Introduction
The Labour Force Explained
Unemployment Rate
Participation Rate
Changes to the Labour Market
Glossary
References


INTRODUCTION

In October 2008 trend labour force estimates indicated that Tasmania was experiencing the lowest unemployment rate and the highest participation rate on record. This was largely due to the high proportion of people employed part-time, particularly females. The unemployment rate in trend terms fell to an historic low of 3.7%, marking the lowest level of unemployment since the current series began in 1978. It was also the fourth consecutive month that Tasmania had recorded an unemployment rate below that of the national rate (4.3% in October 2008), and the first time since 1980 that Tasmania had experienced a sustained period of unemployment at a consistently lower rate than the national average.

Why use trend data? Labour force figures are produced as either seasonally adjusted or trend estimates. Seasonal adjustment is a means of removing the estimated effects of normal seasonal variation from the series so that the effects of other influences, such as holiday periods, can be more clearly recognised. Seasonal adjustment does not aim to remove the irregular or non-seasonal influences which may be present in any particular month. This means that month-to-month movements of the seasonally adjusted estimates may not be reliable indicators of trend behaviour. The smoothing of seasonally adjusted series to produce trend series reduces the impact of the irregular component of the seasonally adjusted series. Trend estimates are used to analyse the underlying behaviour of a series over time, providing a more accurate indication of real movements in the labour force.

THE LABOUR FORCE EXPLAINED

The labour force includes all people aged 15 years and over who are employed or unemployed. To be classified as employed, a person must have worked for one hour or more during the reference week, on either a full-time, part-time, temporary or casual basis. They qualify as being employed if they:

• work for payment or profit, or as an unpaid helper in a family business;
• have a job from which they are on leave or otherwise temporarily absent;
• are on strike or stood down temporarily.

People are classified as unemployed if they do not have a job but are actively looking for work and are available to start work.

People aged 15 years and over who are neither employed nor unemployed are classified as being not in the labour force. This includes people who are retired, pensioners and people engaged solely in home duties.

Australian labour force framework(a)

The concepts and definitions underlying Australian labour statistics are based on the conventions, recommendations and guidelines developed and maintained by the International Labour Organisation and the United Nations Statistical Office. Australian labour statistics comply in almost every respect with these international standards. Labour force figures are derived from the Labour Force Survey component of the Monthly Population Survey. The Labour Force Survey includes all persons aged 15 years and over except members of the permanent defence forces, certain diplomatic personnel of overseas governments customarily excluded from census and estimated population counts, overseas residents in Australia, and members of non-Australian defence forces (and their dependants) stationed in Australia.

UNEMPLOYMENT RATE

Tasmania has experienced a marked decline in unemployment over the last 15 years, from a high of 12.5% in August 1993 to the record low in October 2008 (3.7%). During the same period, the unemployment rate for Australia has also been in steady decline, falling from 10.7% to 4.3%.

UNEMPLOYMENT RATE (Trend estimates)

Prior to 1990, females in Tasmania traditionally had a higher unemployment rate than males. However, this trend has been reversed over recent decades, as the participation rate for females has correspondingly increased.

UNEMPLOYMENT RATE, Tasmania (Trend estimates)

PARTICIPATION RATE

The labour force participation rate is one of the most important indicators for analysing the overall level of labour market activity. The participation rate is calculated by dividing the total number of people in the labour force by the total number of people in the civilian population aged 15 years and over. Analysis of participation rates, particularly by age, sex and family type, provides the basis for monitoring changes in the size and composition of the labour supply.

Australia has a high labour force participation rate by international standards. Labour force participation is important for the economic wellbeing of a community, and also for the individuals within it. Participation in the labour force can help to boost self esteem as well as improve financial security and social connectedness.

Despite the participation rate in Tasmania being at a record high (60.9%) in October 2008, in the 2007-08 financial year Tasmania had the lowest participation rate of all the states and territories (65.2% for Australia). This can be largely attributed to the older population profile of the state. According to the 2006 Census, 14.9% of Tasmania's population were aged 65 years and over, compared with 13.3% for Australia, and only 7.0% of Tasmanians aged 65 years and over were reported to be in the labour force. Most people in this age group were retired and as such would be classified as not participating in the labour force.

Additionally, Tasmania had the lowest retention rate (65.3%) of students progressing from Year 10 to Year 12 (75.6% for Australia). This may also be impacting on levels of participation in the labour force. People may lack the necessary skills and qualifications required for the jobs that are available. Working to improve school retention rates and encouraging the pursuit of non-school qualifications will be essential to maintaining and further expanding a skilled and adaptive workforce in Tasmania.

PARTICIPATION RATE, 2007-08 (Trend estimates)

Traditionally, males have had a higher participation rate than females, but due to cultural and economic shifts in recent decades, there has been a dramatic rise in the proportion of females participating in the labour force. The female participation rate in Tasmania increased from 38.8% in October 1978 to 54.8% in October 2008. In contrast, the male participation rate decreased from 79.1% to 70.8% over the same period, narrowing the gap between the two considerably.

PARTICIPATION RATE, Tasmania (Trend estimates)

CHANGES TO THE LABOUR MARKET

The labour market is far more dynamic than ever before. There is greater mobility as people, particularly younger people, choose to experience several different jobs in their lifetime rather than commit to a single job for life. Females are more likely to work part-time, and as a result, generally have a higher rate of underemployment than males.

Underemployed workers are employed persons who want, and are available for, more hours of work than they currently have. They comprise: (a) persons employed part-time who want to work more hours and are available to start work with more hours, either in the reference week or in the four weeks subsequent to the survey and (b) persons employed full-time who worked part-time hours in the reference week for economic reasons (such as being stood down or insufficient work being available). It is assumed that these people wanted to work full-time in the reference week and would have been available to do so.

Female participation has increased, as has the flexibility of employment conditions and arrangements. Workplaces are generally more responsive to the needs of their employees in their quest to improve their work/life balance. This could be attributed to the increased number of females in the labour force balancing family responsibilities with their work.

As a result of these more flexible working arrangements and lifestyle choices, a greater proportion of people are now employed on a casual or part-time basis, while the proportion of people employed full-time has decreased steadily over the last few decades.

EMPLOYED PERSONS, Tasmania (Trend estimates)

In 2007-08, Tasmania had the highest proportion of people employed part-time with almost one third (31.1%) of the total employed being part-time, compared with 28.4% for Australia.

PERSONS EMPLOYED PART-TIME, of total employed, 2007-08 (Trend estimates)

In 2007-08, females employed part-time represented almost one quarter (22.4%) of the total persons employed in Tasmania. Males employed part-time represented 8.8% of all employed persons. This contrasted markedly to the situation of 20 years ago, when females employed part-time in 1987/88 represented 17.4% and males 3.9% respectively.

Males employed full-time in 2007-08 represented less than half (46.1%) of the total persons employed, while females represented 22.8%. In 1987-88, males employed full-time represented 56.8% of all employed persons, while females represented 21.8%.

EMPLOYED PERSONS, Tasmania (Trend estimates)

Casual employment has been a growth area in recent years. It can provide greater flexibility for balancing work, family, study and other commitments, but casual employees may not necessarily receive the same entitlements as their full-time, on-going colleagues. They may not have access to training or career advancement opportunities. Similarly, casual or part-time employees may encounter barriers to full-time employment such as lacking the necessary skills or experience for the jobs available or the jobs available may lack the flexibility required to accommodate their caring responsibilities. Removing such barriers will become increasingly important in attracting and retaining staff as the population continues to age.



GLOSSARY

Refer ABS Themes Page - Labour - Using Labour Statistics



REFERENCES

Australian Labour Market Statistics (ABS cat. no. 6105.0)
Australian Social Trends, 2008 (ABS cat. no. 4102.0)
Labour Force, Australia, Spreadsheets, October 2008 (ABS cat. no. 6202.0.55.001)
Labour Force, Australia, Detailed, Quarterly (ABS cat. no. 6291.0.55.003)
Labour Mobility (ABS cat no. 6209.0)
Labour Statistics: Concepts, Sources and Methods, 2006 (ABS cat. no. 6102.00.55.001)
Persons Not in the Labour Force (ABS cat. no. 6220.0)
Schools, Australia (ABS cat. no. 4221.0)
Standards for Social, Labour and Demographic Variables (ABS cat. no. 1200.0)
Underemployed Workers (ABS cat. no. 6265.0)
Yearbook Australia, 2008 (ABS cat. no. 1301.0)