Much is made of monthly unemployment figures published by the ABS. But in this era of zero-hour contracts and gig economy jobs, what we should be talking about is underutilisation. This is the total number of unemployed and underemployed workers. It’s important to know how many people can’t find enough paid work hours to cover their living costs.
Once upon a time, the pathway out of poverty was simply to get a job. But over the past four decades, the employment market has changed, and we have a growing underclass of people who can get enough work to not count as unemployed, but not enough to pay the bills.
For women, underutilisation has been driven by higher underemployment than unemployment since September 1992. From May 1978 to May 2019 (41 years), the unemployment rate for ACT women did not change, but the underemployment rate almost doubled (from 3.9 per cent to 7.0 per cent, according to Australian Bureau of Statistics monthly labour force data). There have been a couple of blips where unemployment was higher than underemployment but the norm for ACT women looking for work is not that they can’t find a job, it’s that they can’t find enough hours in the jobs they’ve got.
Further underlining the shift in the labour market for ACT women, the proportion of full-time jobs has decreased, while the proportion of part-time jobs has increased. From May 1978 to May 2019, the proportion of employed women in the ACT who were full-time decreased 2.9 per cent, while the proportion employed part-time rose 5.3 per cent. And we know that this is not because women want to work part-time because the underemployment rate follows the same rising trend over the long-term as the proportion of jobs that are part-time. This change happened in every state and territory in Australia between June 1991 and April 1995, with almost all states and territories experiencing this fundamental change in the norms for women job-seekers during the worst of the 1990s recession.
Now, the same appears to have happened to men’s employment.
Underemployment, rather than unemployment, has been the norm for men in the ACT since March 2016, with a corresponding rise in part-time work rather than full time.
The ACT is not alone in this shifting employment landscape: the same change happened to men in every state and territory in Australia between 2010 and 2016. While most states have had a blip of a single month of unemployment being higher than unemployment in the past year, it seems that the norm for men has definitely shifted to it being harder to get enough hours than just to get a job at all.
Comparing the current economic downturn with past major economic crises, the rise of underemployment indicates we may have another recession in our near future. After the recession of 1990 to 1991, women’s underemployment never consistently returned to levels lower than women’s unemployment. Following the 2001 dotcom crash, there was a consistently bigger gap between women’s underemployment and unemployment than there had been before. After the 2009 Global Financial Crisis, the gap grew again.
Each economic crisis has had a long tail for women’s underemployment, but recovery is never a return to the previous status quo: the long-term trend for women is that underemployment is the new normal for women who are jobseekers. What is different with the current economic pressures on the labour force is that while ACT women’s underemployment reached an all-time high of 6.4 per cent more than the unemployment rate in November 2018, there has also been a noticeable rise in men’s underemployment compared to unemployment that looks likely to become permanent.
What is clear is that we are transitioning to an evolved labour market, where part-time hours and contract work are far more common. To be ready for this new world, we need to support a more equitable distribution of unpaid work across gender roles, embark on job creation through infrastructure investment to cushion the impact during transition, encourage industry diversification to reduce reliance on a small pool of occupations compared to other states, and improve housing affordability so that a temporary loss of income is less likely to lead to homelessness.