Is unemployment in the mining industry soaring? > Check the facts

Who: Unemployment in the mining industry is over 10%, causing “considerable pain and disruption within the professional ranks of the minerals sector”.  The Australasian Institute of Mining and Metallurgy (AIMM),  reported in the Australian Financial Review’s hard copy as ‘Mining jobless rate soars’ (AFR 24/9/2013, p8)

The claim: AIMM claims that “many highly skilled minerals professionals are now unemployed or under-employed and we risk losing their skills. This will reduce the ability of the minerals industry to innovate and improve productivity and to respond to increases in demand for our resources as economic conditions improve in our major markets.”

The facts: The claim is based on a survey of AIMM members.  AIMM represents around 13,500 mining industry professionals, in Australia, New Zealand, PNG and other parts of Australasia.  The survey was completed by nearly 3,000 respondents.  10.9% of the survey’s Australian respondents claimed to be unemployed and looking for work.

Even if almost all respondents were from Australia (as opposed to New Zealand, PNG, etc.) the survey size represents less than 2% of Australia’s mining workforce.  AIMM membership is primarily “professional ranks” of the industry, rather than the industry as a whole.

The finding: Given the very small sample size and non-random nature of the survey, focused on a particular part of the industry, the headline in the AFR of ‘soaring’ mining unemployment does not seem to be justified.  It does not seem clear that the future productivity of the minerals industry is threatened.

Discussion of evidence: As the mining industry adjusts to different market conditions, some miners are finding themselves out of work, although most seem to quickly find new jobs, as the full report notes:

The detail behind the headline survey results also appears to indicate a labour market with a fairly high level of ‘churn’ rather than a group of minerals professionals who have been long term unemployed.

In fact they found that most respondents to last year’s survey who had been unemployed at that time have now found jobs in the industry.  The survey also found that 16% of respondents considered themselves to be “over employed”.

Furthermore, the membership of AIMM seems to have grown significantly in the last year, from “over 12,500 members” in 2012, to 13,500 now.  Given that the benefits of membership are listed as including “networking”, “career development” and “advocacy”, it seems particularly likely that unemployed industry workers would join AIMM and respond to the survey.  The full report says:

It is important to note that the results generated by the survey should be interpreted with some caution. It is possible that those AusIMM members who have experienced employment difficulties will have been more strongly motivated to fill out this survey than those who have experienced no change in their employment status. There may therefore be some bias towards adverse employment outcomes.

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