The hidden unemployed

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The official (seasonally adjusted) unemployment rate now stands at 5 per cent and there is talk again that Australia has virtually attained full employment. However, other labour market data released in March shows that the official figures hide the real extent of unemployment in Australia.  For example, while the number of unemployed at the moment is 604,800 people, the ABS survey of people not in the labour force shows that 1,292,400 of them want to work. Overall 1,897,200 do not have a job but want one.

Put another way, that means that less than a third of the people who want to work are actually defined as unemployed. If we include all those who want to work then the real unemployment rate should be 14.3 per cent of the workforce not 5 per cent.

To be recorded as unemployed by the ABS can actually be quite difficult for those who genuinely want to work. They have to have been ’actively looking for work’ in the previous month and even if they have been actively looking they must be available to start work almost immediately—within the same week they were surveyed.  That excludes many women with caring responsibilities who want to work but also have to find alternative care arrangements.

There is also a substantial level of underemployment which the ABS defines as people who ‘want, and are available for, more hours of work than they currently have’. A total of 833,800 people are underemployed at the moment. Taking account of those people, the real rate of unemployment plus underemployment rises to 20.5 per cent. The official unemployment rate is just the tip of the iceberg in Australia.

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