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Australian real unemployment now 9.2% - 1.188 million Australians; Donald Trump’s victory in US Presidential race shows electors believe real unemployment is higher than official statistics suggest

This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly face-to-face interviews of 506,783 Australians aged 14 and over between January 2007 – October 2016 and includes 4,870 face-to-face interviews in September 2016.

US President-elect Donald Trump consistently stated during his campaign that real unemployment in the US was well over 20% or even 25% rather than the official Bureau of Labor Statistics (BLS) U3 figure – now at 4.9% for October 2016. Trump’s successful candidacy shows that many Americans agree with the new President that the official unemployment figures are considerably under-stated. There is a clear lesson for Australian politicians in Trump’s success.

  • In October a total of 2.454 million Australians, 19.1% of the workforce, were either unemployed (1,188,000) or under-employed (1,266,000). This is up 256,000 (up 1.7%) from October 2015;

  • 1.188 million Australians (up 78,000 since October 2015) are unemployed and these real unemployment figures are substantially higher than the current ABS figure for September 2016 (5.6%). Australian real unemployment was 9.2% (up 0.4% in a year and up 0.7% in a month);

  • The Australian workforce increased to 12,851,000 (up 188,000 since October 2015), but total employment only increased to 11,663,000 (up 110,000) – this shows there have not been enough new jobs created over the past year to soak up the growing number of people looking for work and thus the increasing size of the workforce;

  • The problem can be seen when one looks at full-time employment which is now 7,594,000 – done 83,000 from a year ago (7,677,000 in October 2015). In contrast, part-time employment has increased by 193,000 to 4,069,000 over the past year (an average of just over 16,000 per month);

  • The higher part-time employment contributed to the rise in under-employment; now 9.9% of Australians (1,266,000, up 178,000 since October 2015) are under-employed (up 1.2%) – working part-time and looking for more hours.

Roy Morgan Unemployed and ‘Under-employed’* Estimate

Unemployed or

‘Under-employed’*

Unemployed

Unemployed looking for

‘Under-employed’*

Full-time

Part-time

‘000

%

‘000

%

‘000

‘000

‘000

%

2016

Jan-Mar 2016

2,496

19.1

1,362

10.4

639

723

1,134

8.7

Apr-Jun 2016

2,322

18.1

1,317

10.2

637

680

1,005

7.8

Jul-Sep 2016

2,296

17.8

1,266

9.8

574

692

1,030

8.0

Months

September 2015

1,994

15.6

1,058

8.3

482

576

936

7.3

October 2015

2,198

17.4

1,110

8.8

464

646

1,088

8.6

November 2015

2,536

19.6

1,186

9.2

623

563

1,350

10.4

December 2015

2,690

20.7

1,256

9.7

722

534

1,434

11.0

January 2016

2,575

19.7

1,346

10.3

696

650

1,229

9.4

February 2016

2,480

18.8

1,319

10.0

589

730

1,161

8.8

March 2016

2,433

18.8

1,422

11.0

631

791

1,011

7.8

April 2016

2,322

18.1

1,334

10.4

611

723

988

7.7

May 2016

2,316

18.1

1,369

10.7

661

708

947

7.4

June 2016

2,326

17.9

1,247

9.6

637

610

1,079

8.3

July 2016

2,536

19.5

1,365

10.5

645

720

1,171

9.0

August 2016

2,249

17.5

1,332

10.4

544

788

917

7.1

September 2016

2,103

16.2

1,101

8.5

532

569

1,002

7.7

October 2016

2,454

19.1

1,188

9.2

626

562

1,266

9.9

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


Gary Morgan, Executive Chairman, Roy Morgan Research, says:

“In October Australia’s real unemployment was 9.2% (1.188 million people looking for work, 78,000 more than a year ago) and under-employment was 9.9% (1,266,000, up 178,000 in a year) – a total of 19.1% (2.454 million) Australians looking for work or looking for more work.

“Although the Australian workforce has increased over the past year – now at 12,851,000 (up 188,000 from a year ago), the increase in the workforce has outpaced the increase in overall employment leading to the rise in unemployment.

“The problem faced by the workforce has been a lack of new full-time jobs – now 7,594,000 Australians are employed full-time, down 83,000 from a year ago (7,677,000 in October 2015). In that same time part-time jobs have surged to 4,069,000 (up 193,000) and more people are looking for work.

 “Donald Trump’s victory in last week’s United States Presidential Election has brought renewed focus to the issue of unemployment and under-employment. Trump consistently stated during his campaign that real unemployment in the United States was far higher than the official estimates.

In May Trump stated:

‘We have tremendous deficits. Don’t believe the 5 per cent. The real [unemployment] number is 20 per cent. The United States is dying from within, its domestic infrastructure is crumbling and successive administrations have wasted $5 trillion in the Middle East instead of using the money to create jobs and prosperity at home.’


“This was the message Trump repeated throughout his successful campaign for the Presidency and which helped propel Trump to what so-called ‘experts’ and ‘pundits’ considered unlikely. The key to Trump’s victories was winning the former manufacturing heartland of the United States; the Mid-West ‘rust-belt’ States of Ohio and Indiana and even more importantly Michigan, Pennsylvania & Wisconsin – none of these three States have voted for a Republican Presidential candidate since the 1980s.

“In the Australian context the reasons are well known – the loss of many high-paying full-time jobs with the end of the ‘Mining boom’ is exemplified by the troubles faced by South Australian miner and steel company Arrium and a fortnight ago came the announcement that Victoria’s largest coal-fired power station at Hazelwood is to close early in 2017 with more than 1,000 direct and indirect jobs set to go.

“The good performance of minor parties, including Pauline Hanson’s One Nation, at Australia’s recent Federal Election (minor parties received 23.2% of the vote) shows many Australians are also looking for political options outside the major parties.

“If Malcolm Turnbull’s Coalition Government and the Labor Opposition led by Bill Shorten fail to provide leadership by implementing and advocating policies that deal with the real issues many Australians face – including the much higher level of real unemployment and under-employment than reflected by the ABS monthly employment statistics – a rising number of Australians will continue to look to the likes of Pauline Hanson, Nick Xenophon, Derryn Hinch, Jacqui Lambie and others for alternatives.”

This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly face-to-face interviews of 506,783 Australians aged 14 and over between January 2007 – October 2016 and includes 4,870 face-to-face interviews in September 2016.

*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

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Gary Morgan:     

+61 3 9224 5213  

+61 411 129 094

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Unemployment Data Tables

Roy Morgan Research Employment Estimates (2001-2016)

Roy Morgan Research Unemployment & Under-employment Estimates (2007-2016)

Roy Morgan Research vs ABS Employment Estimates (1992-2016)

ABS Employment Estimates (1992-2016)

Roy Morgan Monthly Unemployment Estimates - October 2016 - 9.2%

Roy Morgan Quarterly Unemployment Estimates - September 2016 - 9.8%

Roy Morgan October Under-employment estimates - October 2016 - 19.1%


ROY MORGAN MEASURES REAL UNEMPLOYMENT IN AUSTRALIA

NOT THE ‘PERCEPTION’ OF UNEMPLOYMENT – JUNE 8, 2012

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.


Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. The following table gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. The figures are approximate and for general guidance only, and assume a simple random sample. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

% Estimate

 

40%-60%

25% or 75%

10% or 90%

5% or 95%

5,000

±1.4

±1.2

±0.8

±0.6

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2