Australia needs to admit real unemployment and creeping underemployment

Roy Morgan unemployment and underemployment trends
Contributed by Joe Montero

As we are told that the latest official seasonally adjusted  figure that unemployment has gone down slightly, from 5.8 percent to 5.7 percent, it might be worthwhile considering a bit of reality.

First, the preferred politician’s number does not tell us that behind this there has been a fall in full-time jobs and an increase in part-time ones.

There is more. The Roy Morgan organisation also calculates trends in employment and jobs. It does so differently, by not counting those who have worked one hour in the last fortnight as full time. Only real full-time jobs are measured.  This way the current unemployment rate is 9.7 percent.  Roy Morgan’s underemployment rate sits at 8.3 percent, up 0.9 percent in the last year. Put these together and the real unemployment rate in Australia that is  much higher than we are being told .

A growing form of  under-employment has been the practice of underpayment through the use of 457 visas to bring in cheap labour from overseas. Topping this, is the convenience and fast food industries’ systematic use of seriously underpaid  workers.  7 Eleven, Pizza Hut, Domino’s and Caltex service stations, have been caught doing it.

Another problem is the rise  of new technology to provide apps, where  employers exchange real jobs, by calling in someone to perform just one task, be paid for just this one task and then away.

At least 2 million Australians denied the opportunity for suitable work and the Australian government chooses to do nothing to improve the situation. To make matters even worse, it has taken up a war against the unemployed through Centrelink. The reaction has been growing community opposition, which is giving rise to calls for an inquiry into wage theft and for reform of the Centrelink system.

The point is that the tight job market is providing incentive for employers to cut corners and opt for cheap labour. They do this just because they can, when there are people out there desperate enough to accept the injustice. To those who see this as a good thing, the lower the wages the better. It is a view based on the misconception that lower wages lead to a better return to investors and this will later lead to better wages all round.

The same world view is feeding the current demand from the peak employer organisations call for greater “labour market reform,” à la expanding “flexibility.” This means more casual, part-time jobs and greater capacity to use cheap labour. Cutting unemployment benefits fits in, by helping to create a labour pool that will accept what’s on offer.

What is forgotten is that as the downward pressure pulls almost everyone down, the economy contracts too. Less disposable income means a fall in the capacity to absorb the goods and services provided. Profit is squeezed and businesses begin to fall.

Cutting down on the reward for labour  may seem good, at least in the short-term, to an individual employer. But this is very different from the perspective of the collective interests of all employers, never mind the rest of society.  Backing this point is the observation that those countries that have practiced the most widespread use of cheap labour and practiced it for longer, have not become the most profitable and prosperous. On the contrary, those that have rewarded labour more generously, are the ones that have prospered.

Instead of fudging with the numbers, Australia would be better served by admitting the truth. Only this way can the real problem of unemployment and under employment be properly considered and solutions found that will leave us all better off.

Unfortunately, we stuck with a government, that would rather champion the short-term interests, of its upper ranks of the business community backers.

 

 

 

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