Unemployment is a choice of governments, corporations and central banks. It is not within the control of the individual. For numerous decades, the political elite has continuously advocated gradually dismantling the public sector and engaging businesses like PWC, or privatizing public monopolies like Qantas, Telstra, and power grids (Dickinson, 2023). The corporate capital class campaigned for these outcomes (James, 2016). This clique aims to utilise the potential risk of unemployment as a stick for working-class compliance irrespective of working conditions and stagnating wages (Hurley, 2023). Central banks make the decision to purposefully increase unemployment when they feel that the existing level is insufficient and should be increased (Redman, 2023).
According to the Reserve Bank of Australia (RBA), consumer demand has a significant impact on inflation. Furthermore, it is the notion of the RBA’s Non-Accelerating Inflation Rate of Unemployment (NAIRU), which the RBA believes is 4.5% (Hutchens, 2023). It is worth noting that the ABS claims that Australia’s current unemployment rate is 3.7%. The discrepancy between the NAIRU and the actual unemployment rate is said to add to inflationary pressures and is seen as a predicament for the general populace. However, once again, the issue is not managed by the populace but rather by the agency of the ruling classes. The NAIRU’s inadequacies, as well as the fact that inflation was initially affected mostly by supply rather than demand, were addressed in a previous article titled “Monetary and Fiscal Policy Frameworks for Australia Part 1” (Haly, 2023).
The Non-Accelerating Inflation Rate of Unemployment (NAIRU), is a theoretical framework that has been criticized for measurement and prediction issues (Quiggin, 2023). Its application to measurements exceeding 2% should have been questioned, especially in Australia’s post-World War II economic situation. The 1950s and 1960s saw the labour market in Australia approaching full employment. Following the effective implementation of the Full Employment policy in Australia by John Curtin and Ben Chifley, the country experienced a continuous period of 25 years with a low unemployment rate averaging 2%. This occurred in the absence of major inflationary pressures. Robert Menzies faced a serious election challenge in 1960, when the unemployment rate hit 53,000, accounting for nearly 3% of the labour force. Nonetheless, unemployment eventually rebounded to 2%. According to Anthony O’Donnell’s book, there were measurement flaws in how unemployment was measured, although methodology issues will be discussed shortly (O’Donnell, 2019. Pg 78-85). In the early 1970s, the Australian government, led by Prime Minister Whitlam, decided to break its commitment to full employment in the aftermath of the Oil Crisis, and unemployment soared to 4.6% in late 1975. (Millmow and Courvisanos 2006. pp. 114,130)
As a consequence, unemployment rates increased significantly and inflation levels increased significantly. The Phillips curve lost some credibility as a result of stagflation in the 1970s, but the NAIRU developed amazing adaptability without justification. “By the late 1980s, it was clear that the NAIRU was no more stable than the Phillips curve had been. Steady increases in the NAIRU led one cynic to observe that the estimated rate always seemed to be 2 per cent higher than the actual rate of unemployment (Quiggin, 2010. Pg 114).” However, this zombie economic perspective has re-emerged, despite disinflation since the start of 2023, apparently, small unemployment described by the RBA as being too low (Saphore, 2023). All ostensibly to alleviate the unease caused by the ABS’s current unemployment claim of 3.7% — an excess far beyond that which threatened to cost Menzies the election 62 years ago.
The purpose of this study is to argue that the reported unemployment rate of 3.7% does not accurately reflect the experience of the unemployed. The ABS figure, on the other hand, serves two fundamental functions:
- 1. Comparative analysis on an international scale.
- 2. The interests of capitalist class exploitation.
The fundamental goal herein is to adequately educate on the magnitude of unemployment and to provide a practical benefit for policy, monetary, or fiscal.
The ABS approach for assessing employment in accordance with ILO methodology has long been criticised.
- 1. By the Australian Policy Online (APO) platform (Anderson and Richardson, 2023).
- 2. In “The Australian,” written nearly a decade ago (Keen, 2014).
As Anthony O’Donnell noted, the labour force survey can be described as “imperfectly realised” (O’Donnell, 2019. Pg 77). It aligns with the guidelines established by the International Labour Organisation’s Conference on Labour Statistics in 1947. These were adopted by Australia in 1964. The utilisation of an international standard to distinguish unemployment rates among countries serves a significant purpose. This does not include for assessing internal or domestic unemployment, the lack of employment or welfare compensation. It is still “imperfectly realised”. The primary domestic purpose of the ABS is to gauge the unhindered accessibility of labour to employers. As Gareth Hutchens has noted it is “focused on solving immediate problems for employers” (Hutchens, 2021). In brief, it assesses the specific group of individuals actively seeking employment, impelled by urgent need and possessing no discernible barriers to employment. It is a subset of Australia’s internal or domestically unemployed people. It is not a complete set. The utilisation of this measure to ascertain the unemployed population in Australia is not appropriate for government policy. I will provide additional elaboration on this in subsequent sections of this discourse.
Despite Treasurer Dr Jim Chalmers’ stated objective of pursuing Full Employment (Chalmers, 2023), the Job Summit held in September 2022 failed to achieve significant advancements (Haly, 2022b). The primary objective of the summit did not revolve around resolving the prevalent and currently exacerbated issue of unemployment. In contrast, Jim Chalmers wanted to augment the Permanent Migration Programme planning level to 195,000 for the fiscal year 2022-23 (Coorey, 2022). This proposed adjustment is presumed to alleviate the current and large deficiencies in vital skills by reinstating 465,000 additional fee-free TAFE places, with only 180,000 to be in the subsequent year (Commonwealth Treasury, 2022). Free higher education, an Australian policy adopted initially by PM Gough Whitlam, is still functioning in many less economically advantaged European countries. Opponents of free tertiary education argue on grounds of financial feasibility.
Although an extended explanation of how that costing is achievable, would draw attention away from the point of employment issues (Mitchell, 2023). Sufficient to say, a country that can allocate a large budget of $368 billion to the acquisition of unsuitable submarines should be able to prioritise expenditures in its people’s education (ICAN Australia, 2022. Pg 11). Setting priorities is a crucial consideration. As stated in the introduction, this all revolves around the concept of political choice.
Jim Chalmers has proposed allocating funds to enable the free provision of a specific range of TAFE courses to encompass 180,000 places to be delivered in 2023. That figure pales against the magnitude of the unemployment issue. The Australian Bureau of Statistics (ABS) unemployment estimate of 473,000 provided during the summit was lower than the count of individuals receiving “JobSeeker” benefits. This is a consistent trend in all data currently available (see Figure 1). The approach of the Labour Party lacks genuine commitment. They resorted to superficial measures that merely created an illusion of taking action. Labor’s approach aligns with the interests of their corporate capitalist donors, who will benefit from the availability of inexpensive immigrant labour (Coates & Wiltshire, 2023).
To understand the claims made about ABS unemployment data, it is necessary to understand the methods used by the ABS. According to Gareth Hutchens, the ABS estimates primarily serve the interests of employers rather than the general public or government policy (Hutchens, 2021). The ABS methodology yields a distinct subset of the overall unemployment population. It provides information regarding the number of individuals who are readily accessible for immediate labour exploitation. This is achieved by systematically excluding individuals who may potentially be unavailable.
These include:
- Excluding people who have worked for as little as one hour in a month — not just a week, as many allege (Keen, 2014).
- Excluding persons who work in a family company or busk on the streets, even if completely without compensation (Australian Bureau of Statistics, 2022),
- Using the 12/16 rule to exclude any foreign workers who may not of yet expended the financial resources they brought into the country (Australian Bureau of Statistics, 2014),
- Excluding persons who participate in the increasing gig economy regardless of whether they make any money because they have a “job attachment” (Australian Bureau of Statistics, 2021),
- Excluding individuals demonstrably unable to accept immediate work on demand (Australian Bureau of Statistics, 2018),
- Excluding people who are registered in government-sponsored jobless work programs, such as the PaTH program, as they are deemed “employed” (Haly, 2019).
- Excluding individuals who are found unable to offer active evidence of seeking employment (Hutchens, 2021).
In summary, an individual must be in a desperate, active search for employment opportunities, have no prospects for obtaining any form of income, be not enrolled in a government employment program such as PaTH, refrain from assisting a family business or busking on the streets, and have no obstacles that would impede their immediate exploitability by a potential employer. How well does the ABS description inform the public and policymakers about what constitutes an equitable assessment of actual domestic unemployment? It is the contention of this research that it fulfils the former referenced capitalist’s objective but is not relevant to policy or public awareness.
Based on data provided by the ABS, as depicted in Figure 1, approximately half a million people are unemployed, a figure that has remained roughly consistent over the past year. Individuals who possess a gig “job attachment” (as collected & defined by the ABS) but do not receive work opportunities or remuneration are not classified as unemployed (note the dotted purple line in Figure 1).
If such people were added it would be necessary to include an additional 65,000 to 90,000 people in the unemployment numbers for the past half year. This would result in a substantial rise in the unemployment rate, approximating the Reserve Bank’s NAIRU threshold of 4.5% (Emerson, 2023). The absence of sufficient justifications would have rendered any potential increase in interest rates unwarranted, as the desired threshold had not been breached at that time. Therefore, the inclusion of these unpaid job attachments would not condone the rationale behind the RBA’s rate increase mitigation of inflation in our economy. Even without these, Prof. John Quiggin’s disassembling of the grounds for the NAIRU in “The Conversation” demonstrates that 2023’s economy fails to support the RBA’s idea of a NAIRU (Quiggin, 2023).
The Australian RBA’s monetary policy framework does not use a precise unemployment count. (See Figure 1) If unemployment were measured based on that hard count of JobSeeker, the resulting figure would indicate an unemployment rate exceeding 6%. In such a scenario, the RBA would lower interest rates to reduce unemployment and bring it down to the desired level of 4.5%. Despite the prevalent capitalist and political tendency to praise the virtues of private enterprise, the government and media refuse to acknowledge Roy Morgan’s estimate of unemployment. As Steve Keen mentioned in his “The Australian” article as far back as 2014, this is an oversight (Keen, 2014).
For Roy Morgan, unemployment stands at 1.3 million and has remained consistently high over the past two years, never dropping below 1.1 million (see Figure 2). Disregarding this significant figure would be an oversight, even in passing. Despite their extensive collection of statistical data on unemployment over several decades, the prevailing viewpoint within the conservative establishment remains predominantly one-sided against the research of private enterprise. Even though the number of ABS unemployment plus their own zero-hours gig economy workers, surpassed the Job Seeker figures for several months during the pandemic, Roy Morgan’s estimate — which would be the only larger viable estimate — has been disregarded. It is argued that ABS’s capitulation to ILO standards for the categorisation of joblessness, as depicted, does not adequately capture the gestalt manifestations of real domestic unemployment. (O’Donnell, 2019. Pg 97, 114 & 142).
The mention of Roy Morgan is conspicuously absent from the discourse of policymakers and members of the RBA. Acknowledging Roy Morgan’s significance would imply that interest rates should have never deviated from the 0.1% threshold. The government would face significant challenges in attempting to rationalise the high unemployment rates (Figure 3), to the general public. Therefore, it is improbable that policymakers in either the government or the board of the Reserve Bank will ever consider Roy Morgan’s statistics due to an ideological bias that precludes logical reasoning or critical evidentiary analysis.
The government will mention underemployment sporadically. Since the Pandemic’s relative conclusion, representations of underemployment and unemployment rates have remained at around half the levels stated by Roy Morgan’s “disreputable” private enterprise models. These aggregated rates fell from their peak during the Pandemic until the end of 2021, when they began a staggered, fluctuating increase (see Figures 2 & 4). The magnitude of this composite representation is usually in the double-digit percentage range. However, it is important to note that the RBA’s usual unemployment graphs do not display a combination of these numbers, as this research demonstrates in Figures 2 and 4 (Chambers, Chapman, & Rogerson, 2021). The seasonally adjusted statistics for underemployment and unemployment in July 2023, according to the smaller ABS figures, were 929.9K and 541K, respectively, for a total of 1.4709 million people. This figure represents more than 10% of the ABS labour force, which is carefully avoided as a double-digit figure, and these figures are always reported separately.
In contrast, Roy Morgan’s aggregate estimates of under and unemployment were roughly twice as high as ABS’s, totalling 2.815 million (See Figure 2). Based on the labour force evaluation conducted by Roy Morgan, this figure corresponds to 18.6% (or 19.3% if based on the ABS’s smaller labour force size estimates). As indicated by the ABS, the seasonally adjusted labour force size exhibits a notable disparity with a reduction of over half a million individuals (593,300) in July, compared to the measurement reported by Roy Morgan, (see Figures 1 and 3). Nevertheless, according to Roy Morgan, approximately 45,000 individuals were reportedly withdrawn from the labour force. The Australian Bureau of Statistics (ABS) reported a seasonally adjusted rise in the labour force of 21,000, narrowing the gap between their respective labour force estimates by 66,000. However, there is still a huge disparity of over half a million between the two estimations.
The graph in Figure 1 where ABS plus unpaid job attachees (purple dashed line) climb above Jobseeker numbers (highlighted in green), suggests that Roy Morgan’s estimations are the most probabilistically plausible. This segment illustrates that from August to October 2021, the ABS unemployment estimates and the zero-hours numbers surpassed the JobSeeker numbers. Further elaboration on this topic can be found in the article “Josh’s Jobless Jargon,” published in April 2022 (Haly, 2022a).
Part II will explore the Job Vacancies available to the unemployed.
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