The one million Australians forgotten in the unemployment statistics

A higher proportion of newly created jobs have been part time.

A higher proportion of newly created jobs have been part time. Photo: Getty

Australia’s jobless rate dipped slightly on Thursday from 5.3 per cent to 5.2 per cent.

That’s around 709,000 people officially unemployed in Australia.

While any reduction in unemployment is generally to be welcomed, one economist reckons there’s little to cheer about, arguing that the 709,000 figure is a myth, and that our true number of unemployed is more like a staggering 2.9 million people.

And that is down largely to a shadowy, little-known group called the “marginally attached” which comprises around 1.055 million Australians.

The marginally attached is a group that is counted among neither the unemployed nor the underemployed.

They are people who would like to work, and are available to work, but aren’t looking, mainly because they think there are no jobs for them.

They are also referred to as “discouraged workers” – people who have applied for job after job but eventually give up on the prospect of finding work.

And Dr Jim Stanford, the chief economist with The Centre for Future Work, believes there’s a case to consider the marginally attached as part of Australia’s genuinely unemployed.

Dr Stanford said if you count the marginally attached, our unemployment rate would be a touch under 12 per cent – not the 5.2 per cent commonly used.

He also argues that if you include the “underemployed” – people  working some hours, but who would like to work more – the unemployment rate tops 19.7 per cent, based on the September numbers of underemployed of 1.139 million people.

Dr Stanford said combining the marginally attached and underemployed with the officially unemployed provided a truer picture of the jobs market.

“This says to me that one in five potential workers in Australia, or about 20 per cent, are people who want to work, want to work more, aren’t working at all, or working less than they want to,” Dr Stanford said.

“The reality is there’s an enormous pile of people who could work and contribute enormously to our economic performance, but are sitting on the sidelines.”

Bear in mind that to qualify as officially unemployed, a worker cannot have worked at all during the week covered by the monthly ABS survey.

If they worked even one hour, they’re not unemployed, but are a part-time worker.

An unemployed worker must also prove they have been seeking work actively enough to meet the ABS definition, which can mean registering with an employment agency, submitting applications, or starting a business.

“Because of these hurdles, hundreds of thousands of Australians who want work [or want more work] are excluded from the official unemployment number,” Dr Stanford noted.

Considering the marginally attached as part of the nation’s jobs market was important because, as people who had repeatedly tried to get work but been knocked back, they were a barometer of the toughness of the market.

Don’t mind the quality – feel the width

APAC economist with jobs site Indeed Callam Pickering agreed the unemployment rate was “narrowly defined”, and there was a case for the marginally attached to be considered as part of it.

“Ultimately, if you are in a tough labour market where there are not many jobs being created, or the wrong types of jobs being created, job seekers can easily become discouraged and easily fall out of that labour market,” Mr Pickering said.

But there have been plenty of new jobs.

Around 311,000 jobs have been created in the year to September, making it the longest period of consecutive jobs growth since 1978, when the ABS began recording monthly job statistics.

But Dr Stanford and Mr Pickering point out that there are jobs and jobs.

“Employment growth is actually softening,” Mr Pickering said.

“The quality of jobs being created is not what it was 12 months or even two years ago.”

Over the past year, an estimated 60 per cent of the new jobs created were full time, which was lower than average, and most of these were concentrated in Sydney and Melbourne.

“A lower share of these jobs are full time … and the growth in hours worked is growing slower than overall employment, which means average hours are declining, which speaks to the quality of jobs being created.”

Job creation was “not that bad, but not great either”, Dr Stanford said.

“I certainly don’t buy the shorthand of the government, that job creation has been excellent … the quality of jobs has been deteriorating and more and more jobs are part time, so the ability of people to support themselves from these jobs is questionable.”

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