LABOUR FORCE UNDERUTILISATION AND THE UNDEREMPLOYED IN SOUTH AUSTRALIA


INTRODUCTION

The number of underemployed workers is a key component of underutilised labour resources in the economy, along with the number of unemployed and those with marginal attachment to the labour force. The labour force underutilisation rate is an alternative measure to the more commonly used unemployment rate and provides a more comprehensive measure of the available untapped labour resources within the economy. This article provides an overview of the labour force underutilisation rate in South Australia, with a focus on the characteristics of underemployed workers.

Underemployed workers are part-time workers who want, and are available for, more hours of work than they currently have and full-time workers who worked part-time hours during the reference week for economic reasons (such as being stood down or insufficient work being available). The ABS conducts the Underemployed Workers Survey annually each September across Australia (Underemployed Workers, Australia (cat. no. 6265.0)); this article presents data collected from this survey. Unless otherwise stated, the article presents original series data.


LABOUR FORCE UNDERUTILISATION RATE

Over the last 5 years, the decrease in South Australia's labour force underutilisation rate has been mainly due to a reduction in the unemployment rate. Further reduction in the labour force underutilisation rate can be achieved by better utilisation of the underemployed workers. In September 2001, the South Australian labour force underutilisation rate was 14.5%, compared with 10.8% in September 2006; a decrease of 3.7 percentage points. For the same period the unemployment rate decreased by 2.6 percentage points (7.3% to 4.7%) whereas the underemployment rate only decreased by 1.1 percentage points (7.2% to 6.1%).

The South Australian underemployment rate has been consistently higher than the national underemployment rate in the five year period from September 2001 to September 2006. In September 2006, South Australia's underemployment rate was 6.1%, compared to a national rate of 5.0%.

While the national unemployment rate (4.8%) and underemployment rate (5.0%) were relatively similar in September 2006, the underemployment rate in South Australia (6.1%) was much higher than the unemployment rate (4.7%).




CHARACTERISTICS OF UNDEREMPLOYED WORKERS

In September 2006, there were 758,900 employed people aged 15 years and over in South Australia. Of these, 48,900 (6.1%) were underemployed. The underemployed workforce in South Australia is made up of 45,400 part-time workers and 3,600 full-time workers who worked part-time hours during the reference week for economic reasons (such as being stood down or insufficient work being available). Over one third (36%) of South Australia's workers who were underemployed were aged 15-24 years and more than three-fifths (61%) of underemployed workers were female.

As the vast majority of underemployed people are part-time workers, population groups with a high proportion of part-time workers, such as those aged 15-24 years and females, will naturally be over-represented in underemployment. Therefore, when analysing data for these particular subpopulations of underemployed workers, full-time workers who worked part-time hours during the reference week for economic reasons were removed, putting the focus of analyses on underemployed part-time workers.


UNDEREMPLOYED PART-TIME WORKERS

Of the 230,800 part time workers aged 15 years and over in South Australia in September 2006, 45,400 (20%) were underemployed.

When considering only underemployed part-time workers in South Australia, 15 to 24 year olds were over-represented in the underemployed population. Over one third (37.9%) of underemployed workers were aged 15 to 24 years, compared with 25.8% of the part time worker population.

When considering underemployed part-time workers in South Australia, females were under-represented in the underemployed population. The majority of underemployed part-time workers were female (29,400 or 64.8%). However, females constituted 74.4% of the entire part-time workforce.


Females were less likely to be underemployed than male part-time workers. Less than one-fifth (17%) of female part-time workers were underemployed, whereas over one quarter (27%) of male part-time workers were underemployed.

Underemployed part-time males were more likely to want full-time hours than underemployed part-time females. Of the 29,400 part-time females who were underemployed, less than half (48%) were interested in full-time work. Conversely, of the 16,000 part-time males who were underemployed, 76% preferred full-time hours.

The facts that females who work part-time are under-represented in the underemployed population (compared to the overall population of part-time workers), are less likely to be underemployed than male part-time workers and are less likely to want full-time hours than underemployed male part-time workers, suggest that women who work part-time are more likely to do so by choice, than men who work part-time.

CONCLUSION

Underemployment is an important consideration when assessing the utilisation of labour resources within the economy. Along with the unemployed, the underemployed workforce provides an indication of the unused labour capacity of a working population which is of particular interest in an apparent environment of labour and skills shortages. From the short investigation in this article, underemployment was a larger component of labour force underutilisation than unemployment in South Australia. While a large proportion of underemployed workers were female, they were under-represented compared to females in the overall part-time working population. More than a third of underemployed were 15 to 24 years old, proportionally more than 15 to 24 year olds in the overall part-time working population.


REFERENCE:

Underemployed Workers, Australia (cat. no 6265.0)