UNDEREMPLOYMENT

Lack of paid work can have a significant impact on the financial, personal and social lives of both individuals and their families. While there are some people who are entirely without work (the unemployed) there is also a growing number of people who are in work but who are underemployed.

Most of the underemployed are part-time workers who would like to work more hours, but this group also includes full-time workers who could not work their full-time hours for economic reasons. Over the last three decades the proportion of employed people working part time has risen from 16% to 29%, while over the same period the underemployment rate rose from 2.7% in 1979 to a high of 7.7% in 2009. Since 2000, there have been more underemployed people in Australia than unemployed.

The underemployment rate does not exhibit the same pattern as the unemployment rate during changing economic conditions. While both rates rise during economic slowdowns, the underemployment rate does not tend to fall during periods of strong economic growth. For example, the underemployment rate rose 2.9 percentage points between 1989 and 1993, while the unemployment rate rose 4.7 percentage points. However, while unemployment fell 6.4 percentage points during the period of largely uninterrupted economic growth from 1993 to 2008, the underemployment rate fell by just 0.8 percentage points.