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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.


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.


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