On Thursday the ABS released another set of rosy employment figures. Once again the unemployment rate in Australia is steady at 5.8%, despite the lost of 30,000 full time jobs. The number of part time jobs increased 3,800 positions further supporting the case that the trend among employers is to reduce the hours worked, rather than retrenching workers.
The good news has caused some economists to claim unemployment will peak at 7%, yet is the numbers really as rosy as one would think. While unemployment is stable, the ABS aggregate monthly hours worked continues to nose dive, further backing up the claim of reduced hours. It has now fallen 13 consecutive months.
In previous recessions, employers have simply retrenched staff. In this recession, employers are reducing hours, hence it’s not the unemployment rate that is of concern, but the underemployment. ABS figures only require an person to work 1 hour a week to be recorded as employed. 1 hour work would hardly pay the rent or the mortgage repayments.
But there is still concern the ABS figures don’t show an accurate sample of the economy.
Last month the ABS released unemployment figures showing Australia’s unemployment rate is steady at 5.8%. In the month of July, Australia has lost 900 jobs. Yet figures from Centerlink tell a much more concerning picture. In July, an extra 22,000 Australians started receiving the Newstart allowance.
This could be seen as a watered down number as it only counts the unemployed whom are eligible for Newstart. For many, they may not meet the asset test, or have other income such as a spouses income.
Since the GFC started last September, the ABS has recorded the number of people looking for work has increased 36.1%, but Centerlink figures show the number of people receiving unemployment benefits have increased by 50.6%
» Crisis toll emerges as dole claims soar – The Australian, 22nd August 2009.
This is the beauty of flexible work conditions and agreements. No-one has to tell Mum that they are unemployed, and the Prime Minister gets to brag how employers are doing their bit to keep staff.
For the economy, and individuals, a job is definitely better than unemployment, but our economic measures should be modified to suit.
Kinda of like the USA bragging that housing starts are rising. Yeah true, but compare the actual numbers to late 2006/early 2007. There is no comparison.
Lets not kid ourselves here, our economy on the surface is fantastic. Well, underneath it is one off the most sound in the world. But things are still slowing. Politically strategies that have pulled forward demand are merely making the moment look good.
I am willing to admit I’m bearish on most things at the moment. Only a fool would not think September/October has the potential to kick us around again.
Interesting how changes in statistics mean we can’t compare apples with apples. According to internet debate, if measured the same way the US currently calculates unemployment, in the Great Depression it would have peaked in the mid-high teens! 1 hour a week does not count as emloyed.
Thanks for doing a great job by the way