Unemployment hits 10%

One of the take home messages from yesterday’s 25 basis point drop is the Reserve Bank’s worry unemployment is starting to rise.

On Monday, Roy Morgan research released the results of its latest unemployment and under-employed survey, showing unemployment in Australia is now at 10 per cent, and quite a bit higher than experienced during the GFC.

Further to the 10 per cent unemployed, an extra 7.4 per cent of the workforce is considered under-employed and looking for additional work.

Roy Morgan’s results are now almost double the official ABS unemployment rate. Historically, both have tracked each other, but in the last year these indexes have started to deviate apart. The reason is the methodology used to calculate the resulting figure.

As we highlighted yesterday, analysis by Leith van Onselen @ Macrobusiness shows in non-seasonally adjusted terms, Australia shedded jobs at a record pace in the August quarter. Employment contracted 135,500.

Provided the participation rate also falls, unemployment stays steady. Baby boomers facing redundancy, may choose to start retirement early. Other individuals with redundancy payments may take a break, before re-entering the workforce.

Roy Morgan Research CEO Michele Levine told News, “If middle class people are given redundancy payments they often feel with that ‘I’ll take a break before I look for my next job, Those people won’t hit the government statistics until they seriously come back and start applying for jobs and they’re not doing anything but that.”

To be classed as unemployed by the ABS, you must have been actively looking for work in the last month. Furthermore, you can’t have worked during the month causing a lag for newly unemployed people.

Roy Morgan takes a more simplistic view, counting anyone that is unemployed regardless of if they have been actively looking for work since becoming redundant.

The steep rise in Roy Morgan’s unemployment statistics over the last two years could begin to ring alarm bells. According to Michele Levine, official ABS figures at 5.1 per cent “doesn’t seem to reflect reality” and could help explain why the RBA is concerned.

» Unemployment hits 10% again in September – Roy Morgan, 1st October 2012.
» Brace for a white-collar recession, experts warn – Herald Sun, 2nd October 2012.


  1. It would be interesting to know the increase of those whose incomes are now less than their debt repayments plus cost of living expenses due to cut back in hours, pay-cuts or redundancy. Though they are the true ‘underemployed’, I believe underemployed defines those who wish to earn more than what they are. (We all wish that).

  2. That deviation in the two data sets is very perplexing. Seems to have commenced around the time of the 2010 hung parliament. Did Labor subsequently cook unemployment data aswell as CPI??

    Those redundancies are surely being frittered away on new cars and air travel – both of which are setting records at the moment. I suspect many are thinking they’ll have a good time for a little while, then come back and find a new job with a click of the fingers. And why wouldn’t they when you’ve had 20+ years of recession free living. They better hope this time is NOT different.

    P.S. Not a liberal…….I hate them all equally.

  3. The ABS measure (guesstimation) is way off, and I reckon the Roy Morgan measure has come in under what really is going on out there. Granted I have no measure, I’ll throw in what I know, and claim unemployment to be arounf 14-17%.

    You’re officially employed if:

    – You have worked (doesn’t have to be paid), trained, studied for at least 1 hour per week. NO! I correct myself, in the week the ABS surveyed you.

    – Registered with a JobNetwork Agency. Now this is a real funny one. Everybody receiving a (lack of) job related benefit from CentreLink, must be registered with a JobNetwork Agency. E.g Mission Australia, Salvos,…

    – Indiginous Aussies receiving CDEP.

    – Migrant or refugee receiving training. Wanna learn English? CentreLink will put you onto a JobNetwork provider, and onto an English course.

    – Disability / Sickness support pension. Under Howard / Costello, this was very easy to attain. You could tell CentreLink you had a problem with Alcohol, and you were put on. The same duo that wanted to get people with a disabilty back to work. I think there are tonnes of people that should not be receiving this.

    If you’re acquainted with a CentreLink employee, or even a JobServices Australia employee, ask them if they know of people receiving a full CentreLink (lack of) job related benefit despite working. You maybe surprised.

    Unemployement has been on the up and up since the 2008/2009 financial year, considerably so.

    Look into how the ABS conducts its’ Labour Force Survey. I have mentioned this before a few time on a few previous posts here. Your head will fall off in disbelief, unless you’ve become more cynical than tastelessness.

  4. “Pop” – there go the mining & housing booms turning to bust.

    “Swoosh” – there goes the Australian economy down the drain.

  5. And yet the property spruikers remain in full flight. I note that SQM reserach seems to be selling out to thier biggest advertisers and also becoming an unreliable contradictory authority on the property market, suddenly, despite all thier predictions property is now booming.

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