Tag Archives: unemployment

True Unemployment At 13%, New ABS Measure Reveals

11 Jul

As anyone with two functioning brain cells surely knew already, the “official” unemployment figure — just like the “official” CPI inflation figure — is a farce.

No. Scrap that.

A deliberate deception.

From the Daily Telegraph:

REAL unemployment is double the official figure – with 13 per cent of Australia’s workforce wanting a job or longer hours.

The Australian Bureau of Statistics (ABS) yesterday released a new analysis that combines the official unemployment rate with “discouraged” jobseekers, the “underemployed” and those who want to start work within a month, but cannot begin immediately.

The 13.1 per cent rate of “extended labour force under-utilisation” in August 2012 was more than double the official unemployment rate at the time of 5 per cent.

The ABS counts people as employed even if they only work an hour a week.

But the new measure also counts underemployment – workers in part-time or casual positions who want a permanent job or longer hours.

And it includes those “discouraged” jobseekers who want to work but have given up looking because employers consider them to be too old or too young, if they are ill or disabled, lack the necessary training or experience, cannot find a job locally or in their line of work, or cannot speak English well.

The ABS report shows the labour under-utilisation rate fell steadily between 2001 and 2008 but “increased sharply” when the global financial crisis hit in 2009, from 10.6 per cent to 14.3 per cent.

The ABS report said the under-utilisation rate gave a “more comprehensive picture” of the state of Australia’s workforce than the pure jobless rate.

The “pure” jobless rate?!?! One (1) hour a week is not “jobless”?? You’re kidding, right?!

More at the link.

This revelation is so patently obvious, that my only response is a question.

Any particular reason why you have chosen to admit this now?

Under-Lying: The Truth About Jobs Data

9 Mar

Doubtless even here in little ol’ Australia, the economic pimple down on the world’s bum, you will be regaled with news stories heralding the “unexpected” improvement in US employment. That, along with the US stock market index continuing to record all-time highs, may begin to convince you that the GFC is ending, that the world economy is on the up and up, that “She’ll be right mate” … and maybe now is a good time to go out and buy a house debt-slavery commitment to a bank, or something.

Er. Not so fast.

As usual with government statistics – especially increasingly desperate government statistics – there is a whole lot more to the story than the con-fidence inspiring headlines and “expert” talking head commentary.

From Zero Hedge:

The media’s ecstatic read through of today’s Nonfarm payroll beat can barely end: after all, a print of 236,000 on expectations of 165K, why that has to be great. Well, it is. Until one looks to the number from February 2012, which happens to be 271,000.

And even the Keynesians will agree that February follows January, which in 2013 was a downward revised 119,000. January 2012? 311,000. Which in turn happened just as Europe was fixed again – after all who can forget the LTRO euphoria (and what happened after).

In other words, the first two months of 2012 saw a 582,000 increase in non-farm payrolls. In 2013: 355,000. But something else happened between February 29, 2012 and February 28, 2013… Oh yes, the US government issued some $1,198,397,883,967.30 in debt. Oh, and the Fed monetized about half of this amount, and virtually all of the Treasurys issued to the right of the ZIRP period (i.e., risky debt).

Jan + Feb jobs

To summarize: $1.2 trillion in debt buys the US…. 61% of the jobs created a year ago. But at least the Dow Jones is at an all time high.

Who else can hardly contain their excitement at what the jobs number a year from today will reveal that yet another $1.2 trillion in debt will do to the US job market…

The other point to note about the US jobs data is this. The much-quoted unemployment percentage (now 7.7%, allegedly) is essentially determined by two figures.

The number of people out of work.

Divided by…

The total number of people in the “labour force”.

And how is the “labour force” defined?

…everyone of working age, typically above a certain age (around 14 to 16) and below retirement (around 65) who are participating workers, that is people actively employed (either part-time or full-time) or people actively seeking employment. People not counted include people who are not employed and not seeking employment including students, retired people, stay-at-home parents, and people in prisons or similar institutions.

The “participation rate” is a critical component in the headline-grabbing unemployment percentage rate; a key “economic indicator” that politicians claim credit for when it falls, and pass-the-buck when it rises.

The more people who are considered to be not participating – that is, the lower the participation rate –  the easier it is for the government to claim a fall (improvement) in the unemployment rate.

Here is the latest US Federal Reserve chart for the participation rate in the USA:

Screen shot 2013-03-09 at 9.35.22 AM

The US labor force participation rate has been plummeting ever since the GFC began (the last grey vertical line on the chart). Under-lying the latest unemployment figure, some 130,000 dropped out for one reason or another. Typically, having given up looking for a job due to bleak prospects.

So, a key contributor to the “great” US jobs “result” – which Zero Hedge has debunked above – is more people giving up hope of getting a job.

In Australia, the story is somewhat similar. As usual, by comparison with the northern hemisphere, we are simply a little behind their curve:

Screen shot 2013-03-09 at 9.53.23 AM

However, the overall trend is the same:

While the participation rate, the percentage of people either in work or looking for work, for the workforce hit five-year lows of 65.2 per cent by the end of last year…

Our participation rate would be even worse, except for one thing – the number of older Australians who have been forced to try and return to the workforce; doubtless thanks to Australia’s ever rising cost-of-living, and, having seen their retirement nest eggs crushed, first by the GFC stock market crash, then by central banks’ low interest rate policies crushing their returns on “safe” fixed income investments:

A shifting workforce has also seen a record number of seniors in Australia’s jobs market.

a record number of people aged above 65 – 12 per cent – are entering the job market, the Bureau of Statistics data showed.

The average participation rate for those above 60-years-old was also at a record-high of 53.4 per cent.

Screen shot 2013-03-09 at 9.58.29 AM

Another vital trend to note concerning our “shifting workforce”, is that more workers are getting fewer hours of work:

Australians are working an average of 32 hours a week, the lowest in over 30 years, detailed labour force data released by the Bureau of Statistics yesterday show.

But what looks like a reinforcement of a stereotype that Australians are living the good life rather than working hard is instead a reflection of a longer trend away from full-time towards part-time work…

Screen shot 2013-03-09 at 10.11.32 AM

“We know that over the last 12 to 18 months, conditions have been very tough on the economy and activity has been sluggish, especially for the retail sector,” said Commonwealth Securities economist Savanth Sebastian, who pulled the figures together.

“As a result, while businesses are planning for a future turnaround and holding on to key staff, they are trying to maintain a lower cost base and that means cutting hours back, even for some of those full-time workers.”

This is the truth under-lying official jobs and unemployment data.

To tell a headline lie, all that is needed is to massage the truth underneath.

In the case of employment figures, by simply ignoring the increase in “job-creating” public debt … and ignoring all those who have lost hope.

My hat tip to reader Kevin Moore for the following apropos quote:

“Just look at us. Everything is backwards, everything is upside down. Doctors destroy health, lawyers destroy justice, psychiatrists destroy minds, scientists destroy truth, major media destroys information, religions destroy spirituality and governments destroy freedom.”

― Michael Ellner

Economy Begins A Swan Dive

3 Feb

Unemployment data for January 2012 from Roy Morgan Research is out.

For those brave enough to peek between their fingers clasped over the eyes, here’s a chart to give you nightmares:

Click to enlarge

In Roy Morgan Research’s own words (emphasis added):

  • Unemployment was 10.3% (up 1.7% since December 2011) — an estimated 1,278,000 Australians were unemployed and looking for work. This is Australia’s highest ever number of unemployed as reported by Roy Morgan and is also Australia’s highest unemployment rate for a decade — since January 2002 (10.9% — 1,075,000).
  • A further 7.5% of the workforce* were working part-time looking for more work (underemployed) — 934,000 Australians.
  • In total a record 17.8% of the workforce, or 2.21 million Australians, were unemployed or underemployed.
  • The Australian workforce* in January was at a record high 12,429,000, up 383,000 since January 2011 — comprising 7,681,000 full-time workers (up 106,000); 3,470,000 part-time workers (down 53,000) and 1,278,000 looking for work (up 330,000).
  • The latest Roy Morgan unemployment estimate of 10.3% is now almost double the 5.2% currently quoted by the ABS for December 2011.

Now, you may be wondering why Roy Morgan stats are so much higher than the Australian Bureau of Statistics (ABS) data.

You know. The “official” statistics agency that is quoted exclusively by government politicians, and parroted by their PR agencies … ummmm, the media.

A few hints:

1. The ABS is a government agency.

2. See 1.

3. You have to run up and down the street naked, waving your hands wildly and shrieking “I don’t have a job!!” for weeks to be counted as unemployed by the ABS.

More seriously, academic economist Bill Mitchell has written a very lengthy, detailed article about the differences between ABS and Roy Morgan methodology here.

In a nutshell:

“...the real difference is that [Roy Morgan] do not apply an activity test as strictly as the ABS and thus include a number of workers which we might consider to be “hidden unemployed” as per the previous discussion.

The Roy Morgan method asks whether the person who is “not employed if they are actually looking for a paid job (regardless of whether they’ve looked in the last four weeks)” and so they include the ABS official unemployed plus some estimate of the hidden unemployed…

In other words, Roy Morgan Research data is a broader measure of employment (or lack thereof).

So which one to believe?

Here’s Bill Mitchell again (emphasis added):

“The broad rule of thumb that economists such as me use to provide an estimate of the state of the labour market is to double the official unemployment rate and then add some for hidden unemployment.”

Now you know why “word on the street” amongst we average folk has been that unemployment is on the rise, while the government continues to downplay ever increasing job losses.

About that budget surplus Wayne … Wayne?

*crickets*

But But But … Wayne And Julia Promised MORE Jobs

23 Dec

Oh what a tangled web we weave!

Wayne Swan, May 2 2011:

“We created 750,000 jobs since we came to office … and we will create half a million more in the next two years”.

Julia Gillard, December 2 2011:

“We are on track to create 300,000 new jobs over the next two years

Roy Morgan Research, December 6 2011:

# In total in November 2011 an estimated 1,982,000 (16.3%) of Australians were unemployed or ‘underemployed.’ This is up 108,000 (0.6%) on October 2011 and up 355,000 (2.6%) since November 2010.

# The latest Roy Morgan unemployment estimate is 3.4% above the 5.2% currently quoted by the ABS for October 2011 — this is the equal largest gap since December 2005 (8.5% Roy Morgan cf. 5.1% ABS).

The Australian Bureau of Statistics, December 8 2011:

Employed Full-time Persons | Click to enlarge

The Daily Telegraph, December 22 2011:

Australia is on the brink of an unemployment catastrophe, with up to 100,000 jobs set to be slashed in the months after Christmas.

But the news isn’t all bad, with economists suggesting the nation’s wobbly economy could drive the official cash rate as low as 3.5 per cent by the end of 2012.

Westpac chief economist Bill Evans, one of the few economists who correctly predicted a rate cut in November, said lead indicators pointed to a very weak employment growth next year.

“We would expect the unemployment rate to edge up to 5.75 over the next six months,” Mr Evans warned.

“But on the flipside, the Reserve Bank would have to cut the cash rate by at least half a per cent to counter (the job losses).”

The comments come as top research firm CoreData suggested the number of unemployed people in Australia will jump by nearly 106,000 next year, assuming the labour force grows at its current rate and the unemployment rate rose to 5.75 per cent, as predicted.

CoreData boss Andrew Inwood said the problem would be felt nationwide.

“One in five Australians now think they are going to lose their jobs in the next 12 months,” Mr Inwood said.

“That’s particularly true in all industries outside finance and mining. Interestingly, our research has found levels of Australian confidence in the economy for the first quarter of 2012 is looking to be roughly the same as it was at the height of the global financial crisis.”

Richard Deniss, executive director of The Australia Institute last night echoed Mr Evans’ views, saying mass layoffs were expected in the retail industry.

“The tourism industry and retail sector are being hit very hard by the high dollar and, while mining is booming, it doesn’t employ too many people,” Mr Deniss said.

“The problem is retail doesn’t make a lot of money but employs a lot of people.”

Mr Deniss’s comments come as retail staff, including many uni students on casual shifts, have seen hours cut.

While major retailers including Myer and David Jones have had huge sales of excess stock to draw in customers, retail union national secretary Joe de Bruyn said workers rostered on for extra shifts before Christmas were having their work cancelled.

“People have been rostered on and retailers are saying ‘We don’t need you any more’,” Mr de Bruyn, from the Shop, Distributive and Allied Employees Association said yesterday.

Global Cooling, Unemployment Rising, Government Lies Unravelling

10 Dec

The World’s Greatest Finance Minister, May 2nd, 2011:

“We created 750,000 jobs since we came to office when other nations shed millions of jobs, and we will create half a million more in the next two years.”

PM Julia Gillard, December 2nd, 2011:

“We are on track to create 300,000 new jobs over the next two years”

The latest Labour Force data from the Australian Bureau of Statistics:

Employed Full-time Persons | Click to enlarge

Employed Part-time persons | Click to enlarge

Employed Total persons | Click to enlarge

Number of Full-time employed? Down 45,900.

Number of Part-time employed? Up 58,000.

Number of Employed persons? Up 12,200 (with allowance for rounding).

Since June.

2,440 per month.

At that rate of part-time “jobs created” (to replace Full-time jobs lost), it will take over 10 years for Julia to achieve her “300,000” jobs created. Assuming you believe that the government creates all the new jobs, with zero from the private sector.

It will take 18 years to reach Wayne’s promised “half a million more”.

It’s also worth noting the ABS statistic for just how many are “Unemployed, looking for full-time work”.  That number has risen by 33,900 since June, the month following Wayne’s pre-budget promise.

And the number of persons in total who are “Unemployed” has risen by 38,100 over that time.

So essentially, part-time jobs are replacing full-time jobs. And at a rate way insufficient to meet the rise in total unemployed job-seekers (eg, retrenched full-time employees, school leavers, immigrants, refugees, retirees forced to look for work due having their superannuation “nest egg” decimated, etc).

Now, this is just the “seasonally adjusted fiddled” ABS data.

Some say that Australian government “official statistics” are about as believable as government statistics in other countries.

Like the USA, where “official” unemployment has allegedly just fallen to 8.6% … thanks to their simply not counting the millions of people who are unemployed but have given up looking.  Alternate statistics researchers such as the venerable ShadowStats claim US unemployment is more like 22.5%:

Source: ShadowStats.com

In Australia, Roy Morgan research publishes an alternate measure of unemployment. And surprise surprise, it too consistently shows unemployment rates significantly higher than our government’s “official” statistics.

Here’s the latest Roy Morgan stats (emphasis added):

# In November Australia’s total unemployment as measured by Roy Morgan was 1,044,000, or 8.6% (unchanged in percentage terms, but up 18,000) from October 2011 and up 229,000 (up 1.7%) since November 2010 — Australia’s equal highest unemployment rate since March 2004 (8.8%). It is also the highest number of unemployed Australians for nearly a decade — since January 2002 (1,075,000).

# The Roy Morgan November 2011 ‘underemployed’* estimate was 938,000 (7.7%), up 90,000 (0.6%) from October 2011, and up 126,000 (0.9%) since November 2010.

# In total in November 2011 an estimated 1,982,000 (16.3%) of Australians were unemployed or ‘underemployed.’ This is up 108,000 (0.6%) on October 2011 and up 355,000 (2.6%) since November 2010.

# The latest Roy Morgan unemployment estimate is 3.4% above the 5.2% currently quoted by the ABS for October 2011 — this is the equal largest gap since December 2005 (8.5% Roy Morgan cf. 5.1% ABS).

Who to believe?

You decide.

Just remember the indignant words of Sir Humphrey Appleby, in an episode of the classic BBC satire Yes Prime Minister titled “The Smoke Screen”:

“They’re government statis…. they’re facts”

UPDATE:

For any reader questioning the “Global Cooling” reference, I have no interest in pointing you to the many websites where you can find evidence that the world has experienced a slight cooling over the past decade. Instead, in keeping with Thursday’s reference to The Golden Rule (ie, “Follow The Money”), I give you instead the opening paragraph of the official press release for the 2010 Bilderberg Meeting of the world’s ‘elite’ … and suggest you think about it:

Click to enlarge

“Kirsten, Do The Right Thing, Put Your State First, Vote Against The Carbon Tax”

8 Sep

Media release – Senator Barnaby Joyce, 8 September 2011:

Queensland going backwards under Labor

Unemployment data released today shows that Queensland is going backwards under Labor. At 6.2 per cent, Queensland has the highest unemployment rate in the country by far. The state with the next highest unemployment rate is New South Wales at 5.4 per cent.

We might have the State of Origin but we are losing on the economic footy field. Queensland used to be a powerhouse state but under Labor it is losing that mantle.

This is the worst possible time for Queensland to be facing a carbon tax. Modelling released by the Labor state government last month showed that Queensland will be hit the hardest by a carbon tax, with economic output predicted to be 3.5 per cent lower in Queensland, compared to 2.5 per cent lower in Australia.

The Rockhampton and Gladstone area will see economic activity fall by 8.2 per cent under a carbon tax, the Mackay area by 5.7 per cent, double to triple the impact of the carbon tax on the rest of Australia.

Kirsten Livermore, the federal member for the Rockhampton area, needs to do the right thing, put her state first and vote against the carbon tax. All Queenslanders should contact their local Labor members and ask them why they are planning to vote for a carbon tax which will do its greatest damage to Queensland.

The unemployment rate in Queensland increased in August to 6.2% from 5.6% in July. An extra 15,000 Queenslanders were made unemployed in August, on top of the 10,000 made unemployed in July.

Since the Howard government left office the unemployment rate in Queensland has increased from 3.8% (in November 2007) to 6.2% today. The number of Queenslanders unemployed under Labor has increased by 70,000, an increase of 80%.

More information – Matthew Canavan 0458 709433

Barnaby: Carbon Tax Not The Answer For Queensland

11 Aug

Media Release – Senator Barnaby Joyce, 11 August 2011:

Jobs figures show that carbon tax is not the answer for Queensland

Employment data released today reveals that Queensland now has the highest unemployment rate in the country. This is the worst time for Queensland to be facing the prospect of a carbon tax, Senator Joyce said today.

“The unemployment rate in July increased in Queensland to 5.6%, from 5.2% in June, double the increase experienced nationally. Queensland now has a higher unemployment rate than any other State. In total, an additional 10,000 Queenslanders became unemployed over the past month.

“This is an appalling outcome when you think of the minerals boom that Queensland is meant to be experiencing. When small businesses tell you there is not much business around they are not joking.

“The prospect of a carbon tax is killing jobs in Queensland. If the Labor government moves forward with a carbon tax they have will have moved from being incompetent to culpable.

“Surely someone in the Labor party has a television set and can see what is going on in the world. Now is the not the time for a carbon tax that will raise costs for every small business but have zero effect on the temperature of the globe.

“This is a one vote Parliament. We are looking for just one Labor party member to stand up for Queensland and vote against the carbon tax. Let’s stop this charade and do what the vast majority want.

“Since the Howard government left office the unemployment rate in Queensland has increased by 50%, from 3.8% (in November 2007) to 5.6% today. There are over 50,000 extra Queenslanders unemployed since the Rudd-Gillard government came into power.

“Queensland was once the state of development. An earlier generation built dams, electrified the railway lines, developed the Gold Coast and opened multiple international airports. Thanks to Labor it is now the State with the lowest economic credentials, where bats seem to have more rights than people, where farmers have had their rural soul sold by State Labor governments, so that coal seam gas companies can run over their land while paying 75 cents for every $1000 they extract, where fishing has become an immoral past-time, where the economic future for aboriginal people has been taken away so they can live on a “wild river”, where the major industry of the north, the live cattle trade, can be shut down over night because apparently the nation is run by Four Corners, not the government.

“When green regulations become more important than creating jobs, the effects are there for all to see. Queensland has the highest unemployment in the country and public debt heading towards $85 billion.”

More information – Matthew Canavan 0458 709433

%d bloggers like this: