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MAHATMA GANDHI ~ Truth never damages a cause that is just.
Tuesday, 14 August 2018
Underemployment is growing, and there is no easy policy fix
‘For most job seekers the biggest change since the GFC has been the increase in competition for each job’.
Photograph: Lukas Coch/AAP
Annual data from the bureau of statistics
on the labour force shows that more than one million workers last year
changed jobs, with many changing occupations and industries. It also
shows that the level of workers who are satisfied with the number of
hours they are working each week is continuing its 45 year downward
trend.
One of the commonly forgotten aspects when we look at the monthly
employment figures is that not all new employment is to a person who was
previously unemployed or out of the workforce. Each month a significant
number of people change jobs.
In the 12 months to February 2018, more than a million workers
changed jobs. But while that number appears massive, somewhat contrary
to the narrative that people are more likely to work numerous jobs than
in the past, the data suggest that people are now more likely to be
sticking with the same employer.
Just 8.1% of the 12 and half million employees changed jobs in the past year – well down on the record 19.5% in 1989.
Over two thirds of those who changed jobs did so to change the number
of hours – although only around a third changed from part-time to
full-time or vice-versa. And more than half not only changed industries
but also their occupation:
The
experience of searching for more hours is something that workers are
very much aware of – and definitely more so than in the past.
What this annual data highlights is the great change in the basis of work since the 1960s.
In 1962 almost all workers – whether working full-time or part-time –
were happy with their hours. From the early 1970s through to the end of
the 1980s this level of satisfied workers trended down – both due to
economic downturns throughout much of the 1970s and the early 1980s
recession, and the influx of women workers into the labour force.
The 1990 recession saw a major fall in the number of satisfied
workers, and while the period of strong economic growth in the 1990s and
early 2000s saw the level improve, it has never returned to the
pre-1990 levels.
But then once the GFC hit the level of satisfied workers again fell –
to be now at a near record low, having improved slightly from the low
point in 2017:
The figures show that men are generally more satisfied with their
hours than are women – but that both genders are less satisfied than in
the past:
But
the data also suggests that a major part of the decrease in
satisfaction and the subsequent increase in underemployment is due
mostly to the increase in overall part-time work by both genders.
In 2018, underemployed part-time workers accounted for just under 9%
of all workers, which was well above the 6.6% level of 1993. But 1993
was the year that recorded the highest ever level of part-time workers
who were underemployed. In that year 28.1% of part-time workers wanted
more hours, compared to 26.4% in 2018:
It highlights the difficulty with tackling underemployment – it is
not that part-time workers are suddenly wanting more hours than in the
past, it is that part-time workers make up a larger share of workers
than in the recent past.
The percentage of both men and women part-time workers who are
underemployed is actually little changed from 2009 despite during that
time underemployment levels overall have risen:
Interestingly
men part-time workers are more likely to be after more hours than
women, and men are also more likely to want to move into full-time
employment than are women:
The annual data also gives some insight into the numbers of people
who are marginally attached to the workforce – those who are not
technically unemployed because they are not actively looking for work.
There is a suggestion by some that not including such people in the
labour force figures hides the true level of unemployment. But what the
data shows is that the percentage of such people has not changed
significantly at all in recent years and is, if anything, lower than in
the past.
Including
such people in the total of the unemployed would certainly increase the
unemployment rate (up to around 12%) but it would not suggest any
difference in the change over the past decade:
And while it is important to track the level of disaffected job
searchers, mostly this can be done through changes in the participation
rate. Certainly the search for work can be so difficult as to drive
people to give up. The data however suggests that people have slightly
less difficulty now than in the past:
For most job seekers the biggest change since the GFC has been the
increase in competition for each job – 17% said in 2018 that was the
main difficulty in finding work, compared to just 8% in 2008:
The annual data of labour force participation gives us a chance to
take a long-term view of how the economy has changed for workers. It
presents a picture that shows that the solutions to issues of
underemployment are rather complex.
While the level of underemployment has grown, the data shows that
part-time workers overall are not becoming more eager to work more
hours, just that there are more part-time workers now than in the past
This presents challenges for policy makers seeking to reduce
underemployment as it requires tackling large scale changes in the
economy rather than hoping to see employers of part-time workers
increase their hours, through better economic growth (or lower company
tax). It will require arresting the major shift of the past 45 years of
work going from full-time to the more flexible but less satisfying
part-time. • Greg Jericho is a Guardian Australia columnist
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