PARTICIPATION POTENTIAL

Labour force participation includes those persons of working-age in an economy who in the reference period are:

• employed; or
• unemployed but actively looking for a job and available to start.

By analysing the characteristics of those persons not participating in the labour force it can provide insights into Australia's potential labour force. This section analyses persons not in the labour force that are marginally attached, not marginally attached, discouraged job seekers, and employed persons that are underemployed and would like additional hours.

PERSONS NOT IN THE LABOUR FORCE

The persons not in the labour force framework below classifies persons aged 15 and over, who can be divided into those who are marginally attached to the labour force, and those who are not. Persons who are marginally attached to the labour force satisfy some, but not all, of the criteria required to be classified as unemployed.

Persons not in the labour force are considered to be marginally attached to the labour force if they:

• wanted to work and were actively looking for work (but, unlike unemployed persons, were not available to start work in the reference week); or
• wanted to work and were not actively looking for work but were available to start work within four weeks.

Persons not in the labour force are not marginally attached to the labour force if they:

• did not want to work; or
• wanted to work but were not actively looking for work and were not available to start work within four weeks.

The main activity reported for those not in the labour force varied by age. The main activity for those aged 15–24 years was attending an educational institution (12%), while for those 65 years and over, it was retired (32%). Across the other age groups (25 to 64 years), the most common main activity for males was own long term health condition or disability (12%). For females in the same age bracket, the most common main activity was home duties (15%). (Table 9)

MARGINALLY ATTACHED TO THE LABOUR FORCE

In February 2015, there were 1 million persons with marginal attachment to the labour force, 17% of those not in the labour force.

Of those with marginal attachment to the labour force:

• 64% were females;
• 94% were not actively looking for work, but were available to start work within four weeks;
• 31% were aged 15–24 years; and
• 22% had never had a job. (Table 10 & 11)

There were 825,100 persons with marginal attachment to the labour force who had worked before. Of these, 283,900 (34%) persons had worked less than 12 months ago, and a further 188,300 (23%) had worked one to two years ago.

The graph below outlines the main activity of persons with marginal attachment to the labour force. This shows there were 286,700 (27%) were attending an educational institution, followed by 218,300 persons on home duties and 215,700 persons caring for children (both 21%). (Table 11)

The number of persons who were marginally attached to the labour force but not actively looking for work and available to start work within four weeks, increased from 935,100 in 2014 to 989,500 in 2015. Of these persons, 761,100 indicated that they intended to, or might enter the labour force in the next 12 months. Of these:

• 64% were females;
• 10% were discouraged job seekers; and
• 10% had a job to go to. (Table 12)

WITHOUT MARGINAL ATTACHMENT TO THE LABOUR FORCE

There were 5.3 million persons aged 15 years and over without marginal attachment to the labour force. Of these:

• 59% were females;
• 52% were aged 65 years and over;
• 15% had never had a job;
• 84% reported that they did not want to work, or did not know if they wanted to work;
• 5% wanted to work but were not actively looking for work and were not available to start work within four weeks; and
• 11% were permanently unable to work. (Table 1 & 15)

Persons without marginal attachment to the labour force were predominantly made up of those who were retired (44%) as seen in the graph below. Followed by persons with an own health condition (15%), on home duties (13%) and attending an educational institution (12%). (Table 15)



DISCOURAGED JOB SEEKERS

Discouraged job seekers are those persons with marginal attachment to the labour force who wanted to work and were available to start work within the next four weeks but whose main reason for not actively looking for work was that they believed they would not find a job for any of the following reasons:

• considered to be too young or too old by employers (27%);
• believes ill health or disability discourages employers (7%);
• lacked necessary schooling, training, skills or experience (14%);
• difficulties because of language or ethnic background (6%);
• no jobs in their locality or line of work or no jobs at all (29%); or
• no jobs in suitable hours (15%).

There were 105,900 discouraged job seekers, of whom 55% were females.

Other selected characteristics of discouraged job seekers included:

• 16% never had a job;
• 71% intended to or might enter the labour force in the next 12 months, while 26% did not intend to enter the labour force in the next 12 months; and
• 34% were not currently looking for work but had looked for work in the previous 12 months. (Table 14)

UNDEREMPLOYED WORKERS

The ABS conceptual framework below for underemployment separates employed persons into two mutually exclusive groups:

• workers who are considered to be fully employed, comprising:
  • employed persons who worked full-time during the reference week (including persons who usually work part-time);
  • employed persons who usually work full-time but worked part-time in the reference week for non-economic reasons (including illness or injury, leave, holiday or flextime, and personal reasons); and
  • part-time workers (who usually work part-time and did so in the reference week) who would not prefer additional hours of work.
• workers who are not fully employed, comprising:
  • part-time workers who would prefer to work more hours; and
  • full-time workers who worked part-time in the reference week for economic reasons (such as being stood down or insufficient work being available).

The conceptual framework further defines workers who are underemployed, comprising:

• part-time workers who would prefer to work more hours and were available to start work with more hours, either in the reference week or in the four weeks following the survey; and
• full-time workers who worked part-time hours in the reference week for economic reasons (such as being stood down or insufficient work being available).

PART-TIME WORKERS WHO WOULD PREFER MORE HOURS

There were 3.6 million part-time workers, of whom 70% were females. Over a quarter (29%) of all part-time workers stated they would prefer to work more hours, an increase from 26% in February 2014.

Of the 1 million part-time workers who would prefer more hours:

• 61% were females;
• 53% would prefer to work full-time;
• 93% were available to start work with more hours;
• 49% would prefer to change employer in order to work more hours; and
• 42% would prefer to work an extra 10–19 hours each week. (Table 3)

UNDEREMPLOYED PART-TIME WORKERS

There were 960,700 underemployed part-time workers in February 2015, of whom 61% were female. Almost a quarter (23%) of underemployed part-time males and 15% of females reported that they would move interstate if offered a suitable job.

33% of underemployed part-time workers aged 15–19 had experienced insufficient work for one year or more. This compared to 55% aged 45–54 and 63% aged 55 years and over.

The most commonly reported steps taken to look for work or more hours, in the last four weeks, by underemployed part-time workers, were:

• looked at advertisements for jobs on the Internet in a newspaper or on noticeboards (41%);
• wrote, phoned or applied in person to an employer for work (34%); and
• asked current employer for more work (33%). (Table 7)

The most commonly reported difficulty in finding work¹ for underemployed part-time workers were:

• too many applicants for available jobs (18%);
• no vacancies in line of work (13%); and
• insufficient work experience (13%). (Table 7)

There were 62,900 underemployed part-time workers who did not have any difficulties in finding work and a further 470,100 who did not look for work or more hours. The preferred number of extra hours of underemployed part–time workers varied with the number of hours they usually worked, as seen in the graph below. Approximately 66% of those who usually worked less than 10 hours a week preferred to work 10 or more extra hours per week.

The mean preferred number of extra hours per week for underemployed part-time workers was 14.6 hours. The mean preferred number of extra hours was lowest for persons aged 15–19 years (12.7 hours), and highest for those aged 25–34 years (16.5 hours). On average, males preferred to work an extra 16.6 hours per week, compared with females who preferred to work an extra 13.4 hours per week. Males preferred more hours than females in all age groups. (Table 8)

End Note:
1. Reported difficulties in finding work refer to respondents perception in the reasons for not being able to find work.