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- Trends in long term unemployment
- Who are the long term unemployed?
- How skilled are they?
- How many hours would they prefer to be working?
- Difficulties in finding work
- Steps taken to find work
- Pathways into long-term unemployment
- Government pensions and allowances
- Looking ahead
- Discouraged job seekers
- Long-term unemployment and health
- International comparison
- Comparing unemployment and the claimant count
- Data sources and information
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Footnote(s): (a) People unemployed for 52 weeks and over as a proportion of thelabour force. (b) Break in series at April 2001 due to changes in methodology. For more information see Explanatory Note 18 in ABS Labour Force, Australia (cat. no. 6202.0).
People who are unemployed for long periods of time may experience economic hardship and be at greater risk of poverty than those unemployed for shorter periods. They can also miss out on the networks and social interactions that employment can offer, while low income and lack of access to the job-market can lead to disadvantage and in turn social exclusion.(Endnote 1) Families with members who are unemployed for a year or more (long-term unemployed) may also be negatively affected, and there is concern that this may contribute to intergenerational disadvantage.(Endnote 2)
What’s more, the longer people are unemployed, the harder it may become to return to, or gain, employment. This can be related to the gradual loss of social or workplace networks, relevant skills, confidence, motivation or because of employers' negative perceptions of their 'employability'.(Endnote 3)
Long-term unemployment places a strain on the economy because of people’s reliance on government pensions or allowances.
TRENDS IN LONG-TERM UNEMPLOYMENT
Australia’s unemployment rate peaked soon after the economic downturn of the early 1990s. Since then it has generally declined, with only three notable increases - the biggest in mid-2009 around the time of the global financial crisis.
The long-term unemployment rate shows some of the same patterns as the general unemployment rate - peaking in the early 1990s and generally declining since.
However, the long-term unemployment rate was less volatile over the period, not showing the same peaks and troughs as the general unemployment rate.
The long-term unemployment rate was, like general unemployment, at an all-time low throughout most of late 2007 and 2008 (0.6%), although both increased going into 2009. While unemployment started to decline again in late 2009, long-term unemployment has not shown the same pattern, appearing relatively stable over the 12 months to June 2011 (at 1.0%).
As a ratio to unemployment
In January 1994, following the recession of the early 1990s, one in three (34%) unemployed people were long-term unemployed. The ratio for men (38%) was higher than for women (28%). A decline over the following years in long-term unemployment numbers relative to general unemployment saw a decrease in the long-term unemployment ratio. By February 2009 just over one in eight (13%) unemployed men and women were long-term unemployed.
Since then, the long-term unemployment ratio has risen and in June 2011 it had increased to one in five (20%) and a small difference had reopened between men (21%) and women (19%).
LONG-TERM UNEMPLOYMENT RATIO(a): TREND(b)
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Footnote(s): (a) People unemployed for 52 weeks or more as a proportion of all unemployed people. (b) Break in series at April 2001 due to changes in methodology. For more information see Explanatory Note 18 in ABS Labour Force, Australia (cat. no. 6202.0).
WHO ARE THE LONG-TERM UNEMPLOYED?
In 2010-11, there were on average 116,700 long-term unemployed people, and over half (56%) were men. In comparison, 52% of all unemployed people were men.
While around two-thirds (66%) of the long-term unemployed were aged 15-44 years, the long-term unemployed did tend to be older than the general unemployed population (33% were aged 45-64 years compared with 22% of the total unemployed).
Many people (45%) who were in long-term unemployment had in fact been unemployed for two years or more. Most of these people were men (58%), and most were aged 15-44 years (60%).
The annual average long-term unemployment rate for 2010-11 was 1.0%, and this represented around one-fifth (19%) of the unemployed population (the long-term unemployment ratio). While the rate was similar between men (1.0%) and women (0.9%), there was a slight difference in the ratio (21% for men compared with 17% for women) and there was further variation across age groups.
LONG-TERM UNEMPLOYMENT RATE(a) AND RATIO(b) BY AGE AND SEX: ANNUAL AVERAGE - 2010-11
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Footnote(s): (a) The proportion of the labour force who were long-term unemployed.
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Footnote(s): (b) The proportion of the unemployed population who were long-term unemployed.
The long-term unemployment rate was highest for people aged 15-24 years (1.5%, compared with around 0.8% for most other age groups). However of all age groups, they had the lowest long-term unemployment ratio (13%), due to high overall unemployment for young people.
In older age groups, long-term unemployment rates were fairly consistent at around 0.8%, except for men aged 55-64 years where the long-term unemployment rate increased to 1.2%.
Generally, the older unemployed people were, the more likely they were to have been in long-term unemployment. In 2010-11, one-third (33%) of unemployed people aged 55-64 years were long-term unemployed. This compared with 22% of those aged 35-44 and 13% of those aged 15-24.
In 2010-11, New South Wales had a high long-term unemployment rate (1.1%) and ratio (22%) while Western Australia (0.6% and 14%), the NT (0.4% and 15%) and the ACT (0.4% and 11%) had both low rates and ratios.
Within the states, there was also a difference in long-term unemployment between the capital city and the balance of the state. The long-term unemployment rate was slightly higher outside the state capitals (1.2%) than within them (0.9%). The long-term unemployment ratio was also slightly higher outside state capital cities (22% compared with 18%).
At a regional level, some of the highest rates of long-term unemployment, over double the national average, could be found in the Statistical Regions of Far North (Qld), Fairfield-Liverpool (NSW), and Northern Adelaide (SA).
Fairfield-Liverpool (NSW) was also a region with a high long-term unemployment ratio (34%), with one-third of all unemployed people in long-term unemployment. North Western and Central Western (NSW) - which includes towns such as Armidale, Dubbo and Bathurst - and Central Highlands-Wimmera (Vic.) were also regions where a large proportion of unemployed people were long-term unemployed (31% and 29% respectively).
SELECTED REGIONS OF HIGH LONG-TERM UNEMPLOYMENT (LTU); ANNUAL AVERAGE - 2010-11
In different types of households?
Long-term unemployment has the potential to impact upon not just the individual concerned, but also their families. Children with unemployed parents may face additional challenges and may see a negative impact upon their education and future prospects.(Endnote 2) In this context it is important to see what kind of Australian households are most likely to be affected by long-term unemployment. One group with a high rate of long-term unemployment were non-dependent male children aged 15 years and over living with their parents. Their long-term unemployment rate was two and half times the average (2.5%, with a ratio of 23%). Lone mothers also had a high rate of long-term unemployment (2.4% and a ratio of 26%). Men living alone had a relatively high rate of long-term unemployment (1.7%), and a relatively high long-term unemployment ratio (30%).
While people in couple relationships (with or without children) had a low long-term unemployment rate (0.5%), the sheer size of this group meant that it made up one-third (33%) of all long-term unemployed people.
HOW SKILLED ARE THEY?
While not all jobs require vocational or higher education, having such qualifications may provide people with the skills and knowledge that can help them obtain employment.
The ABS Job Search Experience Survey shows that in July 2010, around half of long-term unemployed people (49%) had not attained Year 12 or above as their highest educational attainment. This compared with around two fifths (41%) of people who had been unemployed for less than 12 months and with around one-quarter (24%) of those who had started their current job in the last 12 months.
HOW MANY HOURS WOULD THEY PREFER TO BE WORKING?
Many long-term unemployed would prefer to be working full-time hours.
In July 2010, three-quarters (75%) of long-term unemployed men and half (50%) of long-term unemployed women stated they would have preferred to have been working full-time hours (35 hours or more per week).
DIFFICULTIES IN FINDING WORK
The most common difficulty in finding work reported by long-term unemployed people was that there were too many applicants for the available jobs (54%). This was also the most common difficulty cited by people unemployed for a shorter period (47%).
Long-term unemployed people were more likely than those who had been unemployed for a shorter period to cite insufficient work experience (46% compared with 33% of short-term unemployed), lack of necessary skills or education (40% compared with 29%), and more likely to say that a job was too far to travel or they had transport problems (34% compared with 18%). They were also twice as likely to have cited their own health or a disability as one of the difficulties they faced in finding work (26% compared with 12%).
STEPS TAKEN TO FIND WORK
Long-term unemployed people may undertake a variety of steps to find work. In July 2010, some of the most common steps taken included looking at ads for jobs in a newspaper (91%); or on the Internet (77%); and writing, phoning, or applying in person to an employer for work (87%).
These were also common steps for those who were only unemployed for a shorter period (77%, 78% and 84% respectively). They were also some of the most common steps for those who had started their current job in the last 12 months and who had been looking for work prior (48%, 62% and 70%).
Where the steps taken to find work by the long-term unemployed population differed the most from these other groups was in the proportion who reported registering or checking with Job Services Australia (JSA) and/or Centrelink. In July 2010, around three quarters (77%) of the long-term unemployed had registered with Centrelink as a job seeker, two-thirds (66%) had registered with a JSA provider and a similar proportion (65%) had checked with a JSA provider. These rates were almost double those for people unemployed for a shorter period, and around four times as high as those for people who had started their current job in the last 12 months and who had been looking for work prior. Despite this, there were still 14% of the long-term unemployed who had not registered/or checked with a JSA provider, with another employment agency, or registered as a job seeker with Centrelink.
PATHWAYS INTO LONG-TERM UNEMPLOYMENT
Long-term unemployed people were more likely than the short-term unemployed to have lost their last job (mostly through being laid off, retrenched, or because the job was temporary or seasonal) rather than having left it (either for unsatisfactory work arrangements or for other reasons such as returning to studies). Of those who were long-term unemployed, almost three-quarters (72%) had lost their last job while around a quarter (27%) had left their last job.(Endnote 4) This compared with 57% of short-term unemployed people having lost their last job and 43% having left their last job.
GOVERNMENT PENSIONS AND ALLOWANCES
In 2009-10, almost all (96%) of households with at least one long-term unemployed person had received some form of government pension or allowance in the previous financial year. Newstart allowance was one of the most common payments, with around half (53%) of these households having someone who received this payment.
In 2009-10, nearly three-quarters (71%) of households with at least one long-term unemployed person had at least 20% of their household income coming from government pensions or allowances, and over two-fifths (43%) had at least 90% of their household income coming from these sources. This financial dependence was less common for households without any long-term unemployed people. Around one-third (34%) of these households had at least 20% of their household income coming from government pensions or allowances.
Despite a recent peak, for almost eight years Australia’s unemployment rate has been lower than at any other time within the last quarter of a century. This indicates an economy with a high demand for workers. In this context, people in long-term unemployment may be presented with more opportunities now than ever before to overcome barriers to their employment.
In the 2011-12 Australian Government Budget two measures, costing $227.9 million, were announced that aim to specifically target the Very Long Term Unemployed (VLTU). One measure increases the obligations of VLTU job seekers to participate in activities designed to help them secure a job (increasing required participation from 6 to 11 months in a year). The second measure is a new wage subsidy that is designed to encourage employers to take on VLTU job seekers.(Endnote 5)
1. Australian Social Inclusion Board, A Compendium of Social Inclusion Indicators: How’s Australia Faring?, Canberra, p. vii, <www.socialinclusion.gov.au>.Kalil, A., 2009, “Joblessness, family relations and children’s development” in Family Matters, No. 83, Australian Institute of Family Studies, <www.aifs.gov.au>.Australian Social Inclusion Board, A Compendium of Social Inclusion Indicators: How’s Australia Faring?, Canberra, p. 29, <www.socialinclusion.gov.au>.Excluding those who had never worked, whose last job was for less than two weeks or was more than two years prior.Department of Education, Employment and Workplace Relations, “Building Australia’s Future Workforce: Very Long Term Unemployment” factsheet within the Budget 2011-12 section of DEEWR’s website, <www.deewr.gov.au>.
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