Back To Listing

Nev Power’s COVID-19 Commission must rely on the more sensitive and accurate Roy Morgan unemployment measure rather than the Government’s seasonally adjusted ABS estimate

The new Federal Government mandated National COVID-19 Coordination Commission headed by Nev Power is designed to mitigate the fallout from the COVID-19 pandemic and ensure employment opportunities are available for these workers now, and for workers when normality returns.

 – by Gary Morgan, Michele Levine and Julian McCrann


The new Federal Government mandated National COVID-19 Coordination Commission headed by Nev Power is designed to mitigate the fallout from the COVID-19 pandemic and ensure employment opportunities are available for these workers now, and for workers when normality returns.

However, the Committee will be operating without a clear understanding of the current employment status of many Australians unless they rely on real-time unemployment data NOT seasonally adjusted ABS data.

The significantly lower ABS unemployment estimate is almost self-defining as it relies on people being available for work every day in the ‘reference’ week, e g.:

  • anyone minding children or a sick person is not by definition available for work, or
  • anyone who did one hour of work (paid or not) in the reference week is not defined as unemployed, and

People working at home in a family business and not being paid will be classified by the ABS as employed – obviously wrong!

The graph below covering the last 20 years shows how much more variable or sensitive the Roy Morgan true unemployment measurement is compared to the ABS.

Roy Morgan Monthly Unemployment Estimate - February 2020 - 8.3%

Source: Roy Morgan Single Source January 2000 – February 2020. Average monthly interviews 4,000.

In September 2008 – just before the Global Financial Crisis, the difference between the ABS Unemployment (4.3%) and Roy Morgan (4.9%) was only 0.6%. The Mining Employment ‘Boom’ from 2008-2010 kept these estimates relatively close for two years until October 2010 when the ABS measured unemployment at 5.4% and Roy Morgan unemployment at 6.4%  – then separated by 1%.

However, after the end of the Boom, Roy Morgan unemployment increased significantly while the ABS unemployment estimate was stable.

Since January 2011 – so over the last decade – Roy Morgan unemployment has averaged being 4% points higher than ABS unemployment.

The Roy Morgan estimate is NOT seasonally adjusted so variance each month is between 0% and 1.5%; while the ABS shows little change month-by-month as it is seasonally adjusted.

Day-by-day Australian businesses are using the 'force majeure clause' in the Fair Work Act to stand down thousands of workers. For this reason Roy Morgan is today measuring change in a persons' work status

Unfortunately the true unemployment is still 'masked' because Governments are employing and paying $millions to the public sector employees - some are very busy but a lot have little to do.

The new ABS monthly under-employment figure introduced in late 2018 more accurately measures under-employment and there is little difference between Roy Morgan under-employment and ABS under-employment. The Roy Morgan figure is on average 0.5% higher than the ABS figure – a much smaller difference which indicates that ABS & Roy Morgan under-employment are generally tracking the same pool of under-employed workers. The problem is with the unemployment measure.

Roy Morgan Monthly Unemployment & Under-employment - February 2020 - 17.3%

Source: Roy Morgan Single Source January 2000 – February 2020. Average monthly interviews 4,000.


Visit the Roy Morgan Online Store to purchase employment profiles, including for Australians who are
employed, unemployed, under-employed, employed part-time or  employed full-time.


For further information:

Contact

Office

Mobile

Gary Morgan:

+61 3 9224 5213

+61 411 129 094

Michele Levine:

+61 3 9224 5215

+61 411 129 093