Unemployment is a measure of the way the labour market is
operating at any time and is widely used and discussed by
economists, government, and the media to measure the level of spare
labour capacity in the economy. Low unemployment is considered
desirable by all economic players.
Clearly, some of the unemployment at any time will be what is
called frictional unemployment. This is unemployment due to normal
labour market turnover as people leave one job and move on to
another. Unemployment above this minimum, particularly if it is
high, is generally considered undesirable, though it can be argued
that high unemployment has the effect of reducing wage growth. This
may be considered desirable by some of those employing labour, but
not so desirable by those who live by selling theirs.
Unemployment
The Australian Bureau of Statistics (ABS) defines a person who
is unemployed as one who, during a specified reference period, is
not employed for one hour or more, is actively seeking work, and is
currently available for work.
Unemployment is a count of all these people.
The ABS surveys the Australian population every month and
publishes a bulletin of statistics, including statistics on
unemployment.
Figure 1 shows the seasonally adjusted number of unemployed
people for every month in the period since February 1978. From a
peak in 1992 and 1993 unemployment declined to plateau in the
period 1995 to 1998. After that period, despite a rise in 2001, the
number of unemployed people has trended downwards to a figure of
approximately 550 000 in late 2005.
Unemployment rate
The unemployment rate is the percentage of the labour force that
is measured as unemployed. The labour force is a measure of the
economically active population, i.e. employed people plus
unemployed people.
Figure 2 shows seasonally adjusted unemployment rates since
February 1978.
Underemployed and discouraged jobseekers
The official measure of unemployment does not include people who
were underemployed in the reference period. Underemployed people
are those who worked part-time but were available for work and
wanted to work more hours; or who worked full time but worked
part-time hours for economic reasons (were stood down or there was
insufficient work available).
Discouraged jobseekers are those people who for various reasons
have been discouraged from seeking work and have left the labour
force.
In September 2004 there were 243 400 underemployed people
and 28 400 discouraged jobseekers.
Recent trends
Over the past five years the period shown in Monthly Economic
and Social Indicators (MESI) tables 1.2 and 1.3 the unemployment
rate has trended downwards and is now hovering around five per cent
of the labour force. The current rates of unemployment are
historically low and are below previous lows in 1981 and 1989.
MESI tables 1.2 and 1.3
Monthly Economic and Social Indicators Tables 1.2 and 1.3
show:
- monthly original and seasonally adjusted and annual average
numbers of people unemployed and
- monthly original and seasonally adjusted and annual average
unemployment rates.
Original and seasonally adjusted numbers of people unemployed
and the unemployment rate are graphed to show the movement in these
series over the past five years.
MESI e-data tables 1.2 and 1.3
MESI e-data original unadjusted data on the number of people
unemployed run quarterly from February 1964 to November 1977 then
monthly from February 1978. Seasonally adjusted data on the number
of unemployed people run monthly from February 1978. All data on
unemployment rates run monthly from February 1978.
This feature was prepared by Greg Baker
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