Underemployment rising
It’s worth reviewing the 2007-05-14 Research Note on Underemployment and other measures of labour underutilitization from the Parliamentary Library if you want to reconsider the Howard/Costello "successes" in managing employment.
Whereas 4.8% of the labour force was unemployed at Sep 2006, a further 5.0% was underemployed, giving a combined … underutilitization rate of 9.8%. In other words, despite the bouyant state of the labour market in 2006, almost one in ten persons who wanted and were available to work were either not working or working less hours than they would like. … Despite the sharp fall in the unemployment rate… the underemployment rate has remained relatively flat over this time.
“Flat” is putting it politely! Actually, if you look at the graph on p2, it seems there has been a huge increase in underemployment (and marginally attached) between 1994 and 2006. Judging by recent quarterly unproductivity indicators, it’s probably worse now that WorkChoices is in effect. (See Peter Martin’s excellent unproductivity analysis here and here.)
Further woes come when you consider the number of people who are not using their skills - just think of the number of graduates (non-hospitality) working in supermarkets and coffeeshops. But such figures are hard, and I doubt Howard or Costello will commission the ABS to report on them. Maybe the ALP should fund a study and really get stuck into the economic mismanagement of the country.
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Posted: by David Bath May 16th, 2007 under Economy, Australia.
Comments: 8
Comments
Comment from Andrew Norton
Time: May 16, 2007, 9:35 pm
You’ve misread the paper - whichever way you look at it the overall labour force underutilisation rate is as low as it has been since 1994.
The proportion of graduates in non-graduate jobs is around 20%. Apart from an upward blip in the early to mid-1990s, that’s roughly what it has been since statistics started being collected.
Comment from David Bath
Time: May 16, 2007, 10:00 pm
Andrew: Thanks for the clarification, although the graph seemed to indicate otherwise (optical illusion?). A fine-grained look at the raw data supports your correction, as far as overall underutilitization goes, but underemployment still seems to have grown to compensate for decreased unemployment.
I suppose these discussions won’t be easy to pin down unless we start summing over extra-hours-desired-per-person, and having easy ways of tracking these over time.
(The ABS published a snapshot a few months back, but I don’t have it to hand.)
Your comments on graduates in non-graduate jobs is interesting, and any comments on how these stats are collected would be welcome. I actually expected it to be lower than your figure. I wonder what the figures would look like if you broke it down by age-group, and took into account jobs (e.g. hospitality) that didn’t have degrees a few years back.
It’s good to see that at least some classical liberals come to the Roo, and can make pertinent and civil dissenting comments. But then, you’d probably consider yourself progressive. Thanks again!
Comment from Terje (say tay-a)
Time: May 16, 2007, 10:33 pm
I agree that we need to do a much better job on elliminating underemployment. However we should not dismiss the real progress that has been made or the fact that we are way ahead of many other developed nations.
In terms of the next stage of reform we should be looking to make structural reductions in income tax and to remove the rigidities that exist in wage determination. I can understand Howard back tracking on Workchoices given the political heat but there is no reason the Howard government could not have done more in the way of tax cuts.
Comment from Dave Bath
Time: May 17, 2007, 12:26 pm
Andrew:
(1) The graph I mention (underemployment) is in absolute terms, the overall rate is flat. We are both correct. It’s spin, yes, but then that what bloggers and pollies do 
(2) Thanks for the graduate data.
(3) It’s good to see a “classical liberal” engaging with a lefty blog like Dead Roo in a constructive manner. I wish there was more of this sort of thing on blogs (from both L and R) rather than mere sniping.
(4) For others, Andrew’s site is quite well argued, even though I disagree with many of his perspectives.
Comment from Verity
Time: May 18, 2007, 6:55 pm
Terje, can you explain why you say that:
“In terms of the next stage of reform we should be looking to make structural reductions in income tax”
with such conviction. I do not see why this is necessarily so. We pay taxes to fund government services. True the government currently spends them on things which I can see no benefit in, ie. funding private schools and massive ad campaigns promoting their own policies, yet I fail to see the reasoning which says it is better to pay a few dollars less tax each week and by doing so compromise important services.
I’d be interested to know what your defence of tax cuts is, given taxes provide such a boost to the general well-being of our country
Comment from Dave Bath
Time: May 18, 2007, 7:04 pm
Verity: “Taxes buy civilization” (Oliver Wendell Holmes). I can see why some object.
Mind you, our taxes haven’t been getting value-for-money lately, with the mil spending apparently intent on destroying civility.
Comment from Dave Bath
Time: May 18, 2007, 7:13 pm
Verity: You probably won’t get a response from Terje. Looks like that sort of right-wing commenting stopped as soon as I put up the Econometrics 101 post. Brave Sir Robin ran away…
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Time: October 16, 2007, 4:26 pm
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