Before importing migrants, utilise Australia’s 1.3m hidden unemployed

Treasurer Jim Chalmers has put fixing long-term unemployment as a priority on the government’s Jobs and Skills Summit agenda:

Despite the ultra-low 3.4 per cent unemployment rate, the share of jobless people who are long-term unemployed is at 26 per cent, up from 18 per cent a decade ago.

There were 127,900 long-term unemployed people in June this year, slightly higher than the 111,500 in June 2012.

A long-term unemployed person is defined as someone who spends 52 weeks or more out of work…

Dr Chalmers said: “The low unemployment rate hides the grim reality that too many Australians are still locked out of the jobs market with no way back in.

“Long-term unemployment is a tragedy with far-reaching and intergenerational consequences…

This is all well and good. But what about the army of hidden unemployed? According to the ABS’ Potential Workers survey, there were 1.8 million people not working but wanting work as at February:

Roy Morgan has also called on the Summit to address Australia’s army of hidden unemployed [my emphasis]:

“The latest Roy Morgan unemployment figures for July show there are 1.25 million Australians out of work and looking for a job (8.5% of the workforce) and another 1.27 million Australians who want to work more hours (8.6% of the workforce).

This means a total of over 2.5 million Australians (17.1% of the workforce) want to either work more hours or find a job – that is over 1-in-6 Australians in the workforce.

Remember, the ABS unemployment figures say there are only 3.4% of the workforce unemployed (474,000).

This is a difference of over 770,000 people!

Why is there such a difference?

The key reason is the way being unemployed is defined.”

How do Roy Morgan and the ABS define unemployment?

“Roy Morgan asks a person who is not in paid employment if they are looking for paid work.

If the answer is yes – Roy Morgan considers that person to be unemployed.

They aren’t currently working but they do want a job and they do want to work.

The ABS classifies a person as unemployed only if, when surveyed, they have been actively looking for work in the four weeks up to the end of the reference week and if they were available for work in the reference week. That means anyone out of work for say three weeks is never counted.

The ABS classifies a person as employed if, when surveyed, a person worked for one hour or more during the reference week for pay, profit, commission or payment in kind, or even if a person worked for one hour or more without pay in a family business or on a farm.

These restrictions cut down greatly on the number of people the ABS considers unemployed, and boosts the number of people employed, and explains the difference between the Roy Morgan and ABS unemployment figures.”

ABS ‘Potential workers’ annual release shows similar figures to Roy Morgan unemployment

“However, the monthly results published by Roy Morgan and the ABS are not the full story of Australia’s labour markets.

The ABS also publishes an annual survey on ‘Potential workers’ which much more accurately captures the true level of unemployment in Australia.

In late May 2022 the ABS released the latest version of this survey for the month of February 2022 – conveniently it was the week after the Federal Election and was largely ignored.

The ‘Potential workers’ survey showed there were 1.8 million ‘Potential workers’ in Australia and another 900,000 under-employed workers – over 2.7 million Australians either wanting to work or wanting to work more hours.

All these figures are clearly laid out within the release and in the chart you can see the ‘Potential workers’ who want to work but who are not considered as part of the labour force in dark blue.

The parts in light blue comprise the ABS monthly unemployed.

The remarkable aspect of this release is that the figures are so similar to those from Roy Morgan.

Without commenting on whether or not we should have more immigration, these extra potential workers should not be forgotten in the deliberations at the summit.

What’s needed is to match them with the jobs – retraining, relocation and community support.”

Before importing more migrant workers to solve purported ‘skills shortages’, potential workers that are already here should be utilised.