Real Unemployment in Australia is now 9.2%

What’s the “real” unemployment rate in Australia?

According to Roy Morgan Research, in October a total of 2.454 million Australians, 19.1% of the workforce, were either unemployed (1,188,000) or under-employed (1,266,000).

This is up 256,000 (up 1.7%) from October 2015.

1.188 million Australians (up 78,000 since October 2015) are unemployed and these real unemployment figures are substantially higher than the current ABS figure for September 2016 (5.6%).

Australian real unemployment was 9.2% (up 0.4% in a year and up 0.7% in a month).

The problem Australia faces can be seen when comparing full-time and part-time employment:

Full-time employment is now 7,594,000 – down 83,000 from a year ago (7,677,000 in October 2015).

In contrast, part-time employment has increased by 193,000 to 4,069,000 over the past year (an average of just over 16,000 per month)

Trump had much the same problem.

Roy Morgan research explain that US President-elect Donald Trump consistently stated during his campaign that real unemployment in the US was well over 20% or even 25% rather than the official Bureau of Labor Statistics (BLS) U3 figure – now at 4.9% for October 2016.

Trump’s successful candidacy shows that many Americans agree with the new President that the official unemployment figures are considerably under-stated.

There is a clear lesson for Australian politicians in Trump’s success.

• In October a total of 2.454 million Australians, 19.1% of the workforce, were either unemployed (1,188,000) or under-employed (1,266,000). This is up 256,000 (up 1.7%) from October 2015;
• 1.188 million Australians (up 78,000 since October 2015) are unemployed and these real unemployment figures are substantially higher than the current ABS figure for September 2016 (5.6%). Australian real unemployment was 9.2% (up 0.4% in a year and up 0.7% in a month);  
  
• The Australian workforce increased to 12,851,000 (up 188,000 since October 2015), but total employment only increased to 11,663,000 (up 110,000) – this shows there have not been enough new jobs created over the past year to soak up the growing number of people looking for work and thus the increasing size of the workforce;
• The problem can be seen when one looks at full-time employment which is now 7,594,000 – done 83,000 from a year ago (7,677,000 in October 2015). In contrast, part-time employment has increased by 193,000 to 4,069,000 over the past year (an average of just over 16,000 per month);
• The higher part-time employment contributed to the rise in under-employment; now 9.9% of Australians (1,266,000, up 178,000 since October 2015) are under-employed (up 1.2%) – working part-time and looking for more hours.

Roy Morgan Unemployed and ‘Under-employed’* Estimate
	Unemployed or ‘Under-employed’*		Unemployed		Unemployed looking for		‘Under-employed’*
					Full-time	Part-time
	‘000	%	‘000	%	‘000	‘000	‘000	%
2016
Jan-Mar 2016	2,496	19.1	1,362	10.4	639	723	1,134	8.7
Apr-Jun 2016	2,322	18.1	1,317	10.2	637	680	1,005	7.8
Jul-Sep 2016	2,296	17.8	1,266	9.8	574	692	1,030	8.0
Months
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
November 2015	2,536	19.6	1,186	9.2	623	563	1,350	10.4
December 2015	2,690	20.7	1,256	9.7	722	534	1,434	11.0
January 2016	2,575	19.7	1,346	10.3	696	650	1,229	9.4
February 2016	2,480	18.8	1,319	10.0	589	730	1,161	8.8
March 2016	2,433	18.8	1,422	11.0	631	791	1,011	7.8
April 2016	2,322	18.1	1,334	10.4	611	723	988	7.7
May 2016	2,316	18.1	1,369	10.7	661	708	947	7.4
June 2016	2,326	17.9	1,247	9.6	637	610	1,079	8.3
July 2016	2,536	19.5	1,365	10.5	645	720	1,171	9.0
August 2016	2,249	17.5	1,332	10.4	544	788	917	7.1
September 2016	2,103	16.2	1,101	8.5	532	569	1,002	7.7
October 2016	2,454	19.1	1,188	9.2	626	562	1,266	9.9

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

Gary Morgan, Executive Chairman, Roy Morgan Research, says:

“In October Australia’s real unemployment was 9.2% (1.188 million people looking for work, 78,000 more than a year ago) and under-employment was 9.9% (1,266,000, up 178,000 in a year) – a total of 19.1% (2.454 million) Australians looking for work or looking for more work. 

“Although the Australian workforce has increased over the past year – now at 12,851,000 (up 188,000 from a year ago), the increase in the workforce has outpaced the increase in overall employment leading to the rise in unemployment.

“The problem faced by the workforce has been a lack of new full-time jobs – now 7,594,000 Australians are employed full-time, down 83,000 from a year ago (7,677,000 in October 2015). In that same time part-time jobs have surged to 4,069,000 (up 193,000) and more people are looking for work.

 “Donald Trump’s victory in last week’s United States Presidential Election has brought renewed focus to the issue of unemployment and under-employment. Trump consistently stated during his campaign that real unemployment in the United States was far higher than the official estimates.

“In May Trump stated:

‘We have tremendous deficits. Don’t believe the 5 per cent. The real [unemployment] number is 20 per cent. The United States is dying from within, its domestic infrastructure is crumbling and successive administrations have wasted $5 trillion in the Middle East instead of using the money to create jobs and prosperity at home.’

“This was the message Trump repeated throughout his successful campaign for the Presidency and which helped propel Trump to what so-called ‘experts’ and ‘pundits’ considered unlikely. The key to Trump’s victories was winning the former manufacturing heartland of the United States; the Mid-West ‘rust-belt’ States of Ohio and Indiana and even more importantly Michigan, Pennsylvania & Wisconsin – none of these three States have voted for a Republican Presidential candidate since the 1980s. 

“In the Australian context the reasons are well known – the loss of many high-paying full-time jobs with the end of the ‘Mining boom’ is exemplified by the troubles faced by South Australian miner and steel company Arrium and a fortnight ago came the announcement that Victoria’s largest coal-fired power station at Hazelwood is to close early in 2017 with more than 1,000 direct and indirect jobs set to go.

“The good performance of minor parties, including Pauline Hanson’s One Nation, at Australia’s recent Federal Election (minor parties received 23.2% of the vote) shows many Australians are also looking for political options outside the major parties.

“If Malcolm Turnbull’s Coalition Government and the Labor Opposition led by Bill Shorten fail to provide leadership by implementing and advocating policies that deal with the real issues many Australians face – including the much higher level of real unemployment and under-employment than reflected by the ABS monthly employment statistics – a rising number of Australians will continue to look to the likes of Pauline Hanson, Nick Xenophon, Derryn Hinch, Jacqui Lambie and others for alternatives.”

This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly face-to-face interviews of 506,783 Australians aged 14 and over between January 2007 – October 2016 and includes 4,870 face-to-face interviews in September 2016.

*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).

Source: Roy Morgan Research