Feature Article—Unemployment
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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