Australia: Unemployment statistics mask job crisis
By James Cogan 12 June 2010

The official unemployment statistics in Australia have been systematically skewed to cover up the real extent of joblessness and the social crisis that it has given rise to. As a WSWS reporting team found this week, many of those without a job have simply been recategorized but continue to live on poverty-level welfare payments.

The latest survey carried out by the ABS, published on Thursday, reports that official unemployment fell in May from 5.4 percent to 5.2 percent. Seasonally adjusted, there are 11.56 million people working and 610,000 unemployed. The workforce participation rate dropped slightly from 65.2 percent of the population down to 65.1 percent.

Prime Minister Kevin Rudd boasted: “We [Australia] now have about half the unemployment level of the United States, half the unemployment rate of many countries in Europe.” Conveniently ignored by Rudd is the fact that hundreds of thousands of people who want and need full time jobs do not show up in the figures because the Australian Bureau of Statistics (ABS) is not able to classify them as unemployed.

The statistics mask a systemic social failure which leaves an entire layer of the population excluded from full time work and consigns them to a marginalised existence of part-time, casual or temporary work, or total dependence on the poverty-level allowances paid out by Centrelink—the state social security agency.

Australia’s huge pool of part-time workers—now more than 3.28 million people or one third of the entire workforce—are not counted as unemployed if they worked just one hour during the survey week. The ABS’s labour underutilisation rate, which includes “underemployed” workers who did not work as many hours as they wanted, stands at 10.6 percent, or more than 1.2 million people.

The real state of the job market in the wake of the global financial crisis is indicated by the fact that the number of long-term unemployed—people who have been receiving the Newstart unemployment allowance for over 12 months—soared by 72,000 over the past year to 334,224.

The long-term unemployed figure also does not include the estimated 770,000 people who Centrelink pays the Disability Support Pension (DSP) and are therefore not officially looking for work and not counted in the unemployment statistics.

The DSP was introduced in 1991 by the Labor government of Bob Hawke and Paul Keating, amid the double-digit unemployment produced by a severe recession and the wholesale restructuring of manufacturing industry. It was consciously designed to enable the social security agency to designate people as “disabled” rather than unemployed. While the DSP is higher than the unemployment benefit, the state is relieved of any responsibility to provide retraining or other assistance to get people back into the workforce.

Welfare officers encourage people deemed too old, injured or ill to get a job to apply for DSP. Some 70 percent of recipients are between 40 and 60. In many cases, they became unemployed for medical reasons and have not been able to find work since. In other cases, they are discouraged unemployed who have fallen victim to depression or other mental health conditions. In 2007-2008, 32.8 percent of successful applicants were receiving unemployment benefits before they were placed on the disability pension.

The DSP effectively conceals the true extent of long-term unemployment and the number receiving the benefit has grown exponentially. There were 74,679 successful applications in 2007-2008 and a similar number in 2008-2009.

As part of its general assault on social welfare, the Rudd government has moved to make it far more difficult to qualify for and stay on DSP. In its latest budget, Labor legislated that disability pension applicants can be put on unemployment benefits until they “prove” that they cannot work more than 15 hours a week. The change is estimated to save the state over $300 million per year.

Welfare Rights Centre director Maree O’Halloran told the Australian last month: “No previous government contemplated such a draconian tightening in eligibility for this payment. With savings of such magnitude, it’s difficult to avoid the conclusion that the government is partly balancing its books off the backs of Disability Support Pensioners. Welfare Rights estimates that up to 112,000 people may be transferred on to other payments, which can be up to $120 a week less.”

The method being employed to cut people off DSP is the same punitive regime that is used to force people off Newstart and benefits like the Youth Allowance, which is paid to the unemployed under 21-years-old and qualifying students. The unemployed have to continually “prove” to Centrelink that they are looking for work by attending job placement agencies, most of which are operated by corporations or charity organisations. Each fortnight, they have to provide evidence that they have submitted job applications. If they do not, they can be “breached” and have their payments suspended for as long as six weeks. So-called “repeat offenders” are cut off altogether.

Centrelink employees, not the government, bear the brunt of the resulting anger and desperation.

The figures have always been massaged.

I wouldn't get too worried about it.

Another thing....if you are underemployed, chances are you are not registered with a job agency, because you are working. Therefore you lose the option to many jobs because the agency will only accept your application if you are registered with them.

A lot of people who want more work, or to change jobs are locked out of the system.

The whole system needs reform. Back to CES, a system that was open for all job seekers.

Ex Dame Pansi wrote on Sep 5^th, 2010 at 2:32pm:

Hear, hear!

I live in an area of high unemployment. The locals tell me that the old Public Service model worked far better that the commercial agencies favoured by John Howard.

Then again I worked in the CES during the 1980s and early '90s, so maybe they're just sucking up. 

It also tends to depend on industry as well.

I think trying to apply a one-size-fits-all figure to Australia is both pointless and difficult.

Take our recent attempt to hire an Assistant Accountant in our Melbourne office last month.
Paying $60k+ per year and wanting 2-3 years relevant experience.

It was near on impossible to get what I would call 'good' candidates.

It just seemed to be people vastly under-qualified or Asians with pigeon English.

Now the same role in Perth got 5 or 6 candidates who were exactly what we needed.

It's not a national equal playing field.