/Are people working one hour per week skewing the jobless rate?

Are people working one hour per week skewing the jobless rate?

Posted

May 17, 2019 07:33:38

An overwhelming majority of Australian workers clock up more than 20 hours per week, but for a razor-thin slice of society it’s often as low as just one hour.

Through the optics of statistics, though, both kinds of worker have the same baseline employment status.

Glenys Leckie spent her career as a school teacher, later taking to the land as a farmer in the south-west New South Wales town of West Wyalong.

When the retired 76-year-old learned that people working just one hour per week were being labelled employed, she was concerned this “ridiculous” interpretation of the labour market could skew unemployment data.

So she asked the ABC’s You Ask, We Answer project:

“What party brought in that one hour per week makes you employed and when was it brought in?”

Quite simply …

Well, the employment status wasn’t introduced by a political party — recognition of one-hour working weeks were internationally ratified in 1982 by the International Labour Organisation.

Australians working just one hour per week make up 0.1 per cent of the nation’s 12,820,000 employed workers in 2018, according to the Bureau of Statistics (ABS).

Usual hours worked per week People employed Share of total employment (%)
1 14,500 0.1
2-3 85,900 0.7
4-6 250,900 2.0
7-9 244,600 1.9
10-19 1,083,300 8.6
20-29 1,529,900 12.2
Source: Australian Bureau of Statistics

Does this affect jobs statistics?

With growing casualisation and underemployment within Australia’s workforce, economics professor Phil Lewis said the recognition of one-hour working weeks was behind the times.

“Nowadays it’s totally inadequate. I don’t think anybody in the public would think working one hour a week was the definition of employment.”

Professor Lewis, director of the Centre for Labour Market Research at the University of Canberra, said the labour force now experienced “all sorts of varieties, from very little work to quite substantial amounts of work”.

“We have to take all of those facts into consideration,” he said, rejecting the notion that one-hour working weeks contributed to distorted unemployment figures.

The ABS’s Labour Force Survey, he said, was conducted across a third of 1 per cent of Australia’s working population, creating labour statistics which varied in accuracy.

“In samples, there is always a degree of error; you can never know with certainty.”

With this variance of employment statistics in mind, Professor Lewis said Australia’s official unemployment rate (5.2 per cent) could potentially vary from 4.7 to 5.7 per cent.

Best practice for interpreting the numbers

Mike Dockery, associate professor at the Bankwest-Curtin Economics Centre, said a number of factors other than one-hour workers were skewing true unemployment numbers.

“We ignore people who’ve dropped out of the labour force — to be classified as unemployed, you actually need to have looked for work in the survey period,” he said.

“There’s people who’ve given up looking for work, which we call discouraged workers or the hidden unemployed, who aren’t counted in the figures.”

Associate Professor Dockery said measures used by the ABS to survey the labour market had remained the same since 1978, which made comparisons over time easy but seldom told the whole story.

“There’s no way you can actually say exactly how many people are employed and unemployed, there’s a lot of movement in between them.”

Despite recent discourse on true unemployment numbers, he said ABS survey measures aligned with the International Labour Organisation’s standards and provided an internationally relevant snapshot of Australia’s workforce.

“To say that it’s not a good measure, in my view, it’s a bit like someone saying ‘well, I don’t think Celsius is a good measure of temperature because I think it’s hotter than that’.”

Associate Professor Dockery said one-hour working weeks were the least of the ABS’s problems.

“A lot of issues are with people who overwork, so if people work many hours [the ABS] don’t actually ask them if they would work less hours,” he said.

“Certainly for mental health, we’ve got maybe just as big a problem of people working too many hours.”

Topics:

work,

industrial-relations,

economic-trends,

business-economics-and-finance,

globalisation—economy,

people,

human-interest,

australia,

orange-2800