The true Queensland unemployment rate is around 12% rather than the official 7.9%. I’m not suggesting the ABS is being tricky. The ABS is accurately applying the internationally accepted Labour Force Statistics methodology. But we must look beyond the ABS data to understand what is happening in the labour market at the moment.
ABC business reporter Gareth Hutchens published a great article on Friday (JobSeeker has about 700,000 more claimants than there are ‘unemployed’ people on ABS data) attempting to reconcile the official estimate of the number of unemployed persons in May of around 928,000 nationally with the more than 1.6 million JobSeeker (or Youth Allowance-equivalent) recipients, around 380,000 of whom are in Queensland (see Pete Faulkner’s post JobSeeker data for May shows another 22% increase). In his article, Hutchens observed that currently you don’t need to be actively seeking work to qualify for JobSeeker but you do to be counted as unemployed by the ABS. The discrepancy between the JobSeeker and ABS unemployment estimates is largely due to over 600,000 people having left the labour force, meaning they are not actively looking for work. Hutchens observed:
The ABS noted that the official unemployment rate would be around 11.3 per cent if everyone who lost their job in the last two months was still part of the labour force.
Performing the same calculation for Queensland gives an estimated unemployment rate of 11.8%.* In the official ABS data, the highest unemployment rate recorded (technically since 1978, but realistically since the Great Depression) was 11.1% in Queensland and 11.2% nationwide during the early nineties recession.
Incidentally, John McCarthy at In Queensland has done his own investigations on this issue:
Taking underemployment into account, we see that one-in-five workers are under-utilised, and that women have been worse affected than men (see chart below). We really need the economy and our internal borders to fully open as soon as possible, but of course the news from Victoria over the weekend has been a huge setback.
*Using the alternative way of performing this calculation, holding the participation rate constant, which is the way I recall Queensland Treasury once did it, yields a true unemployment rate of 12.0% in Queensland.