Royal Economic Society

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

Retrieved on: 
Monday, September 25, 2023
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Today’s employment white paper has adopted the broadest-ever definition of what “full employment” means for Australia.

Key Points: 
  • 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.

We can and should keep unemployment below 4%, says our survey of top economists

Retrieved on: 
Sunday, August 13, 2023
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The median (middle) response was higher, but still below official estimates – an unemployment rate of 4%.

Key Points: 
  • The median (middle) response was higher, but still below official estimates – an unemployment rate of 4%.
  • Significantly, only two of the economists surveyed picked an unemployment rate of 5% or higher, which is where Australia’s unemployment rate has been for most of the past five decades.
  • Australia’s unemployment rate dived to 3.5% in mid-2022 and has remained close to that long-term low since.
  • Geopolitical events and climate change have probably pushed up the rate of inflation to be expected from any given domestic unemployment rate.

3.5% unemployment, yet falling inflation

    • Craig Emerson, a former minister in the Rudd and Gillard governments, said NAIRU was best described as the lowest unemployment rate consistent with inflation not taking off.
    • Given Australia’s inflation rate is now coming down, NAIRU is clearly below the present unemployment rate of 3.5%, he argued.
    • This is the case at present, suggesting “full employment” means an unemployment rate of 3.5%.

Fix education, job-matching and childcare

    • There was very little support for cutting immigration or the JobSeeker payment.
    • The unemployed who would benefit the most would be those further down the queue who were the least successful in finding jobs.
    • Another, Brian Dollery from the University of New England, said much of Australia’s unemployment had been generated by unemployment benefits that were too high.

Reserve Bank Governor Lowe announces changes to bank's operations as cabinet readies to approve who will lead it

Retrieved on: 
Wednesday, July 12, 2023
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Lowe also reiterated that interest rates – held steady by the bank this month – might have to rise further to combat inflation.

Key Points: 
  • Lowe also reiterated that interest rates – held steady by the bank this month – might have to rise further to combat inflation.
  • It is generally expected Lowe will be replaced, when Treasurer Jim Chalmers takes his recommendation to cabinet.
  • They include having two boards – a Monetary Policy Board with greater economic expertise to set monetary policy, and a Governance Board to oversee corporate governance.
  • In other changes, the governor will face the media after each board meeting to explain its decision on rates.

Sui Foundation Names Greg Siourounis as Managing Director

Retrieved on: 
Monday, April 17, 2023
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The Sui Foundation (or the “Foundation”), dedicated to supporting the Sui ecosystem, today announced the appointment of Dr. Greg Siourounis as Managing Director.

Key Points: 
  • The Sui Foundation (or the “Foundation”), dedicated to supporting the Sui ecosystem, today announced the appointment of Dr. Greg Siourounis as Managing Director.
  • In this role, Dr. Siourounis will lead execution of the Foundation’s efforts to support the Sui community through the launch of the Sui Layer 1 blockchain and beyond.
  • This includes overseeing programs aimed at accelerating developer growth, educating the public about Sui blockchain technology, organizing developer and builder events, and integrating the Foundation with the Sui community to hasten decentralization.
  • Dr. Greg Siourounis will report to Sui’s independent board of directors.