True Qld unemployment rate around 12%

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:

More than 116,000 ‘missing’ from Queensland jobless data

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. 

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6 Responses to True Qld unemployment rate around 12%

  1. Peter Maver says:

    Sorry but as with the US the only “real number” that can be trusted is the number of people being paid welfare. As we saw last year when the ABS kept changing the unemployment rate to suit the ASX by ‘correcting the definition” the unemployment rate is just a meaningless score unless your in the stock market it is truly a “Wall Street number” not a “Main Street” one.

    • Gene Tunny says:

      Thanks Peter. Fair comment. I should have noted in my post that if you use the JobSeeker numbers then the Qld unemployment rate would be 14%. Let me address this more fully in a future post.

  2. Jim Binney says:

    A very thoughtful, informative and sobering post.

    • Gene Tunny says:

      Thanks Jim. Yes, all the comments I’m getting suggest the true situation is much worse than even this adjusted estimate suggests. Adding the underemployment rate of 13.1% to the adjusted unemployment rate for Australia of 11.3% gives an effective under-utilisation rate of 24.4%.

  3. Michael Hayes says:

    I am an employer of young skilled apprentices and tradespeople in Qld’s highest unemployment region. Young people have stopped coming to our door asking for a job. Unemployment is high but young people are not seeking a career in engineering trades unless they are mothered by job help service providers. Has hunger and ambition escaped from the Australian lexicon ?

    • Gene Tunny says:

      Thanks for the comment, Michael. I’ve been hearing similar stories from others in industry. Yes, I suspect a lot of young Australians are lacking in ambition, but the fault probably lies in the school system and with parents and guardians who fail to inspire them and give them direction.

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