At any given time, there is a proportion of the population over the age of 15 who are not working. Some want to work, while others do not. Recent Australian Bureau of Statistics figures show that earlier this year the proportion of that population grew to a size that has several economists sounding alarm bells.
There are two possible reasons that millions of Australians are on the workforce sidelines. The first is the “system” actively pushes people out of the jobs market. The second is that its simply too soul-destroying being unemployed, as the ABS defines it, for months or even years on end.
In Feb 2021 the stats revealed 2.2 million were not employed and wanted to work and that was long after the first lockdown and before the even longer second lockdown. Of those 2.2 million, 808,000 were looking for work. This is the group that falls under the accepted definition of “unemployed”.
But the data also reveals 1.81 million did not look for work. That is, there were more than a million Australians who were not in work, could work and wanted to work, but did not look for a job. Also, over three quarters of these candidates were available to start immediately or within four weeks.
The numbers raise a critical question: what’s stopping folks who are perfectly willing and able to land a job from finding work?
Life Gets in the Way
A key reason many Australians are finding themselves on the jobs market sidelines is simply because they’re too busy with life or study. Unemployed graduates make up a big chunk of the group.
Why People aren’t looking for work | Reason & Statistic
- Attending an educational institution: 223,000
- Childcare: 127,600
- Family commitments/Caring: 176,000
- Discouraged Job Seekers: 103,000
- Ill Health/Injury or disability: 110,000
- Had a job to go to or return to: 68,400
- Other: 52,300
It still takes a graduate on average 2.6 years to find their first full time job, they might still be living at home making decisions on whether they undertake further post graduate studies or they’re taking part in other forms of work, as they patch their way into full-time. But childcare is also proving a sticking point and mostly for women. Parents must weigh up the benefits of receiving income from paid work compared to the cost of having their children in day-care for one, two or five days per week.
Fed Up with Looking
It’s possible the reasons mentioned so far don’t come as a shock to you but the next reason many are finding themselves out of the job market is more disturbing. Have you ever stopped to consider what’s required of you to receive unemployment benefits from the government? The process has the potential to be gruelling and soul-destroying. The whole 20 jobs a month you must apply for a year or more and the impact that has on self-esteem and just your view of yourself.
Those who find themselves out of work have, on average, three months to land a new job before the likelihood of finding more work falls dramatically. Beyond three months there’s a drop, beyond six months there’s another one and beyond 12 months your chance of being employed is halved.
This can be due to prejudice from employers who will wonder about the gaps in your resume as the further we move away from lockdown, the less inclined they will be willing to accept that as a reason for your lack of employment.
Opting Out Altogether
Many Australians decide to go without payments from Centrelink, they could be delving into savings, be independently wealthy or simply come from a dual income family where their partner is the main bread winner so don’t have the pressure to find something straight away or if at all. Some have made excellent investments over the years, own multiple rental properties or have extended family to help support them.
In other words, economists say the data points to an extraordinary number of Australians who are educated, skilled up and have financial resources to draw from, who are waiting for the right job to come along.
But we’re still missing something.
There’s a separate group of people who economists say have been punished by what they describe as a harsh unemployment welfare system. They argue that unemployment benefits act as a disincentive, or an impediment, to finding work. For example, a job candidate without any savings to draw on is going to find it challenging buying a new shirt for an interview, or even travelling a long distance to get to that interview.
Our system now doesn’t support people to get back to work in any meaningful way.
The “Actual” Unemployment rate
Is it fair to spruik Australia’s unemployment rate as “the lowest in 12 years”? Research house Roy Morgan has its own measure of unemployment. In addition to those who were unemployed, 1.18 million Australians (8.2% of the workforce) were under-employed- working part-time but looking for more work. The same figures and referenced an underutilisation rate-which combines the unemployment rate with the underemployment rate- at over 20%.
The official unemployment rate is just the tip of the iceberg, underneath that iceberg is a great chasm of people falling behind in the labour market that’s failing to put them into jobs. As for the headline rate, Roy Morgan has an Australian unemployment rate of 9.5%. Unlike the ABS Roy Morgan counts all those who want to work, rather than just those actively looking for a job, as unemployed, explaining the much higher figure.
We know job seekers have been opting out of the jobs market recently, but we’ve assumed, haven’t we, that many of these people don’t want to work? Even before it became physically challenging to look for work, it appears millions of Australians just itching for a chance to contribute to working life were either forced back into joblessness by the system or found work and life too difficult to juggle. It is clear though that Australia has a considerable untapped capacity.