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.