Sustained and Growing Underemployment in Australia and Canada: The Truth Behind Government Employment Figures. (Politics and Economics).(Statistical Data Included)

Article excerpt

`[M]inimum wage is just your boss's way of telling you that if he could pay you less, he would!'

Chris Rock, Saturday Night Live.

`The hopelessness of the poor has become ordinary.'

William DiFazio, Post Work.

This article attempts to demystify the orthodoxy of government unemployment figures. The central argument is that `official' unemployment rates are erroneous and mask the overall extent of poverty in Australia and Canada. This article also argues that while jobs are still being created they are not what anyone would classify as `quality jobs.' Increases in part-time and casual employment have dominated what politicians and economists refer to as employment growth. Moreover, low unemployment rates generally reflect a biased interpretation of statistical data. What about underemployment or homelessness? What have been some of the collateral effects of increased unemployment? Has crime increased? Have the numbers of `welfare' recipients increased or decreased? These questions are often overlooked and left unanswered. The following analysis will attempt to clarify just how serious the unemployment/underemployment problem is. It will try to construct a more universal and inclusive definition of unemployment to better account for what is happening in Australia and Canada.

Taken at face value, there can be little doubt that the unemployment situations in Australia and Canada are improving. Sustained economic growth since 1994 has had the positive effect of almost halving current jobless numbers--down from a peak of 11-12 per cent in 1993-94, today's official figures hover somewhere between 6 and 7 per cent. (1) With the exception of a few insightful media bulletins, we rarely see or hear anything negative about job growth and/or employment opportunities. What is more, `[t]he assumption that the rate of unemployment represents the unemployed as a per centage of all working persons cannot be refuted,' (2) and it cannot it be argued that jobs are not being created when clearly they are. So what then is the problem?

In essence, official statistics and classifications of employment are conceptually indiscriminate. They tend to ignore things like quality pay, underemployment, homelessness, and the true number of workers who want to work more hours. Whether one is employed or unemployed is really just a matter of definition, or even the way the question is asked. (3) For example, the Australian Bureau of Statistics (ABS) `classifies an individual as employed if s/he undertook at least one hour of paid work in the survey week or at least one hour of unpaid work on a family farm or family business.' (4) Conversely, one is considered to be unemployed `if s/he was not employed at all during the survey week, but demonstrated that s/he was seeking a job and was available to take up employment.' (5) Statistics Canada (StatsCan) measures employment and unemployment in a similar way, but adds that any work--hours are not specified --at a job or business during the reference week can be regarded as employment. (6)

A related methodological flaw shared by StatsCan and the ABS studies is that their survey classifications tend to be obscure and misleading. In the ABS' 1999 edition of Social Trends, it describes `fully employed' as those `people who work in full time jobs (35 hours or more per week) and those in part time jobs who did not want to work longer hours.' (7) It is difficult to determine what the exact meaning of this definition is. Should part time workers be included as part of the `full time' labour force? If the answer is yes, then what is the point of having a `part time work' classification? One could argue that this is simply a clever way to artificially inflate `real' employment figures. (8)

The fact that there are at least three statistical categories that are typically ignored or excluded from media-oriented reports and finalised government publications is also problematic. …