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Australia's jobless figures need some work

What does it take to have a job in Australia?

Turns out just 60 minutes employment in the particular week of the month that the number crunchers in Canberra are out in force are all one needs to appear in the "employed" half of the ledger.

Oddly enough, this statistical quirk dates back to the 1950s when full-time work was the norm, particularly if you were male.

Still, the catch-all category may go some way to explaining how Australia's unemployment rate remains around 5 per cent, in jarring contrast to the experiences of many.

Indeed, the jobless rate for April fell to a one-year low of 4.9 per cent, the Australian Bureau of Statistics reported, thanks in part to a recalculation of Australia's population growth.

The surprise drop - most economists were tipping the jobless rate would rise modestly to 5.3 per cent - made the budget estimates look pessimistic and make prompt the Reserve Bank to hold off on further rate cuts until it receives more proof of a weakening economy.

And yet economists - and the hoi polloi - rightly wonder what to make of a sharp half-percentage point drop in Victoria's jobless rate to 5.3 per cent in April. That state is bearing much of the brunt of a stronger dollar over recent years that's dented manufacturers and providers of education to foreign students alike.

'Work'

The mismatch between official statistics and the reality of many Australians can be explained by the definition of “work.”

According to the ABS: “Work is taken to mean work for one hour or more during the reference week, undertaken for pay, profit, commission or payment in kind, in a job, business or farm, or without pay in a family business or farm.”

Self-employed Melbourne vehicle refitter Jim Ioannidis dismisses that definition as "absurd."

"You would think the the real rate of unemployment is at least three times the published rate," Mr Ioannidis said. "Things are definitely tough out there."

The ABS said its employees definitions used by the International Labour Organisation that were established in 1982, although the underlying measure goes back to 1954.

Economists reckon the definition of work needs an overhaul.

“One hour of work doesn't contribute much to the labour force,” said National Australia Bank economist Ali Knight.

“I think underemployment is an issue and we're probably seeing it increase over the past few years, as well," She said. "The actual headline numbers don't capture that.”

ABS data showed the seasonally adjustment underemployment rate - the share of the workforce that was working but sought more hours - was 7.3 per cent in February 2012, up 0.3 of a percentage point over the year.

Ms Knight said part-time work is becoming more the norm than full-time work, particularly as more women began entering the workforce in the 1970s. Among other things, parents now need more flexible working hours.

Still, Ms Knight says it's fair to assume that not everybody in part-time work is there by choice. Many young employees are in casual work, for instance, because that's all they could find.

143 comments

  • Chris, good story. The definition of unemployment is a disgrace, but an even better one, is that the current figures are being fudged. People are being re-classified as employed/ or on disability or pension etc by Centrelink. Seriously work on that one and you will have a story that will be headlines for days throughout this country. Unemployment in this country is a lot higher than we are being told by this current government.

    Commenter
    wildlife
    Location
    sydney
    Date and time
    May 11, 2012, 2:46PM
    • As this methodology goes back to the 1950s, it is not just this "current government" that has been using these figures..

      Commenter
      Gekko
      Location
      Sydney
      Date and time
      May 11, 2012, 3:02PM
    • Absolutely. The official unemployment rate has been a farce for decades now, with definitions and goal posts in a perpetual square dance. And with so many private "service providers" rorting the system, the Centrelink merry-go-round merely adds to the fiasco. Dole bludgers are nothing; I've worked alongside employed bludgers all my life. The entire system needs scrapping with a return to something like the former CES that was NOT predicated on profit and point scoring.

      Commenter
      Max Gross
      Location
      xenoxnews.com
      Date and time
      May 11, 2012, 3:07PM
    • Get your head of the current government syndrome!!!
      Does the current government have to put their neck on the chopping block to tackle all these ludicrous policies or flaws in the way data is used ....
      Previous government had a lot of great changes to the way statistics are taken.... its time we the people were fed accurate up to date info.
      This wouldn't go astray in the property markets 'fixed' figures either.

      Commenter
      Yuppy
      Location
      Yuppy Ville
      Date and time
      May 11, 2012, 3:22PM
    • The one hour figure is also an international definition. However, it does not make it 'relevant' to what is in fact going on in the real world. What we need is to continue using this figure for comparative purposes but also develop another 'real' definition that represents reality.

      Commenter
      Jim
      Location
      Bayside
      Date and time
      May 11, 2012, 4:07PM
    • But the unemployment figures aren't from Centrelink as not everyone who is unemployed claims benefits. Most of the people who work 1-10 hours a week don't even want to work more, which you would see if you actually took the time to look at the figures. Total non story.

      Commenter
      Fitz
      Location
      Melbourne
      Date and time
      May 11, 2012, 4:07PM
    • Yeah, and each Government continues to be content to pretend these figures mean something. If you look at the under-employment and casualisation, the concept of taking mums off the parenting payment to encourage them back to work starts to look like a very sick joke.
      In fact it is bloody immoral.

      Commenter
      Christopher
      Location
      Despair
      Date and time
      May 11, 2012, 4:17PM
    • No Gekko, but the current government who are supposed to be all for the workers could change it and be a little more truthful. NO that's not their game.

      Commenter
      Said It Before about this mob
      Location
      Vermont Sth
      Date and time
      May 11, 2012, 4:18PM
    • If people want to know why we are being lied to by our Governments, read www.azizonomics.com. Basically they play with statistics to manipulate the economy and interest rates. They think they can control the actions of millions of people and businesses by changing intererest rates, and spending in key areas, but all they do is muddle up the business investment decisions of businesses, causing them not to employ for fear of policy change.

      These Muppets who we elect, don't have our interests at heart.

      Forget about global standards, get a new definition, so the government can realise there is a problem out there. No small business in its right mind could employ someone if they wanted to, give them a chance so to speak, with all these labour laws that make it hard to employ then sack a slacker. As a result, a person with a good work ethic is sidelined, because employers just can't take the risk. What if they are a dill and go on work cover, causing massive premiums for the employer?

      Until we fix labour laws we'll have high "real" unemployment rates.

      Commenter
      Buddy Rojek, B. Comm, CPA
      Location
      Melbourne
      Date and time
      May 11, 2012, 4:19PM
    • Fitz [4.07] you may want to find out a little of the reality before making statements like that - try the ABS for instance http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features60Jun+2010

      Commenter
      Christopher
      Date and time
      May 11, 2012, 4:32PM

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