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The untold story: SA's hidden jobless and under-employed

Opinion

The official unemployment statistics for South Australia hide a bigger problem - the huge number of people who desperately want more work or who have given up trying to find a job, writes Malcolm King.

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The Maori’s navigated vast stretches of the Pacific by memorising star positions and keeping their canoes at specific angles to the waves. We navigate the economy by using statistics.

Last year there were doubts whether the Australian Bureau of Statistics’ (ABS) employment and unemployment data were reliable estimates of the labour market. While Treasury and the Reserve Bank still use ABS data, they also turned to private sector measures, such as the ANZ Bank’s job ads and the National Australia Bank’s business conditions survey, to gauge the strength of the labour market.

Part of the reason was that back in July 2014, the ABS changed the ‘actively looking for work’ criteria. It dropped two criteria: registering for Centrelink as a job seeker and checking noticeboards for jobs. The two new criteria were: attending a job interview and starting your own business. The ABS thought the two it dropped and the two it added would offset each other —but this hasn’t been tested. What are the effects? We don’t know.

There are more significant problems with the ABS definition of being unemployed. The monthly Labour Force figures are created from a survey of about 26,000 households across Australia. It follows international conventions, created in the 1980s, which defined the unemployed as those people aged 15 years and over who are not employed during the reference week of the survey and “had actively looked for full-time or part-time work at any time in the four weeks up to the end of the reference week and were available for work in the reference week.”

So according to the definition, if you worked one hour per week in Adelaide, you were ‘employed’. If you worked one hour per week for one week during the survey week and were then fired, you were also employed. It’s absurd to suggest that working one hour per week means that an individual is ‘employed’, but in a statistical sense, the definition is accurate. Instead of attacking the problem of unemployment, the problem was defined away.

According to this narrow definition, the unemployment rate in SA in December 2015 was 7.3 per cent (trend), or about 63,200 people were out of work. But there is much more to the picture than this. The media (except InDaily) have not reported the fact that there are 91,000 underemployed people in SA who wanted to work more and were ready to work more.

As the manufacturing sector continues to contract and the service sector expands, employers have increased the ‘flexibility’ of the their workforces to improve competitiveness. In the past this meant flexitime, job-sharing and work-based childcare. In the last 10 years, ‘flexibility’ has been turned on its head as permanent jobs have been ‘casualised’ and new technologies have made other jobs redundant, creating an under class of ‘working poor’. Many of the jobs created in SA are casual.

SA has the most serious and perilous employment issues of all the Australian states and it’s hitting the working and middle classes.

Another under-reported category is the hidden unemployed. These are the people who have been rejected by employers and have given up looking for work. They may include the disabled, the young and older job seekers (45+) and Indigenous people. The disability support pension may also hide people over the age of 50 (but younger than the retirement age of 65), who would normally be classified as unemployed.

The hidden unemployed numbers exploded after the recession of the early 1990s. In Adelaide, thousands of people were sacked and could not get another job. In 2002, the Centre for Labour Research at the University of Adelaide found there were at least 19,000 hidden unemployed people in SA. What was true then is true now – only the scale of the problem now is much greater.

The ABS under-utilisation of labour rate in SA – which sums the unemployed and the underemployed numbers – is currently 17.9 per cent (trend). That’s about 156,000 people of the 875,000 people in the state’s labour force. The number of hidden unemployed in SA is about 30,000 people.

Having a large pool of unemployed and underemployed workers, means that large foreign-owned retailers can establish businesses here, and keep wages low in a state that already has the lowest private sector wages per worker in Australia. And if the workers don’t like it, to borrow a saying from another political context, ‘they can always leave’.

The reason you may not have heard of this staggeringly high under-utilisation rate is vested interests. You can’t sell the state to property buyers, tourists and immigrants, if shops have closed and people are losing their jobs. Public relations spin puts a ‘happy face’ on the state of the economy. But you also can’t fix the problem if the citizenry is kept in the dark.

This is the big picture. It’s not only the headline unemployment estimate of 63,200 unemployed but the cold fact there are 91,000 underemployed and about 30,000 hidden unemployed who have ‘dropped out’. SA has the most serious and perilous employment issues of all the Australian states and it’s hitting the working and middle classes.

The Maoris navigated the Pacific using only the stars and the waves. The statistics we use to navigate the modern economy are under-reported and less reliable, as we sail into a social and economic storm.

Malcolm King works in generational change. He is an Adelaide writer.

Read more from Malcolm here.

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