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“Real” unemployment is higher than you think

Unemployment figures are extremely important as they represents the number of Australians looking for work at a point in time.

However, unemployment is seasonal because of events such as football finals (AFL & NRL), Spring Racing Carnival, Christmas & New Year retailing season and there are different ways of measuring unemployment

According to Roy Morgan Research, in October real unemployment in Australia is 8.8% (up 0.5% in a month); but down 0.3% from a year ago (9.1%)

In October 2015:

  • 12,663,000 Australians are in the workforce (up a large 654,000 since October 2014) and 11,553,000 Australians are employed (up a large 634,000 since October 2014);jobs employment
  • 7,677,000 Australians are employed full-time (up a large 443,000 since October 2014);
  • 3,876,000 Australians are employed part-time (up 191,000 since October 2014);
  • 1,110,000 Australians are looking for work: 8.8% of the workforce – up 20,000  since October 2014 (but the unemployment rate is down 0.3% due to population growth);
  • 1,088,000 Australians are under-employed – working part-time and looking for more hours: 8.6% of the workforce  – down 29,000 (or 0.7%) since October 2014;
  • Now 2,198,000 Australians are unemployed or under-employed: 17.4% of the workforce – down 9,000 (down 1%) since October 2014.
  • This month’s increase from 8.3% to 8.8% means the latest Roy Morgan unemployment estimate is now 2.6% higher than the figure currently quoted by the ABS for September 2015 (6.2%).

Gary Morgan says:

“The headline monthly Roy Morgan unemployment estimate is extremely important as it represents the number of Australians looking for work at a point in time. However, unemployment is seasonal because of events such as football finals (AFL & NRL), Spring Racing Carnival, Christmas & New Year retailing season, Easter-break and other events during the year, so to see how the economy is going it is useful to compare the point in time year on year.

“Australian employment was 11,553,000 (up a large 634,000 since October 2014).
The strong rise in employment has been led by a large increase in full-time employment over the past year to 7,677,000 (up 443,000) while part-time employment has increased at a slightly slower rate to 3,876,000 (up 191,000) according to today’s Roy Morgan October employment estimates.

“Although employment in Australia has increased strongly over the past year, the unemployment rate has only fallen slightly to 8.8% (down 0.3% from a year ago) while under-employment is now at 8.6% (down 0.7%).
The increase in jobs over the past year hasn’t been enough to make much difference to the overall level of unemployment and under-employment – now a total of 2.198 million Australians (17.4%, down 1.0%) are unemployed or under-employed (down only 9,000 from a year ago).

1-percent

“The biggest challenge facing new Prime Minister Malcolm Turnbull and Treasurer Scott Morrison before next year’s Federal Election is to implement policies that make a real difference to the over 2 million Australians looking for work or looking for more work.
The continuing speculation about major taxation reform is a promising sign – but only if the hard decisions are made and the contentious reforms are implemented.

“Successful right-wing political leaders in recent years including New Zealand Prime Minister John Key, New South Wales Premier Mike Baird and former Prime Minister John Howard have all made courageous decisions on reforms including introducing a GST (Howard) and increasing the rate of the GST (Key).
Their successful stewardship of significant reforms increased their political capital to make further reforms down the road in subsequent years.

“For Turnbull & Morrison to be successful in the current economic climate they need to make their mark on improving the productivity of the Australian economy by increasing the flexibility of the Australian labour force.
The Coalition’s policy of increasing the GST may be both fair and needed, but it doesn’t solve the big issue that confronts the Australian economy.

“The Government’s main priority must be to eliminate the sizeable ‘cash economy’ in Australia which will free-up the Australian labour market and have a much bigger impact on increasing productivity and employment growth throughout Australia than a simple increase in the GST.

“The widespread wage sham and payroll falsification uncovered at 7-Eleven Stores and alleged at several other franchisors includingUnited PetroleumBakers DelightDominosNandos and Subway confirm what we have been saying for years about the ‘cash economy’ – it must be stopped by the Federal Government.

“The ‘cash economy’ consists of hundreds of thousands of Australians in hospitality, retail, trades, building and the like.
The only viable solution to deal with the cash ‘rorts’ uncovered throughout the economy in recent months is to declare an amnesty and allow the economy to start afresh.
Unfortunately the issues created by Australia’s large ‘cash economy’ are ignored by politicians and the Fair Work Judiciary.”

Roy Morgan Unemployed and ‘Under-employed’* Estimate
Unemployed or ‘Under-employed’* Unemployed Unemployed looking for ‘Under-employed’*
Full-time Part-time
2014 ‘000 % ‘000 % ‘000 ‘000 ‘000 %
Jan-Mar 2014 2,532 20.0 1,489 11.7 844 645 1,043 8.2
Apr-Jun 2014 2,360 18.9 1,273 10.2 638 635 1,087 8.7
Jul-Sep 2014 2,237 18.2 1,179 9.6 594 585 1,058 8.6
Oct-Dec 2014 2,449 19.6 1,251 10.0 559 692 1,198 9.6
2015
Jan-Mar 2015 2,384 18.9 1,327 10.5 656 672 1,057 8.4
Apr-Jun 2015 2,359 18.7 1,263 10.0 618 645 1,096 8.7
Jul-Sep 2015 2,061 16.2 1,109 8.7 518 591 952 7.5
Months
September 2014 2,223 18.2 1,208 9.9 613 595 1,015 8.3
October 2014 2,207 18.4 1,090 9.1 461 629 1,117 9.3
November 2014 2,491 19.7 1,260 10.0 564 696 1,231 9.7
December 2014 2,648 20.6 1,402 10.9 653 749 1,246 9.7
January 2015 2,266 18.0 1,233 9.8 635 598 1,033 8.2
February 2015 2,542 20.3 1,381 11.0 590 791 1,161 9.3
March 2015 2,344 18.5 1,368 10.8 742 626 976 7.7
April 2015 2,446 19.4 1,309 10.4 656 653 1,137 9.0
May 2015 2,310 18.5 1,289 10.3 646 643 1,021 8.2
June 2015 2,321 18.2 1,192 9.3 552 640 1,129 8.9
July 2015 2,074 16.4 1,097 8.7 525 572 977 7.7
August 2015 2,117 16.6 1,173 9.2 548 625 944 7.4
September 2015 1,994 15.6 1,058 8.3 482 576 936 7.3
October 2015 2,198 17.4 1,110 8.8 464 646 1,088 8.6

*Workforce includes those employed and those looking for work – the unemployed.

This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly face-to-face interviews of 456,107 Australians aged 14 and over between January 2007 – October 2015 and includes 4,201 face-to-face interviews in October 2015.

*The ‘under-employed’ are those people who are in part-time work or consultants who are looking for more work. (Unfortunately the ABS does not release this figure in their monthly unemployment survey results.)



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Michael Yardney

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'“Real” unemployment is higher than you think' have 2 comments

  1. November 7, 2015 @ 6:18 pm George

    The real issue is the difference in definitions as these definitions usually serve a specific purpose. And also how they arrive at the figures.
    What is the government’s definition of unemployed and how do they measure this? Remember the govt’s definition aims is to minimise unemployment benefits and massage the figures so they look better than they really are for political reasons.
    What is the ABS definition of unemployed and how do they measure this?
    What is the Roy Morgan’s definition of unemployed and how do they measure this?
    Same for Australians looking for work but in the end how many of these people actually need that work?
    Taking me for example….placed out of work at age 46 but too many assets to qualify for unemployment benefits.
    So no point registering with Centrelink. And I dont put “unemployed” on my tax return either.
    Still looking for work but who knows? Am I unemployed? Am I looking for work? How would anyone know?
    Which figures include me (if any) ? Roy Morgan hasnt asked me either so how would they know?
    Just demonstates what a load of cock and bull all there figures really are.

    Reply

    • Michael Yardney

      November 7, 2015 @ 6:32 pm Michael Yardney

      George,are you suggesting government statistics are inaccurate?

      Reply


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