Roy Morgan Unemployment jumps in February (up 1% to 12.3%) – highest for 20 years since February 1994 (also 12.3%). Unemployment amongst 18-24yr olds rises to 28.0% (up 6.8%)

In February 2014 an estimated 1.561 million Australians (12.3% of the workforce) were unemployed – the highest rate of unemployment for 20 years since February 1994 (12.3%). Roy Morgan February unemployment is up a large 121,000 (up 1%) from last month and up 201,000 (up 1.4%) compared to the same time last year.

The rise in unemployment in February was driven most strongly by a large rise in unemployment for 18-24yr olds (28.0%, up 6.8%) – far higher than any other age group. Unemployment also rose for 25-34yr olds (12.4%, up 1.3%), 50-64yr olds (9.3%, up 0.1%) and those aged 65+ yrs old (5.2%, up 2.7%). However, unemployment fell slightly for 35-49yr olds (8.9%, down 0.5%).

The Australian workforce* was 12,665,000 (down 89,000) comprising 7,318,000 full-time workers (down  397,000); 3,786,000 part-time workers (up 187,000); and 1,561,000 looking for work (up 121,000) 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 1,080,000 Australians (8.5% of the workforce*) were under-employed, i.e. working part-time and looking for more work. This is 25,000 less than a month ago (down 0.2%).

In February in total an estimated 2.641 million Australians (20.8% of the workforce) were unemployed or under-employed – the highest ever recorded. This is up 96,000 (up 0.8%) from January and much higher than 12 months ago in February 2013 (up 168,000, up 1% from 2.473 million).

The latest Roy Morgan unemployment estimate of 12.3% is more than double the figure currently quoted by the ABS for January 2014 (6%).

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

Gary Morgan says:

“Australian unemployment has increased to a record high 1.561 million Australians (12.3%, up 1.0%) in February. This is the highest rate of unemployment in 20 years – since February 1994 (12.3%, 1,075,000). An additional 1.080 million Australians (8.5%, down 0.2%) are under-employed – a total of 2.641 million (20.8%) Australians unemployed or under-employed – a new record high.

“This month’s rise in unemployment was driven by a large fall in full-time employment – down 397,000 to 7,318,000, some of whom transferred to part-time employment – which was up 187,000 in February to 3,786,000 while an additional 121,000 Australians became unemployed.

“Analysing the results by age group also reveals unemployment to be heavily concentrated amongst the young: 18-24yr olds (28.0%, up 6.8% in February), have far higher unemployment than any other age group; ahead of 25-34yr olds (12.4%, up 1.3%), 50-64yr olds (9.3%, up 0.1%), 35-49yr olds (8.9%, down 0.5%) and those aged 65+ yrs old (5.2%, up 2.7%). An additional 16.1% (up 1.4%) of 18-24 yr olds are under-employed – which is also far higher than any other age group – a total of 44.1% of 18-24yr olds unemployed or under-employed.

“The figures highlight a reality seen repeatedly during economic downturns – younger people are the first to lose their employment or have their hours reduced. The spike in youth unemployment is therefore often a leading indicator of higher unemployment for older age groups. However, it is also worth remembering that many younger people who have been searching for work over the Summer months will return to their studies in March as University recommences. This is an annual trend which decreases youth unemployment each year which we would expect to see next month.

“The continuing rise in unemployment – which has now increased in eight out of the last ten months since hitting a low of 9.3% in April 2013 – is a huge concern for the Abbott Government as it gets set to deliver its first Federal Budget in two months’ time. In February alone Qantas announced plans to heavily slash costs (An expected 5,000 jobs lost), Toyota announced it was ceasing car manufacturing in Australia (A minimum of 2,500 jobs lost), Alcoa announced it was closing several smelters (1,000 jobs lost), Telstra announced plans to cut its directories division (800 jobs lost) and today IBM has announced it plans to cut a further 500 jobs.

“These job losses attract the headlines, but smaller businesses are also shedding jobs – and as the Roy Morgan figures show, younger Australians are finding it harder and harder to find employment. The Abbott Government must immediately undertake significant labour market reforms to re-invigorate the Australian economy and provide real hope for unemployed and under-employed Australians. As a first measure, the Abbott Government must abolish the absurdly high penalty rates that mean many shops close on weekends and public holidays as it is simply 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 2.6 million Australians.”

This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly face-to-face interviews of 367,452 Australians aged 14 and over between January 2007 – February 2014 and includes 3,820 to-face interviews in February 2014.

*The ‘under-employed’ are those people who are in part-time work or consultants who are looking for more work. (Unfortunately the ABS does not release this figure in their monthly unemployment survey results.)

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.