unemployed, might not be able to eat – but not unemployed. A person who is studying, not actively looking for work, not able to start work tomorrow, on an employment program etc is not unemployed.

    The ABS does not count the numbers of people in receipt of Centrelink payments, often there are double the number of Centrelink recipients than a 5% unemployment rate would indicate. Instead the ABS surveys a carefully selected sample of Australians by telephone in the first week of the month. Respondents remain in the survey for 12 months.

    Since the 1990s economists have routinely assumed the real unemployment rate is about triple the ABS publicised figure. When Costello gloated that Australia had lower unemployment that Germany he nearly bought down the house of cards as people were reminded that Germany defines unemployment as less than 15 hours of paid work a week, as opposed to Australia’s 1 hour paid or unpaid work.

  3. drsmithy

    Clearly the cost of living – and particularly the affordability of housing – is not a major factor.

    Also, no Zurich anywhere on the list ? Hard to take it seriously without that.

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