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4102.0 - Australian Social Trends, 2001  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 06/06/2001   
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Contents >> Work >> Under-utilised Labour: Unemployment trends and patterns

Underutilised Labour: Unemployment trends and patterns

Between August 1966 and August 2000 the number of unemployed Australians increased from 90,300 to 596,000.

Employment is the major source of income for most Australian households, and brings with it opportunities to utilise and develop skills and to expand social networks. In addition, employment enhances a sense of personal self-worth and attachment to the broader community. As a result, unemployment can affect individuals and their families on financial, personal and social levels. Further, the number of people out of work can put pressure on welfare support provided by government and community groups.

Although the unemployment rate has fallen in recent years, it still remains higher than levels experienced in the late 1960s. This article focuses broadly on levels of unemployment since 1966 (the first year for which unemployment data are available from the ABS Labour Force Survey), and compares the levels experienced by different population groups across Australia.


Information on unemployment
The ABS has collected data on unemployment in its Labour Force Survey since 1966. The survey provides information on the labour force status and demographic characteristics of the Australian population.

Unemployed persons are those aged 15 years and over who were not employed during the survey reference week, but were available for work and were actively looking for work.

Employed persons are those aged 15 years and over who, during the reference week, worked for one hour or more for pay, profit, commission, payment in kind in a job or business or on a farm, or worked without pay in a family business, or who had a job but were not at work. Also includes employers, own account workers or contributing family workers who had a job, business or farm, but were not at work.

The labour force consists of persons who were employed or unemployed, as defined, during the survey reference week.

The labour force participation rate, for any group, is the labour force (for any group) expressed as a percentage of the civilian population aged 15 years and over in the same group.

The unemployment rate, for any group, is the number of unemployed persons expressed as a percentage of the labour force in the same group.

Seasonally adjusted estimates remove the effects of normal seasonal variation.

Part-time workers are employed persons who usually work less than 35 hours a week and who did so during the survey reference week.

Underemployed workers are persons who usually work less than 35 hours per week but prefer to work more hours.


Unemployment rates 1966-2000
Between 1966 and 2000, both the number of people who were unemployed and Australia's unemployment rate have increased. Over this period, the number of unemployed people in Australia increased from 90,300 to 596,000. In the late 1960s and early 1970s, the unemployment rate stood at 2% but over the 1970s rose gradually to 6%. The early 1980s saw a sharp rise in the unemployment rate to 10% in 1983. This declined to 6% by 1989. A further steep rise then occurred in the early 1990s, peaking at 11% in 1993.

As well as showing a general increase over the period, the unemployment rate has fluctuated with the economic cycle. However, unemployment rates have become successively higher with each economic downturn (1972, 1978, 1983 and 1993).

Although following a similar pattern, the unemployment rate for women until 1991 was consistently higher than that for men. Since 1991, this pattern has reversed with the unemployment rate for men remaining higher than for women, although the difference between these rates has varied over the time period. This reversal is likely to be a result of, first, decreases in the availability of full-time work (especially in manufacturing industries and in agriculture) during the 1990s which has had greater impact on men, who tend to look for full-time work. Second, the growth in part-time and casual work during the 1980s has also been a contributing factor, since it provided greater employment opportunities for women, many of whom seek part-time work.1

UNEMPLOYMENT RATES(a)

(a) Seasonally adjusted.

Source: Labour Force, Australia, 1966-2000 (ABS cat. no. 6203.0 and 6204.0).


Young people
The early employment experiences of individuals impact on their future employment prospects. Consequently, the early working years of young people (those aged 15-24 years) are an important time for gaining and developing skills, establishing a career and obtaining economic independence. For many young people, when periods of unemployment form part of early labour force experience, finding stable employment and establishing a career can be difficult. However, not all young people in the labour force are seeking full-time work or establishing a long-term career. Many are participating in full-time education (some still at school), and some are living with their parents.

For the period 1966-2000, the labour force participation rate of young people remained around 70%. However, since the late 1970s, the unemployment rate for young people has been notably higher than that for other age groups. Over the same period (1966-2000), unemployment among the older age groups has risen and increasingly, young job seekers have had to compete for jobs against people with more work experience. This is an issue of particular concern for young people looking for their first full-time job (see Australian Social Trends 1998, Young jobseekers).

While unemployment rates of 15-24 year olds differed from those of older people, there was also variation within this age group. As new entrants to the labour force, 15-19 year olds are less likely to have previous work experience than 20-24 year olds and consequently are less competitive in the job market. This was reflected in the consistently higher unemployment rate for people aged 15-19 years than for those aged 20-24 years (15% compared with 9% in August 2000). Many 15-19 year olds are still at school and are therefore less likely to have joined the labour force than 20-24 year olds. In August 2000, the labour force participation rate for 15-19 year olds was 57% compared with 81% for 20-24 year olds. Thus, the numbers of unemployed people in each age group were quite similar (116,100 and 103,800 respectively).

LABOUR FORCE PARTICIPATION RATE BY AGE

Source: ABS Labour Force Survey, 1966-1977; Labour Force, Australia, 1978-2000 (ABS cat. no. 6203.0 and 6204.0).

UNEMPLOYMENT RATE(a) BY AGE

(a) Original series.

Source: ABS Labour Force Survey, 1966-1977; Labour Force, Australia, 1978-2000 (ABS cat. no. 6203.0 and 6204.0).


25-44 year olds
Most people's primary working years are between the ages of 25 and 44 years. Reflecting this, throughout the period 1966-2000, labour force participation rates among this age group were generally higher than rates for other age groups. In addition, their labour force participation rates have been steadily increasing, largely due to marked increases in the participation of women in the labour force, especially in part-time work (see Australian Social Trends 1998, Trends in women's employment).

Between 1966 and 2000, levels of unemployment for 25-44 year olds, as for all age groups, followed the series of peaks and troughs associated with the economic cycle. Similar unemployment rates existed for men and women, but the numbers of unemployed women were much lower than the numbers of unemployed men. This reflects women's lower labour force participation, as many women in this age group are caring for children.

People aged 25-44 years are likely to be partnered and/or raising children. Since employment is the main source of income for most families, unemployment among parents and partners impacts on the economic and social wellbeing of both individuals and other family members.

However, the unemployment of a parent often has a greater impact on the economic wellbeing of one-parent families compared with couple families. In couple families, there are two parents to share work and family responsibilities. That is, if one parent is not working, the other is usually able to provide the main source of income. For one-parent families, there is only one adult who can provide income for the family through labour force participation. In August 2000, around 6% of both couple and one-parent families had at least one parent unemployed. However, for more than half of the couple families, while one parent was unemployed, the other was employed.

UNEMPLOYMENT RATES(a) AND NUMBER UNEMPLOYED

August 1972
August 1986
August 2000



Unemployment rate
Number unemployed
Unemployment rate
Number unemployed
Unemployment rate
Number unemployed
Age group (years)
%
'000
%
'000
%
'000

Males
    15-19
5.6
18.6
18.7
74.9
15.7
59.4
    20-24
2.6
13.3
12.3
72.5
10.4
61.3
    25-34
1.5
14.1
6.8
83.7
6.1
81.0
    35-44
1.3
10.2
4.6
50.1
4.5
60.1
    45-54
1.4
9.8
5.5
39.8
4.6
52.0
    55-64
1.4
6.8
6.1
27.6
4.8
26.1
    Total
2.0
72.9
7.8
348.6
6.4
339.5
Females
    15-19
5.9
18.8
19.5
72.9
14.7
56.7
    20-24
3.8
12.9
9.9
48.0
8.3
42.5
    25-34
4.1
15.7
7.6
59.5
4.8
47.6
    35-44
3.1
11.5
6.0
43.6
4.5
47.3
    45-54
2.1
6.9
4.5
19.0
3.5
32.1
    55-64
2.1
3.1
3.3
5.1
2.2
7.4
    Total
3.6
68.9
8.4
248.1
5.6
233.6

(a) Original series.

Source: ABS Labour Force Survey, 1972 and 1986; Labour Force, Australia, 2000 (ABS cat. no. 6203.0).


People aged 45-64 years
Labour force participation among people aged 45-64 years is lower than other age groups, with withdrawal from full-time work associated with retirement more likely to occur among those in the 55-64 years age group (see Australian Social Trends 2000, Retirement and retirement intentions). Labour force participation rates for people aged 45-64 years remained below 70% between 1966 and 2000, falling below 60% between 1978 and 1989.

Unemployment rates for people aged 45-64 years, although at a lower level, followed patterns (associated with the economic cycle) similar to those of other age groups. However, unemployed people in this age group often have less success in obtaining work than younger job seekers. This is partly because of their lack of transferable job skills as a result of technological changes and changes to industry since the 1970s, their relatively low levels of education and less flexibility to change location (see Australian Social Trends 1999, Older jobseekers). In keeping with this, the proportion of people who were long-term unemployed (i.e. those unemployed for one year or more) who were aged 45 years and over increased from 28% to 32% between 1989 and 1999 (see Australian Social Trends 2000, Long-term unemployment).

There is little difference in the unemployment rates of men and women in this aged 45-64 years. However, in 2000 the number of unemployed men (78,100) was almost twice that of women (40,000), reflecting men's higher levels of labour force participation.

UNEMPLOYMENT AMONG PARENTS IN FAMILIES WITH CHILDREN AGED UNDER 15 YEARS

August 1987
August 1993
August 2000

Couple families
    Total couple families ('000)
1,907.1
1,963.0
2,010.5
      With at least one parent unemployed as a proportion of all couple families (%)
7.2
10.4
5.7
      With at least one parent unemployed ('000)
137.9
203.6
115.1
      One parent unemployed, one employed (%)
47.3
37.9
53.1
      One parent unemployed, one not in the labour force (%)
42.7
48.6
41.5
      Both parents unemployed (%)
10.0
13.5
5.4
      Total with at least one parent unemployed (%)
100.0
100.0
100.0
One-parent families
    Total one-parent families ('000)
357.0
447.7
564.7
      With parent unemployed as a proportion of all one-parent families (%)
8.1
9.3
6.4
      With lone parent unemployed ('000)
29.0
41.5
36.3

Source: Labour Force, Australia, 1987, 1993, 2000 (ABS cat. no. 6203.0).


Regional unemployment
For much of the period between 1966 and 1984, unemployment rates in capital cities and the rest of the state were similar, with both experiencing fluctuations associated with economic cycles. However, people living outside the capital cities were more affected by the economic downturn in the early 1980s and mid-1990s. Unemployment rates outside capital city areas remained around 9% until 1987 following the economic downturn in 1983 and around 9% until 1998 following the economic downturn in 1993. In contrast, the rates in capital cities over the same time periods were generally around 7% and 8% respectively.

Several factors contribute to the persistence of high unemployment rates outside capital cities and their greater divergence from the unemployment rates in capital cities since the mid-1980s. These factors include differing economic structures within regional areas, the impact of seasonal employment and concentrations of particular industries in certain areas; all of which can place regional Australians at greater disadvantage in relation to unemployment outcomes than their city counterparts.2

UNEMPLOYMENT RATES(a) FOR CAPITAL CITIES AND BALANCE OF STATES/TERRITORIES

(a) Original series.

Source: ABS Labour Force Survey, 1966-1977; Labour Force, Australia, 1978-2000 (ABS cat. no. 6203.0 and 6204.0).


INTERNATIONAL COMPARISONS
Differences between countries are likely to be partly attributable to the data sources used to measure unemployment benefit schemes and to fluctuations in their business cycles.3

Comparability is also affected by differences in statistical methodology such as survey definitions and enumeration month(s), and questionnaire design and wording.3

SELECTED OECD COUNTRIES

Unemployment rate

1978
1986
1999
Country
%
%
%

Australia
6.2
8.0
7.2
Canada
8.3
9.6
7.6
France
5.2
(a)10.2
11.9
Greece
2.3
6.1
(b)10.8
Italy
7.2
11.1
11.4
Japan
2.2
2.8
4.7
NZ
1.8
(a)4.0
6.8
Sweden
1.6
2.5
5.6
UK
5.7
11.9
6.0
USA
6.0
6.9
4.2

(a) 1986 figures for France and New Zealand relate to 1985.
(b) 1999 figures for Greece relate to 1998.

Source: International Labour Office Year Book of Labour Statistics 1987 and 2000.


Part-time workers wanting more work
During times of high unemployment, limited job opportunities and greater competition for available full-time work increase the number of people who work part-time while continuing to seek longer working hours. The majority of people working part-time do so by choice. Those part-time workers who indicate they would like to work more hours are often referred to as underemployed workers (see Australian Social Trends 1999, Men and women wanting work).

Over the period 1978-2000 (1978 being the first year data became available on part-time workers wanting more work), fluctuations in the number of part-time workers who preferred to work more hours mirrored those for the number of unemployed people. In 1978, of all part-time workers, 124,000 (13%) people preferred to work more hours. This rose to 575,000 (26%) in 1998 but had fallen slightly to 546,000 (23%) by August 2000. The majority of underemployed workers were women (60%), and 33% were under 25 years of age, reflecting the greater proportions of workers in these groups who work part-time.

UNEMPLOYED PEOPLE AND PART-TIME WORKERS WHO PREFER TO WORK MORE HOURS

(a) Seasonally adjusted

Source: Labour Force, Australia, 1978-2000 (ABS cat. no. 6203.0 and 6204.0).


Endnotes
1 Borland, J. and Kennedy, S. 1998, Dimensions, Structure and History of Australian Unemployment, Discussion paper no. 388, Centre for Economic Policy Research, Australian National University, Canberra.

2 Borland, J. 1998, Rural Labour Markets in Australia, Discussion paper no. 383, Centre for Economic Policy Research, Australian National University, Canberra, pp. 1-2.

3 International Labour Organisation 1999, Key Indicators of the Labour Market 1999, International Labour Office, Geneva.


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