1 in 5 Australian workers are either underemployed or out of work: white paper

• Today’s employment white paper has adopted the broadest-ever definition of what “full employment” means for Australia.
• The new paper says closer to 2.8 million Australians are either underemployed or out of work – equivalent to one-fifth of the current workforce.
• The white paper still cautions that “full employment” does not mean zero unemployment.

Underemployment and unemployment approach 2.8 million

• While 539,700 Australians are unemployed, there are another 1 million who are employed but want to work more.
• And there are another 1.3 million “potential workers” who are interested in working, but not currently actively looking.
• This lifts the total number of Australians who are in some way unemployed to 2.8 million, according to the white paper.

Employment white papers date back to WWII

• This isn’t the first Australian government employment white paper.
• That 1945 white paper was inspired by the British white paper released in 1944, which set out an ambitious plan to carry forward the high employment achieved during wartime into peacetime.

No specific target for our unemployment rate

• The 1965 Vernon Report on the economy was more optimistic, defining full employment as an unemployment rate of 1 to 1.5%.
• The Keating government’s Working Nation paper – released in 1994 when unemployment was almost 10% – adopted a target of 5% by 2000.
• The words, but not the numbers, in today’s employment white paper are consistent with an unemployment rate of 4% or lower.

Few ideas for lifting productivity

• The white paper identifies labour productivity (output per hour worked) as crucial to increasing the purchasing power of wages, yet details few ideas for increasing it.
• Labour productivity has slowed over recent decades, and in recent years has actually fallen.
• Declining labour productivity is also likely to reflect the gradual shift from manufacturing to services.
• Read more:
  Government's employment white paper commits to jobs for all who want them – and help to get them

  But weak productivity probably also reflects other things.