11 January 2007

A little straight talking about unemployment figures

The official measuring stick of unemployment in Australia - if a person over 15 works for an hour a week they are counted as "employed" - is preposterous, even though all governments of both political persuasions go along with it.

Fortunately there are a few voices offering a different view. Henry Thornton is one. The link is to his post today, which in turn links to other sources including the Roy Morgan Unemployment estimate (which estimates unemployment at 7.1%, not the official 4.6%), and two other posts from his own site: one last month from Marcus L'Estrange and another from Henry himself last July.

They are all worth reading closely. Each goes into considerable detail so it's hard to summarise them here, but I'll quote a little from L'Estrange:

The OECD reports that Australia is the third lowest spender in the developed world on training unemployed people (Melbourne Age, June 26, 2006).

Many things are wrong with the monthly, or headline, "Labour Force" figures. Some examples are that advanced countries such as Germany and Singapore only count a person as employed if he or she works 15 hours or more. In Australia, you are counted as being employed if you work for as little as an hour.

Currently 400,000 Australians work between 1-14 hours a week. They are counted as being "employed", but in many other countries would be counted as unemployed. The person who works an hour a week in Australia has the same status in the employment statistics as one who works 40 hours! Consequently, unemployment comparisons between countries are largely illusory.

While she doesn't concur with this view, Shadow Minister for (among other things) Workforce Participation Senator Penny Wong has, in a brief media release today, drawn attention to the numbers of Australians who are underemployed or who for whatever reason want to work but aren't included in the official unemployed figures.

It's hard to see any government changing the current flawed definition of "employed", but is it too much to hope that a future ALP government might offer a more varied range of programs aimed at encouraging greater workforce participation by the groups Senator Wong's mentioned? Perhaps someone will come up with an term (preferably one which can be reduced to a snazzy sounding acronym for them). Any ideas?

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