The Times Australia
The Times World News

.

Technically our unemployment rate now begins with a '3'. How do we keep it there?

  • Written by Jeff Borland, Professor of Economics, The University of Melbourne
Technically our unemployment rate now begins with a '3'. How do we keep it there?

The official employment figures say the unemployment rate for March was 4.0%[1], exactly the same as a month earlier.

But if you’re prepared to download the spreadsheet and work it out, you’ll find that expressed to two decimal places the rate actually fell, from 4.04% to 3.95%[2].

The Bureau of Statistics confirms this by saying on its website that the unemployment rate fell by 0.1 percentage points between February and March while also (apparently inconsistentlly) saying it was 4.0% in both months.

Australian Bureau of Statistics[3] This result, clearly below 4%, is the lowest rate of unemployment Australia has seen since the monthly series of labour force statistics began in February 1978, and the lowest since the November quarter of 1974, almost 50 years ago, when the figures were quarterly. After the decade up to March 2020 in which the rate hardly moved above 6% or below 5%, the new rate of 3.95% is an enormous step in the right direction. But we need to worry about more than unemployment. Workers can be underemployed (getting less hours than they would like) and people who would like to work but think they won’t get work, may stop searching and not get recorded as unemployed. There’s good news on both counts. Less underemployment, fewer hidden unemployed The proportion of workers underemployed has fallen from 9.3% prior to COVID in March 2020 to 6.6%. And rather than people withdrawing from the labour force and not looking for work, the rate at which people are either working or looking is up half a percentage point on before COVID. As well, in an instance of the adage that a rising tide lifts all boats, young Australians who in the 2010s lost out as the economy slowed, now seem to be benefiting most from the pick-up. Read more: Forget the election gaffes: Australia's unemployment rate is good news – and set to get even better by polling day[4] The proportion of young Australians who are employed is an extraordinary 4.6 percentage points higher than in March 2020. This compares with an improvement of 1.9 percentage points for Australians aged 25 to 64 years, and 0.4 percentage point for Australians aged 65 years and over. A rate of unemployment below 4% is certainly a positive. It means more of the nation’s productive resources are being used. It has improved the living standards of the 170,000 people employed today who would have not been, had unemployment remained where it was before COVID. But those benefits will only stay in place as long as unemployment remains low. Our objective ought to be to keep it as low as possible for as long as possible. How can we keep unemployment below 4%? Unemployment fell below 4% because more of the population found work. The economic stimulus the government provided to respond to COVID was built for a worst case that didn’t materialise – people generally kept their jobs. As a result it added to employment growth, and established that it was easier to get unemployment down than had been generally realised. Read more: Australia cut unemployment faster than predicted – why stop now?[5] This suggests that keeping unemployment below 4% will depend on being committed to that goal. Much of the COVID stimulus has been saved[6] and has yet to make its way into spending. This, and the new spending measures[7] in the 2022 budget, are likely to maintain the impetus needed to keep unemployment low for the months ahead. Beyond that, what happens to unemployment will depend on the next government’s decisions. That 1.3 million extra jobs pledge All this must mean the Coalition’s pledge to create 1.3 million[8] extra jobs in the next five years is what’s needed. Well, maybe. Certainly, employment has to grow for the rate of unemployment to stay low. But the absolute number of jobs only has relevance for the rate of unemployment when we also know what is happening to the number of people who want to work. Depending on whether the keenness of Australians to get jobs (participation[9]) increases at a faster or slower rate than employment, 1.3 million extra jobs could either cut the rate of unemployment or be insufficient to stop it climbing. Read more: Despite record vacancies, Australians shouldn't expect big pay rises soon[10] Suppose 1.3 million jobs are created in the next five years as the Coalition has pledged[11], and all of them increase employment. And suppose also that the working age population and labour force participation rate grow at the same pace as for the past five years. Then Australia’s rate of unemployment in five years time will be about 4.4%, which is higher rather than lower than it is today. Ultimately what we care about is the proportion of the population that is in work, rather than the number of jobs created, which can be related to population. A more meaningful pledge would be to keep unemployment at the lowest possible rate below 4% without causing excessive wage inflation. References^ 4.0% (www.abs.gov.au)^ 3.95% (www.abs.gov.au)^ Australian Bureau of Statistics (www.abs.gov.au)^ Forget the election gaffes: Australia's unemployment rate is good news – and set to get even better by polling day (theconversation.com)^ Australia cut unemployment faster than predicted – why stop now? (theconversation.com)^ saved (theconversation.com)^ new spending measures (theconversation.com)^ 1.3 million (www.liberal.org.au)^ participation (www.rba.gov.au)^ Despite record vacancies, Australians shouldn't expect big pay rises soon (theconversation.com)^ pledged (www.liberal.org.au)

Read more https://theconversation.com/technically-our-unemployment-rate-now-begins-with-a-3-how-do-we-keep-it-there-181242

Times Magazine

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

From Beach Bops to Alpine Anthems: Your Sonos Survival Guide for a Long Weekend Escape

Alright, fellow adventurers and relaxation enthusiasts! So, you've packed your bags, charged your devices, and mentally prepared for that glorious King's Birthday long weekend. But hold on, are you really ready? Because a true long weekend warrior kn...

Effective Commercial Pest Control Solutions for a Safer Workplace

Keeping a workplace clean, safe, and free from pests is essential for maintaining productivity, protecting employee health, and upholding a company's reputation. Pests pose health risks, can cause structural damage, and can lead to serious legal an...

The Times Features

Duke of Dural to Get Rooftop Bar as New Owners Invest in Venue Upgrade

The Duke of Dural, in Sydney’s north-west, is set for a major uplift under new ownership, following its acquisition by hospitality group Good Beer Company this week. Led by resp...

Prefab’s Second Life: Why Australia’s Backyard Boom Needs a Circular Makeover

The humble granny flat is being reimagined not just as a fix for housing shortages, but as a cornerstone of circular, factory-built architecture. But are our systems ready to s...

Melbourne’s Burglary Boom: Break-Ins Surge Nearly 25%

Victorian homeowners are being warned to act now, as rising break-ins and falling arrest rates paint a worrying picture for suburban safety. Melbourne residents are facing an ...

Exploring the Curriculum at a Modern Junior School in Melbourne

Key Highlights The curriculum at junior schools emphasises whole-person development, catering to children’s physical, emotional, and intellectual needs. It ensures early year...

Distressed by all the bad news? Here’s how to stay informed but still look after yourself

If you’re feeling like the news is particularly bad at the moment, you’re not alone. But many of us can’t look away – and don’t want to. Engaging with news can help us make ...

The Role of Your GP in Creating a Chronic Disease Management Plan That Works

Living with a long-term condition, whether that is diabetes, asthma, arthritis or heart disease, means making hundreds of small decisions every day. You plan your diet against m...