This article was published in the July 2008 issue of Australian Labour Market Statistics (cat. no. 6105.0).
The underemployment rate in Australia has remained relatively stable in recent years despite a period of strong economic growth and falling unemployment. In May 2008, there were an estimated 668,500 people who were underemployed in Australia, compared with 477,000 people who were unemployed.
Underemployed people are those who want more work than they currently have, and who are available to do more work. The ABS defines underemployed workers as:
- Part-time workers who wanted more hours and were available to start work with more hours, either in the reference week or within four weeks; and
- Full-time workers who worked less than 35 hours in the reference week for economic reasons (such as being stood down or insufficient work being available).
Of the 668,500 underemployed workers in May 2008, the majority (617,800 or 92%) were underemployed part-time workers. These underemployed workers (along with unemployed people) contributed to a quarterly labour force underutilisation rate of 10.3% for May 2008 (for further information on the quarterly labour force underutilisation rate see the 'Quarterly labour force underutilisation rate'
article in this issue).
Quarterly underemployment estimates have been collected from the Labour Force Survey (LFS) since February 2003. These LFS estimates provide an opportunity to further explore the circumstances of underemployed workers that are not available from the ABS Underemployed Workers Survey conducted annually (see further information section). This is because information on the underemployed by occupation and industry are available only from the LFS. This article will examine the incidence of underemployment by broad occupation and industry group.
Underemployment tends to be concentrated in the lower skilled occupation groups. In May 2008, 16% of people employed as Elementary clerical, sales and service workers and 13% of those employed as Labourers and related workers were underemployed (see Table 1). This compares with an average of 6% for all employed people. People employed in higher skilled occupations such as Managers and administrators were much less likely to be underemployed (1% in May 2008).
The high rate of underemployment among those employed in lower skilled occupations in part reflects the fact that people in these occupations are more likely to be employed part time (part-time workers account for more than 90% of all underemployed workers). In May 2008, more than three in five (63%) Elementary clerical, sales and service workers, and around two in five (42%) Labourers and related workers were employed part time. This is much higher than the average proportion of people employed part time across all occupations (29%), and, in particular, among Managers and administrators (11%).
As women and young people are more likely than others to be employed part time, underemployment also tends to be higher among occupation groups with a high proportion of females and people aged 15-24 years. In May 2008, nearly two-thirds (65%) of people employed as Elementary clerical, sales and service workers were women, and almost half (44%) were aged 15-24 years.
1. Occupation by Underemployment - May Quarter 2008
Proportion in each occupation
Aged 15-24 years
|Managers and administrators |
|Associate professionals |
|Tradespersons and related workers |
|Advanced clerical and service workers |
|Intermediate clerical, sales and service workers |
|Intermediate production and transport workers |
|Elementary clerical, sales and service workers |
|Labourers and related workers |
|All employed |
|(a) Occupation is classified according to the Australian Standard Classification of Occupations, Second Edition (cat. no. 1220.0). |
As noted in the introduction, the majority of underemployed workers are underemployed part-time workers. Another perspective on underemployment may be gained by looking at the incidence of underemployment among part-time workers across occupation and industry.
Overall, within the Intermediate production and transport workers occupation group a relatively small proportion of people were employed part-time (20% or 184,600 people) yet close to a third (32%) of these people were underemployed (see following graph). While among the Advanced clerical and service workers occupation group a larger proportion of people were employed part-time (44% or 165,300 people), yet just 10% of these part-time workers were underemployed. These examples may reflect the fact that while there are more female underemployed part-time workers than men (392,900 female underemployed part-time workers compared with 224,900 men in May 2008), the incidence of underemployment for men who work part-time is higher than for women (25% of men who worked part-time were underemployed compared with 18% for women). Therefore occupations that have a higher proportion of male part-time workers are more likely to have a higher incidence of underemployment among their part-time workers. Just over two-thirds (68%) of the people employed part-time as Intermediate production and transport workers in May 2008 were men, while nearly all of the people (97%) employed part-time as Advanced clerical and service workers were women.
Occupations that have a higher proportion of young part-time workers are also more likely to have a higher incidence of underemployment among their part-time workers. Nearly two-fifths (38%) of people employed part-time in the Intermediate production and transport workers occupation group were aged 15-24 years compared to 6% in the Advanced clerical and service workers occupation group.
2. Proportion of part-time workers who were underemployed,
The industries with the highest proportion of underemployed workers in May 2008, tended to be those in the services sector such as the Accommodation, cafes and restaurants (13%), Retail trade (11%) and Cultural and recreational services industries (11%). Underemployment was much less prevalent in the Finance and insurance industry (2%) and the Manufacturing industry (3%), as well as in the Government administration and defence industry (3%).
3. Industry by Underemployment - May Quarter 2008
Proportion in each industry
Aged 15-24 years
|Agriculture, forestry and fishing |
|Electricity, gas and water supply |
|Wholesale trade |
|Retail trade |
|Accommodation, cafes and restaurants |
|Transport and storage |
|Communication services |
|Finance and insurance |
|Property and business services |
|Government administration and defence |
|Health and community services |
|Cultural and recreational services |
|Personal and other services |
|All employed |
|* estimate is subject to sampling variability too high for most practical purposes |
|(a) Industry is classified according to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 1993 (cat. no. 1292.0) |
As with occupation, the industries in which underemployment is most prevalent tend to be those which have a high proportion of part-time workers, many of whom are employed in lower skilled occupations. The proportion of employed people working part time in the Accommodation, cafes and restaurants (49%), Retail trade (48%) and Cultural and recreational services (41%) was much higher than the average across all industries (29%).
The industries in which underemployment was high were also those with higher than average proportions of women and young people.
As with occupation, not all industries with a large proportion of part-time workers had a correspondingly high proportion of underemployed part-time workers. For instance, while in the Health and community services industry just over two-fifths (43%) of the workforce was employed part-time, the proportion of part-time workers who were underemployed was just 16%. In contrast, in the Communication services industry, 17% of the workforce was employed part-time yet 26% of these were underemployed possibly reflecting the relatively low proportion (11%) 15-24 year olds employed part-time in the Health and community services industry. Also, the proportion of those employed part-time in the Health and community services industry who were men was 10% compared with 39% for the Communication services industry.
4. Proportion of part-time workers who were underemployed,
Data on underemployed workers by industry and occupation from the LFS are available on request.
For alternative information on underemployed workers (for example, level of highest educational attainment, preferred number of extra hours, and main difficulty in finding work with more hours) see Underemployed Workers, Australia (cat. no. 6265.0).
For further information about this article, please contact Tracey Chester (ph (02) 6252 5609 or email <firstname.lastname@example.org>).