With the release of today’s ABS Labour Force Survey and the unemployment figures, it might be worth having a squiz at a few things. Firstly, the way the unemployment rate in each state has been behaving:
Qld is the only State where unemployment hasn’t started to taper off, with NSW looking like it’s leading the pack on the employment recovery.
If we look at how the unemployment rate has changed in each state since January 2007, Tasmania has had a mighty fine economic downturn, having had their unemployment rate actually reduce over the period.
The resource states of Qld and WA were hit hardest, but should be expected to undergo a bit of volatility but overall strong decline over the next few years as the resource boom swings back into action.
The other stats worth looking at are the underemployment rates. The ABS defines underemployment as:
Employed persons aged 15 years and over who want, and are available for, more hours of work than they currently have. They comprise:
Persons employed part time who want to work more hours and are available to start work with more hours, either in the reference week or in the four weeks subsequent to the survey; or
Persons employed full time who worked part time hours in the reference week for economic reasons (such as being stood down or insufficient work being available). It is assumed that these people wanted to work full time in the reference week and would have been available to do so.
It’s a good addition to the usual unemployment rate as it catches a wider group of people that are still experiencing a lack of employment rather than a total absence of employment. People will often criticise the unemployment rate for defining someone that works as little as an hour or two a week as being employed. Yet the problem really isnt with the unemployment rate as a definition – unemployment is a total absence of employment - we need to learn to use the right tool for the job!
First up, looking at both unemployment and underemployment by gender:
The underemployment metrics only go up to August, while the unemployment rates go up to October. It’s interesting that unemployment increased with the GFC while underemployment was still trending down. That is a pretty whacky labour market transition mechanism at play, suggesting that businesses might not have been reducing the hours of their workforce rather than sacking people by as much as we’d been thinking they had. Certainly after March of this year it looks like it was the total hours of the workforce getting reduced rather than reducing the over all size of the workforce – but in the early part of the crisis, that September 08 to March 09 period, unemployment jumped while underemployment trended down.
If we track that underemployment metric over a longer timeframe, we pick up something pretty interesting as well.
The period from August 2002 through to December 2003 saw a dramatic jump in underemployment – almost as if some structural change had occurred in the labour market. I’ve never paid that much attention to it before and would be interested if anyone has an explanation. It’s also something we see across age cohorts, but particularly with the 15-24 year age group.
The sharp spike this year also suggests that, as happens with most downturns, the youngest in the labour market are the ones that get clobbered the hardest.
12 Comments
Cool post, love it when you get into the economics as well as the politics.
Great analysis and report Poss. Could I add a couple of points – from personal experience.
* I think that the relatively small changes in Tas and SA unemployment rates are because the folks who work there have job stability and security. Everyone who couldn’t find real work there left a long time ago – which has resulted in a finely balanced jobs/workforce mix. Good for those with jobs but bad for anyone trying to move there.
* I believe that the jump in underemployment post 2002 is a follow on from the dot com crash. Lots of people don’t understand the impact of that – it wasn’t just a tech issue but lots of people lost small (and even large) fortunes and that impacted the investment performance of the nation. Plus something like two thirds of very senior tech folks lost their jobs and have been cruising ever since. None of this was properly analysed or reported at the time – and you are picking up the trend now.
Great to see the analysis finding its way into the public domain – pity it wasn’t used by the government of the day to deal with the issues.
So the underemployment status of a worker can change even if the hours they actually work don’t (Persons employed part time who want to work more hours…)
Perhaps some of the movement in the underemployment rates can be explained by psychology rather than any real changes in employment? Certainly the media coverage of the GFC etc. must have had an impact on weather people are happy with the hours they are working (when those hours haven’t actually changed). Although how exactly I have no idea.
I suspect that underemployment continued to trend down at the start of the GFC because many of the underemployed were the first to get switched into the unemployment figures.
A stacked plot of unemployment and underemployment would be interesting, and possibly more enlightening than a graph of underemployment on its own.
All based on tinkered government unemployment stats. Useful for trends but not quantities.
I don’t think the change in underemployment around 2003 was due to any structural change. According to the ABS website (#6105), they switched methods in Feb 03 from an independent annual survey for underemployment stats in September (the UEW) to a quarterly one associated with the normal LFS. Resulted in an increase in underemployment numbers (but probably a more accurate one)
Aha! That would do it.
@pretty rage.
That is a very smart comment. Probably not all of the effect, but possibly some.
Does anyone have any papers/evidence of this?
Hi Possum,
Completely of topic,
There is a new poll for Tassie on Williams site, The Greens are on 21% , .It got me thinking about the growth rate of Green Votes.
Tassie has always led the nation and there have been steps and rises, I’d love to see the relative growth of the G vote.
I read somewhere that there are community points of critical mass, Ie when a party gets to 3-4 % they can jump to 5-6 etc.
The Greens in Vic had one of these jumps in the 2002 election. That little voice is saying to me , ‘Do it yourself you lazy bastard,” but I never will.
if we got to the stage of Lib, Lab, Greens on around 30% each… things might actually start to change.
Hmmm, why no stats for ACT or NT?
I know Newspoll excludes them but surely this is ABS data and not Newspoll?
I know ACT figures exist since they are often reported in local Canberra news (are they not reported outside of the ACT because the rate is too low and it therefore would embarrass the rustbelt states?)