Commentary and analysis of labour force data releases.

Australia labour force data – now a million underemployed

Today’s release of the – Labour Force data – for August 2014 by the Australian Bureau of Statistics revealed an extraordinary rise in part-time employment and a decline in unemployment. The results are suspicious as the ABS themselves acknowledge. Despite the massive increase in part-time employment, total working hours barely rose and the upshot was the underemployment jumped sharply. There are now more than 1 million workers in Australia who are underemployment. The broad labour underutilisation rate jumped from 13.5 to 14.6 per cent. Teenagers gained some of the part-time employment growth but full-time employment slumped further. The Government will be claiming the employment reversal is a vindication of their economic policy – but we will have to see if the sudden jump is sustained or is a statistical artifact.

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Why we should close the ‘unemployment industry’

This morning I gave a Keynote presentation to the Jobs Australia conference in Melbourne, which is a gathering of people who work in what I call the extra industry – the ‘unemployment industry’ – which has sprung up in the neo-liberal period to manage the unemployment that the government has deliberately created as a result of its obsession with fiscal austerity (trying to run surpluses when increased and on-going deficits are required). I take no umbrage with individuals who work in the ‘industry’ but its productivity is close to zero (you cannot search for jobs that are not there) and they have become co-opted servants of the pernicious government policy regime. The facts are clear – we have erected a massive corporate sector funded by government to manage the fiscal failure. The problem is that all these job service providers are not just shunting inanimate widgets around into so-called training schemes etc but are dealing with very disadvantaged people, which the capitalist system is excluding from the opportunity to engage in paid and productive work. The ‘unemployment sector’ is the Government’s front-line attack dog on the victims of the policy failure.

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Australian labour force data – policy failure now stark

Today’s release of the – Labour Force data – for July 2014 by the Australian Bureau of Statistics shows a deteriorating situation. The Australian labour market is weakening. While the participation rate rose by 0.1 points, which pushed extra workers into the labour force,the negative employment growth was well below the underlying population growth and so unemployment would have risen without the participation rate rise. In fact, unemployment rose sharply in July to 6.4 per cent. This is a terrible outcome. There are now 789 thousand officially counted as unemployed. Overall, the labour market is scudding along a very flat path and unemployment continues to eke its way up. The teenage labour market also weakened and in my view represents a national emergency. Overall, the policy failure at the federal level is now stark.

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Information is dangerous for neo-liberals

On Friday, I reported that a senior psychologist working in the off-shore detention centres was alarmed at the growing mental health problems of children of refugee-seeking parents who are detained with their families in these hell-hole prisons that Federal Government has set up in PNG and elsewhere. I noted the doctor had admitted to a National Inquiry that he was told by the Department of Immigration to take out some of the damaging research evidence covering the incidence of mental illness in the off-shore refugee prisons. Here is a followup of how systematic the government is in using its power to repress the release of information that might alter the public perception of its competence and desirability.

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Australian government now engaged in psychological torture of its citizens

This year marks the 50th anniversary of the US legislation – Economic Opportunity Act – introduced by Democrat president Lyndon B. Johnson. The law created the so-called local Community Action Agencies, which were directly regulated by the US Federal government. The aims of that legislation were relatively straightforward – “eliminate poverty, expand educational opportunities, increase the safety net for the poor and unemployed, and tend to health and financial needs of the elderly”. The legislation came out of the President’s – State of the Union Address – delivered on January 1964, where he made the famous statement “This administration today, here and now, declares unconditional war on poverty in America. I urge this Congress and all Americans to join with me in that effort”. The Economic Opportunity Act became known as the – War on Poverty. Times have changed. 50 years later, federal administrations around the World have declared a new type of War! The War on Poverty has become the War on the Poor. In Australia, this has manifested in recent weeks as an outright attack on the victims of mass unemployment – the unemployed. The Australian government has introduced what I have described in a number of press interviews with the national media as advanced psychological torture.

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Decomposing the decline in the US participation rate for ageing

Labour force participation rates are falling around the world signalling the slack employment growth that has accompanied the aftermath of the Global Financial Crisis. It is clear that many workers are opting to stop searching for work while there are not enough jobs to go around. As a result, national statistics offices considered these workers to have stopped ‘participating’ and classified them as being ‘not in the labour force’, which had had the effect of attenuating the official estimates of unemployment and unemployment rates. These discouraged workers are considered to be in hidden unemployment. But the participation rates are also influenced by compositional shifts (changing shares) of the different demographic age groups in the working age population. In most nations, the population is shifting towards older workers who have lower participation rates. Thus some of the decline in the total participation rate could simply be an averaging issue. This blog investigates that issue for the US after noting yesterday that there has been a massive decline in the participation over the course of the downturn in that country. But we also note that the aggregate participation rate has been in decline since the beginning of this century so there is probably more than cyclical events implicated.

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Australian labour market – unemployment rate higher than in crisis

Today’s release of the – Labour Force data – for June 2014 by the Australian Bureau of Statistics is slightly improved on recent months but still portrays a weak labour market. While the participation rate rose, which pushed extra workers into the labour force, employment growth still remained below population growth and so unemployment would have risen without the participation rate rise. The other poor outcome was the decline in full-time employment. Overall, the labour market is scudding along a very flat path and unemployment continues to eke its way up. The unemployment rate topped 6 per cent in June 2014 and is now higher than it was 5 years ago (June 2009) when the worst of crisis was being endured before the fiscal stimulus took effect. That symbolises policy failure.

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The ageing impact on Australian labour force participation rates

Labour force participation rates are falling around the world signalling the slack employment growth that has accompanied the aftermath of the Global Financial Crisis. It is clear that many workers are opting to stop searching for work while there are not enough jobs to go around. As a result, national statistics offices classify these workers as not being in the labour force, which had had the effect of attenuating the official estimates of unemployment and unemployment rates. These discouraged workers are considered to be hidden unemployment. But the participation rates are also influenced by compositional shifts (changing shares) of the different demographic age groups in the working age population. In most nations, the population is shifting towards older workers who have lower participation rates. Thus some of the decline in the total participation rate could simply being an averaging issue – more workers are the average who have a lower participation rate. This blog investigates that issue for Australia as part of a project aiming to get more accurate measures of hidden unemployment.

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Teenage employment decline in Australia reaching catastrophic proportions

Regular readers will know that for some years we have been documenting the parlous state of the youth labour market in Australia. In an environment where fiscal cuts are being justified as looking after the future as the population ages, the most glaring thing that will undermine our future prosperity is the lack of attention policy makers are giving to the youth unemployment problem. The media has only just started to register that our ‘future’ workers are growing into adults having never worked nor gained the requisite experience to deliver high productivity outcomes. The personal future of this cohort is bleak. Recently, the Brotherhood of St. Laurence as (finally) launched a national campaign My Chance, Our Future to “draw attention to the crisis of youth unemployment in Australia”. Better late than never I suppose but what took them so long.

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Changes to unemployment benefit entitlements – the work of sociopaths

The new conservative Australian government is scaling new heights in their attack on the most disadvantaged. The May Fiscal Statement was littered with nasty cuts, which reduce spending by trivial amounts at the macroeconomic level but which will have devastating effects to the recipients of the income support. Today I briefly look at the changes in the unemployment benefit regime that have been foreshadowed. Let us hope the Senate blocks them for good.

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