Underemployment in Australia

I’m working on a revision of a chapter on unemployment (its with Stephen Bell, and the book is the 4th edition of a text called Social Policy in Australia. One of the issues we’ve stressed in previous editions is hidden unemployment, particularly including underemployment.

I haven’t paid much attention to this issue in the last few years, focusing mainly on the set of issues usually tagged as “the future of work”. When I came back to it, I was surprised to find that, even though unemployment has been more or less stable for the last decade, underemployment has risen sharply, and is now at an all-time high of 8 per cent.

The increase is concentrated among 15-24 year olds. I have a few ideas about what might be going on here, but I thought I’d see if readers can point to any serious studies or, failing that, anecdotal evidence on the question.

10 thoughts on “Underemployment in Australia

  1. Loads of pointers to both serious studies and anecdotal evidence regularly covered here.

    On past evidence some reading here may not like reading there the assiduous coverage in part concerning the ongoing huge surge of migration into Australia, both permanent and “temporary”, and the clearly associated adverse impacts on numbers of young Australians employed.

  2. Underemployment doesn’t seem to be well-enough defined to draw many conclusions from the underemployment rate. An underemployed person is defined as someone who would like to be working more hours. But there is big difference between wanting to work 2 more hours and wanting to work 20 more hours.

  3. Greg Jericho has been banging on about it in the Guardian of late, and he’s pretty good on references. I get the impression a lot of it is ABS based. Have been reading but not really remembering the fine print.
    Anecdotally there seem to be a lot of post-school kids being propped up by nepotism, my boss is one of those 1% people and we have had quite of few of his kids friends and his friends kids working for us in menial roles after they finish university. Said kids all seem to have friends doing scutwork while they try to find proper jobs, but sadly many of them chose interest degrees rather than career training and it turns out even rich parents can’t get you an interesting job let alone career in todays society. (there is obviously a selection effect since the kids with careers are not going to turn up to put boxes on pallets in a factory. But it’s still more of them, more often, and they’re more expecting of it, than I am used to).

  4. Way back in the 1990s, I noticed that there actually seemed to be two opposite things going on together: under-employment (along with unemployment), and over-employment of many of those in work, i.e. they were having to work harder, usually in unmeasured ways. To me that suggested a bifurcation of the sort that often accompanies a phase change, and I knew that phase changes happen when some underlying mechanism reverses, which can show up when a curve describing behaviour reverses its slope (I’m not suggesting that the curve causes anything, just that it is a visible indicator). Then I went off looking for mechanisms that might be like that; though I found an interesting one, I couldn’t properly confirm that it supported my speculation. So over to you.

  5. This is a big issue. Even number of work hours isnt a good test. Almost every Uber driver I have had recently is working plenty of hours, but has a skills that should command significantly more money, such as computing skills or engineering skills, but they cant find work.

  6. The Uber Effect is carrying on and upending what was left of labour laws and employment laws. Uber are not alone, but now that Fair Work Australia has made it abundantly clear the relationship between Uber the company and Uber the driver is simple: the driver is an independent contractor, despite having a price for service that is essentially set by Uber the company.

    What I would like to know more about is how this affects the apportionment of risk, e.g. how is an Uber passenger covered if the driver has a nasty accident? What happens to the driver if they are injured, or their vehicle is totaled? Ans: if they weren’t paying for their own insurance (and paying a hefty premium when compared to the insurance a global company could get huge discounts on), presumably they are screwed. Loss of Income insurance for a gig job is probably another hefty premium for an individual to take out, compared with the workers compensation insurance a global company would take out if the drivers were employees.

    This wholesale shift in risk, i.e. the liability for dealing with injury/death of passenger(s), loss of income for the driver if injured or ill, inability to work adequate hours to have a working wage, the premiums with hefty margins—no bulk deal possible for an individual owner/driver, the difficulties with superannuation, and myriad other social, legal, political, and economic impacts now the full burden of the driver, well all this side-stepping of labour laws is a vast unpicking of our long term future as human beings in society.

    If it can be done in accordance with Fair Work Australia’s position on it, why wouldn’t more companies take this route now? To me, it seems that if laws are not changed now, to prevent and to undo some of this erosion of employee protections (and of the limited protections for the consumer of the service), it will soon be too difficult to change, for there will be too many companies relying on this dodge. Watershed moment, in my opinion.

  7. Why the substantial increase from from 4% thru to about 7% and then 7% base and rising from about 1988 – 1992?  From graph in “underemployment has risen sharply” abc link in op.
    abc.net.au/news/2019-05-02/underemployment-in-australia-rising-while-unemployed-rate-drops/11057794

  8. Does this means a lot of casual Uber drivers are now going to get in trouble with Centrelink? One thing Centrelink appears to despise is unemployed people working for themselves. My impression is they think it should be stamped out like a cigar butt in an oil refinery.

  9. How do you pull data JQ? Individual queries to single government department? Seperate inconsistant individual csv files needing matching? Painful.

    This may be a… time saving for your research JQ?. By a piece of code / bot.

    https://tradingeconomics.com/australia/youth-unemployment-rate

    And here is how it is done…
    “The Trading Economics Application Programming Interface (API) provides direct access to our data. It allows clients to download millions of rows of historical data, to query our real-time economic calendar and to subscribe to updates.”
    https://tradingeconomics.com/api/

    Here is the bots code – Trading Economics Application Programming Interface (API). 
    https://github.com/tradingeconomics/tradingeconomics

    API, code and available fields, countries etc.
    http://docs.tradingeconomics.com/#historical

    Anecdote!

    And here is a bot writing bitcoin articles making the journo’s $+*%scared.[ Note; written by a piece of code – a bot called ‘Satoshi Nakaboto’ which says “hello” to Aaron Patrick of the Fin ]

    “Welcome to another edition of Bitcoin Today, where I, Satoshi Nakaboto, tell you what’s been going on with Bitcoin in the past 24 hours. As Foucault used to say: Time is money!”

    And this bot’s article was “yesterday’s most upvoted Reddit post about Bitcoin: 

    “Me waiting for the Bitcoin halving

    “A community dedicated to Bitcoin, the currency of the Internet. Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. You might be interested in Bitcoin if you like cryptography, distributed peer-to-peer systems, or economics.”
    https://www.reddit.com/comments/cyfw24/

    Plenty of api collaborators close to you JQ:
    https://www.uq.edu.au/search/?q=Application+Programming+Interface+%28API%29&submit=%EF%80%82&output=xml_no_dtd&client=ws&proxystylesheet=ws

    Plenty of papers and analysis. Best search term I used was the title of your chapter JQ:
    ‘Unemployment, Underemployment and Labour Market Insecurity’

    I assume you are well aware of Jeff Borland.
    “March 2016: What has caused the growth of under-employment of labour in Australia?”
    https://drive.google.com/file/d/0B_H1wGTm98W3WVozb1pZcnQ5a00/view?usp=sharing

    Even student economists have an opinion;
    “Therefore, targeting the skills of young job-seekers is the most direct means of enhancing the probability of success in the labour market.”
    http://economicstudents.com/2014/09/the-layered-reality-behind-youth-employment/

  10. I suspect the growth in underemployment is largely a side-effect of our economy generating lots of part-time jobs over the past few decades. We have one of the highest rates of part-time employment in the OECD. The Netherlands surpasses us, but their part-time jobs tend to be “long hours” part time work, whereas ours tend to be “short hours” part-time jobs, leaving many part-time workers wanting more hours.

    The demographic concentration is interesting: are these mainly young people in higher education doing casual jobs and saying, in effect, “yeah, I wouldn’t mind an extra shift at the bottle-o if one were offered”?

    In response to Smith9, underemployment is defined fairly clearly, and I think you can get access to both headcount and hours measures of the phenomenon.

    BTW, I thought “hidden unemployment” and “underemployment” were generally seen as two distinct phenomena. Add them together, throw in unemployment, and you’ve got yourself a measure of labour utilisation more generally (and again, this could be done on a headcount or hours basis). The term ‘hidden unemployment’ was much used by labour market economists but never had the official endorsement of the ABS (nor the ILO). From the early 1980s, the ABS spoke of those ‘marginally attached’ to the labour force. Now, I think, they speak of ‘potential available jobseekers’.

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