UNDERUTILISATION

Labour underutilisation (that is, unemployment and underemployment) has a significant effect on the people who experience it, on their families, the community and also on the economy. From a social viewpoint, there is concern that people whose aspirations for work are not being realised may suffer in a number of ways - personally, financially and socially. From an economic perspective, there is interest in the amount of spare capacity in the labour force for the future labour supply and its potential to contribute to the production of goods and services. The labour force underutilisation rate provides a more comprehensive view of underutilised labour in the labour force than the unemployment rate or the underemployment rate can do alone.

The labour force underutilisation rate rose from 8.9% in 1979 to 13.8% by 1983. After a peak in 1993 (17.6%), the labour force underutilisation rate declined steadily to 10.3% in 2008, reflecting the period of strong economic growth in Australia. It then rose three percentage points, to 13.3%, in 2009 following the recent global financial crisis.