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6105.0 - Australian Labour Market Statistics, Apr 2003  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 29/04/2003   
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Feature Article - Characteristics of underemployed workers


INTRODUCTION

The number of persons employed part-time has increased considerably over recent decades, and in September 2002 accounted for 28% of total employment. The majority of part-time workers (78% in September 2002) do not want to work additional hours. The 22% of part-time workers who would prefer to work more hours can be considered as persons whose labour is not fully utilised. The rate of growth in the labour force is likely to slow as Australia's population continues to age. As a result, minimising the amount of underutilised labour resources will become increasingly important in maintaining economic growth.

The ABS provides a wide range of information on available labour resources and the extent of their utilisation. Underemployment, like unemployment, reflects labour resources which have been offered but which are underutilised. Together, they represent the underutilised labour within the labour force.

The ABS includes, in its definition of underemployed, people who work part-time (i.e. less than 35 hours a week), want to work additional hours, and are available to do so. These people may want a different job with more hours, or an additional job, or longer hours in their current job. The underemployed also include a relatively small group of workers who usually work full-time but worked part-time in the reference week due to economic reasons (e.g. they had been stood down, put on short time or there was insufficient work available for them). It is assumed that these workers wanted to work full-time and would have been available to do so. These two groups of underemployed people meet the definition of 'time-related underemployment' set down by the International Labour Organisation.

Underemployment

Diagram: Underemployment



This article describes some of the characteristics of underemployed people, particularly underemployed part-time workers, using results from the ABS Survey of Underemployed Workers. This annual survey focuses on people who worked less than 35 hours in the week prior to the survey and who preferred to work more hours, providing detailed information about their availability to start work with more hours, their preferred number of additional hours, their job search activities, and their experience in looking for work with more hours. Results from the September 2002 survey were released in April 2003 in Underemployed Workers, Australia (cat. no. 6265.0).

UNDEREMPLOYED WORKERS - September 2002
Males
Females
Persons

Part-time workers wanting more hours who were available to start work with more hours
Looking and available to start
'000
124.9
168.5
293.4
Not looking but available to start
'000
79.2
153.9
233.0
Full-time workers who worked less than 35 hours in the reference week for economic reasons
'000
36.3
11.6
47.9
Total underemployed workers
'000
240.3
334.0
574.3
Underemployment rate(a)
%
4.3
7.5
5.7

Footnote
(a) Underemployed workers as a percentage of the labour force


Between September 1994 and September 2002, the number of underemployed people increased by 25%, from 459,000 to 574,000 and the underemployment rate (i.e. underemployed workers as a percentage of the labour force) increased from 5.1% to 5.7%. The underemployed now comprise almost half (48%) of all people with underutilised labour in the labour force, compared with 36% in 1994.


FULL-TIME WORKERS WORKING PART-TIME FOR ECONOMIC REASONS

In September 2002, 8% of underemployed people (48,000 persons) worked part-time for economic reasons, e.g. stood down. Men were more likely than women to be underemployed for these reasons (15% of underemployed men in September 2002, compared with 3% of underemployed women).


UNDEREMPLOYED PART-TIME WORKERS

Demographic characteristics

Most underemployed people (92% in September 2002) are part-time workers wanting more work. The majority of underemployed people are also women, reflecting the fact that women are far more likely to be working part-time than men. In September 2002 there were 1.9 million women working part-time, compared with 749,000 men. However, men working part-time are more likely to be underemployed than women working part-time, although this difference has decreased slightly in recent years. In 1994, 33% of all male part-time workers were underemployed, compared with 17% of female part-time workers. In 2002, these proportions were 27% and 17% respectively.

Graph: Part-time workers, proportion who were underemployed - from 1994 to 2002


Underemployed part-time workers tend to be younger than other part-time workers. They are more likely to be aged under 25 years (37% of underemployed part-time workers in September 2002 compared with 30% of all part-time workers) and less likely to be aged 45 years or over (22% compared with 32%).

ALL PART-TIME WORKERS, Age group and sex - September 2002
Underemployed part-time workers
All part-time workers


Males
Females
Persons
Males
Females
Persons
Age group (years)
15-19
%
22.2
18.0
19.6
26.7
13.9
17.5
20-24
%
21.4
15.1
17.5
17.9
10.0
12.2
25-34
%
17.9
18.8
18.4
12.9
18.2
16.7
35-44
%
17.4
25.4
22.3
11.9
25.6
21.7
45-54
%
12.4
18.4
16.1
12.2
21.2
18.7
55 and over
%
8.7
4.4
6.1
18.5
11.1
13.2
Total
%
100.0
100.0
100.0
100.0
100.0
100.0
Total
'000
204.0
322.4
526.4
748.6
1,876.4
2,625.0



Geographic distribution and willingness to move

The geographic distribution of underemployed part-time workers, and of underemployed workers as a whole, generally follows that of all part-time workers. In September 2002, part-time workers usually resident in Tasmania, Queensland and New South Wales were the most likely to be underemployed, while those with usual residences in the Australian Capital Territory, Victoria and the Northern Territory were least likely to be underemployed. Other than in the Northern Territory, underemployed part-time workers were more likely to state that they would be willing to move intrastate than interstate if offered a suitable job.

UNDEREMPLOYED PART-TIME WORKERS, Whether would move if offered a job - September 2002
Underemployed part-time workers

State or territory of usual residence
Would move interstate if offered a suitable job
Would move intrastate if offered a suitable job
Total
Proportion of all part-time workers who were underemployed
%
%
'000
%

New South Wales
16.8
22.8
174.9
21.1
Victoria
16.3
21.1
119.3
17.7
Queensland
22.0
31.9
110.2
21.6
South Australia
22.7
26.6
42.0
19.6
Western Australia
20.7
26.3
56.6
20.1
Tasmania
23.5
29.3
14.1
24.0
Northern Territory
30.4
28.8
2.6
18.2
Australian Capital Territory
32.6
33.6
6.6
15.1
Australia
19.1
25.3
526.4
20.1



Willingness to change occupation or employer

In general, underemployed part-time workers were more prepared to change their occupations to get additional work than change their employers or businesses. Of those who stated a preference, 61% wanted to stay with their current employer, while 50% wanted to change occupations.

UNDEREMPLOYED PART-TIME WORKERS, Whether would change employer or occupation - September 2002
Males
Females
Persons
Whether would change employer or occupation
%
%
%

Whether would prefer to change employer/business
Would prefer to change employer/business
33.1
30.9
31.8
Would prefer not to change employer/business
48.0
51.7
50.3
No preference
18.9
17.4
17.9
Whether would prefer to change occupation
Would prefer to change occupation
41.7
41.3
41.5
Would prefer not to change occupation
39.6
43.0
41.6
No preference
18.7
15.7
16.9
Total
100.0
100.0
100.0



Preferred extra hours

In September 2002, part-time workers who were underemployed preferred to work an average extra 15 hours. Underemployed men wanted more additional hours than underemployed women (17 hours compared with 14 hours). In general, underemployed persons working shorter hours wanted to increase their hours of work by more than those working longer hours.

UNDEREMPLOYED PART-TIME WORKERS - September 2002
Distribution of usual hours worked
Mean preferred number of extra hours


Males
Females
Persons
Males
Females
Persons
Usual number of hours worked
%
%
%
hours
hours
hours

1-5
12.1
13.2
12.8
20.9
17.7
18.9
6-10
15.4
19.6
17.9
20.4
17.5
18.5
11-15
14.4
16.4
15.6
19.9
15.3
16.9
16-20
24.0
20.3
21.7
18.1
14.4
16.0
21-29
19.4
20.7
20.2
13.0
10.9
11.7
30-34
14.8
9.8
11.7
9.0
7.9
8.4
Total
100.0
100.0
100.0
16.7
14.2
15.2



Preference for full-time work

While all underemployed workers want to work more hours, not all want to work full-time. Underemployed men are more likely to want full-time work than underemployed women. In September 2002, almost three-quarters (73%) of all underemployed male part-time workers wanted full-time work, compared with nearly half (49%) of underemployed female part-time workers.

Volume of underemployment

Underemployment is usually measured and analysed in terms of 'headcounts', such as the number of people who are underemployed, or the number of underemployed expressed as a proportion of employed people or of the total labour force. However, it can also be analysed in 'volume' measures, i.e. in terms of the number of extra hours sought by underemployed people. In September 2002, employed people performed 328.1 million hours of work during the Labour Force Survey reference week. If underemployed part-time workers had worked their preferred amounts of work, this total would have increased by 8.0 million hours (2.4%).

Job search activities

In September 2002, more than half (56%) of all underemployed part-time workers were actively looking for additional hours of work. The most frequent steps taken by these people to find additional work were contacting prospective employers (66%), looking in newspapers (57%) and asking their current employer for more work (53%). Almost one-quarter (24%) had registered with Centrelink for job search assistance.

Graph: underemployed part-time workers, all steps taken to find work in the last four weeks



Difficulties in finding work

In September 2002, almost one in three (30%) underemployed part-time workers looking for additional hours of work said their main difficulty in finding work with more hours was that there were no vacancies in their line of work, or simply no vacancies at all. For an additional 29%, the main difficulty was that there were too many applicants for available jobs, that they were considered too young or too old by employers, or that they lacked necessary skills or education.

Men were more likely than women to mention one of these five reasons as their main difficulty in finding additional work (62% of male part-time workers looking and available for additional work compared with 56% of females). Women were more likely than men to cite difficulties related to a lack of necessary skills or education (9% of males compared with 12% of females) and unsuitable hours (6% of males compared with 10% of females).

Graph: underemployed part-time workers, main difficulty in finding additional work



MEASURES OF LABOUR UNDERUTILISATION

The ABS recently introduced two new indicators of labour underutilisation based on the unemployed, the underemployed, and some of the people with marginal attachment to the labour force. These broader measures of underutilised labour help overcome some of the limitations inherent in the unemployment rate for measuring the degree to which labour resources are not fully utilised in the economy.

In September 2002, the labour force underutilisation rate, incorporating unemployed and underemployed people, was almost twice the size of the unemployment rate (12% compared with 6%). The extended labour force underutilisation rate, which includes unemployed people, underemployed people and some people marginally attached to the labour force, was 13%.

UNDERUTILISED LABOUR, Aged 15 years and over - September 2002
Number
Rate
'000
%

Persons in the labour force
Unemployed persons
628.5
6.2
Underemployed persons
574.3
5.7
Labour force underutilisation
1,202.8
11.9
Persons not in the labour force
Underutilised labour not in the labour force
121.9
Extended labour force underutilisation (b)
1,324.6
13.0

Footnotes
(a) Includes: persons actively looking for work, not available to start work in the reference week but available to start within four weeks; and discouraged jobseekers.
(b) The unemployed plus the underemployed plus group (a), as a percentage of the labour force plus group (a).


FURTHER INFORMATION

For further information on the characteristics of underemployed workers, please contact Jon Havelock on Canberra 02 6252 7747.

Information Paper: Measures of Labour Underutilisation (cat. no. 6296.0) describes concepts behind the ABS measures of labour underutilisation in detail. For further information relating to ABS measures of labour underutilisation, please contact Rhonda de Vos on Canberra 02 6252 7437 or email <rhonda.devos@abs.gov.au>.

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