Unemployment up slightly in January (up 0.1% to 11.3%) – highest since January 1995 (also 11.3%)

In January 2014 an estimated 1.44 million Australians (11.3% of the workforce) were unemployed – the highest rate of unemployment since January 1995 (11.3%). January unemployment is up 29,000 (up 0.1%) from last month and up 113,000 (up 0.4%) compared to the same time last year.

The Australian workforce* was 12,754,000 (up 119,000) comprising 7,715,000 full-time workers (up 320,000) – and a new record high; 3,599,000 part-time workers (down 230,000); and 1,440,000 looking for work (up 29,000) according to the Roy Morgan monthly employment estimates. The Roy Morgan employment and unemployment figures do not include people who have dropped out of the workforce and given up looking.

Among those who were employed 1,105,000 Australians (8.7% of the workforce*) were under-employed, i.e. working part-time and looking for more work. This is 13,000 more than a month ago (up 0.1%).

In January in total an estimated 2.545 million Australians (20.0% of the workforce) were unemployed or under-employed – the highest ever recorded. This is up 42,000 (up 0.2%) from December and much higher than 12 months ago in January 2013 (up 150,000, up 0.3% from 2.395 million).

Of those looking for work an estimated 851,000 Australians (up 74,000) were looking for full-time work – a record high, while 589,000 (down 45,000) were looking for part-time work.

The latest Roy Morgan unemployment estimate of 11.3% is a substantial 5.5% more than currently quoted by the ABS for December 2013 (5.8%).

*Workforce includes those employed and those looking for work – the unemployed.

Gary Morgan says:

“Australian unemployment has increased to a record high 1.440 million Australians (11.3%, up 0.1%) in January. This is the highest rate of unemployment in nearly 20 years – since January 1995 (11.3%, 989,000). The rise in unemployment was driven by a combination of a large increase in the size of the Australian workforce (12,754,000, up 119,000) and not enough jobs being created in January to prevent unemployment rising.

“Although Australian full-time employment surged to a record high 7,715,000 (up 320,000), some 851,000 (up 74,000) Australians are now looking for full-time work – also a record high. Meanwhile, Australian part-time employment dropped to 3,599,000 (down 230,000), and those seeking part-time employment fell to 589,000 (down 45,000).

“These results are not a surprise as full-time employment traditionally surges in January as graduates take up their positions. Full-time employment has increased in 12/13 years since the turn of the century while part-time employment has declined in 9/13 years over the same time period as staff taken on during the pre-Christmas sales period either become full-time employees or are let go.

“However despite this pattern we see every year, Australian unemployment has increased substantially over the last 12 months to now be at a record high 1.440 million (up 113,000 since January 2013). In addition there are now 1.105 million (up 37,000 in a year) under-employed Australians  - a record high total of 2.545 million Australians (20.0%) either unemployed or under-employed.

“Our Federal Parliamentarians are due to finally return to work next week after their Summer break and clearly their number one priority must be reducing the high level of unemployment and under-employment in the Australian economy. The Abbott Government must undertake significant labour market reforms during the next few months, including the removal of red tape introduced under the previous Government, if Australian businesses are going to commence hiring in greater numbers.

“An article in the AFR last week – Holiday costs force shops to close by Marianna Papadakis highlights a great example of why there are so many unemployed and under-employed Australians. Government I.R. regulations – including the absurdly high penalty rates – means that shops close on public holidays because it is uneconomic for them to open. This over-regulation denies employment to the millions of Australians that are looking for work. It is imperative that Treasurer Joe Hockey and Minister for Employment Eric Abetz in particular present Parliament with a clear ‘road-map’ to tackle Australia’s high level of unemployment and under-employment – now above 2.5 million Australians.”

This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly face-to-face interviews of 363,632 Australians aged 14 and over between January 2007 – January 2014 and includes 3,784 to-face interviews in January 2014.

For further information:

Unemployment Data Tables

Roy Morgan Research Employment Estimates (2001-2014)

Roy Morgan Research Unemployment & Under-employment Estimates (2007-2014)

Roy Morgan Research vs ABS Employment Estimates (1992-2014)

ABS Employment Estimates (1992-2014)

ROY MORGAN MEASURES REAL UNEMPLOYMENT IN AUSTRALIA

http://www.roymorgan.com/~/media/Files/Papers/2012/20120603.pdf

The Roy Morgan Unemployment estimate is obtained by surveying an Australia-wide cross section by face-to-face interviews. A person is classified as unemployed if they are looking for work, no matter when.

The results are not seasonally adjusted and provide an accurate measure of monthly unemployment estimates in Australia.

The Australian Bureau of Statistics Unemployment estimates are obtained by mostly telephone interviews. Households selected for the ABS Survey are interviewed each month for eight months, with one-eighth of the sample being replaced each month. The first interview is conducted face-to-face. Subsequent interviews are then conducted by telephone.

The ABS classifies a person as unemployed if, when surveyed, they have been actively looking for work in the four weeks up to the end of the reference week and if they were available for work in the reference week.

The Australian Bureau of Statistics Unemployment estimates are also seasonally adjusted.

For these reasons the Australian Bureau of Statistics Unemployment estimates are different from the Roy Morgan Unemployment estimate. Gary Morgan's concerns regarding the ABS Unemployment estimate is clearly outlined in his letter to the Australian Financial Review, which was not published.