Employment and unemployment can both increase because labour force grows with population

I’ve noticed there is a bit of confusion around regarding how the Queensland Government can claim employment has grown while at the same time unemployment has increased and the unemployment rate has risen to 6.9 per cent. Employment and unemployment can both increase over a particular period because the pool of people in the labour market – those employed or actively looking for work (i.e. unemployed) – is not static, but growing, as the population increases. New jobs need to be created not just for those currently unemployed but for future workforce entrants such as school leavers and parents re-entering the workforce. When employment grows at a slower rate than the labour force, unemployment is increasing faster than employment, and the unemployment rate will increase. This is what has happened in Queensland since the last election (see chart below, which was inspired by today’s article in the Brisbane Times Employment grows but jobs are part-time).

Labour_force_since_election

I’ve been reluctant to make too much out of the loss of full-time jobs because of the high degree of imprecision in the labour force data and because I think there is still value in part-time employment, even though a full-time job would obviously be preferable for many people.

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