2007-11-13

Australia's Non-employment rate

This is something I've created - it's a way of measuring unemployment based not just upon those without work but also upon those who are not in the workforce. This latter phenomenon is called the Participation Rate.

Australia's participation rate is around 65%. That means that 65% percent of people who could work are either working or looking for work. It also means that 35% of people who could work are neither engaged in paid work nor are looking for work.

Whenever the monthly employment figures come out, it is always important to check the unemployment rate against the participation rate. If unemployment increases around the same time as participation increases, it means that more people have decided to look for work and that increase in people affects the unemployment rate.

If you make an arbitrary line at 70% and say that 70% is the ideal participation rate, then here are the stats for Australia's "Non-employment" rate (Based on 6202.0, Labour Force, Australia)


Australia 4.3% Unemployed, 65.0% Participation = Non-Employment rate of 9.3%
NSW 4.6% Unemployed, 63.2% Participation = Non-Employment rate of 11.4%
Victoria 4.3% Unemployed, 64.7% Participation = Non-Employment rate of 9.6%
Queensland 3.8% Unemployed, 67.3% Participation = Non-Employment rate of 6.5%
South Australia 5.4% Unemployed, 63.1% Participation = Non-Employment rate of 12.3%
Tasmania 5.7% Unemployed, 60.9% Participation = Non-Employment rate of 14.8%
Western Australia 3.6% Unemployed, 68.7% Participation = Non-Employment rate of 4.9%
Northern Territory 4.6% Unemployed, 73.6% Participation = Non-Employment rate of 1.0%
ACT 2.5% Unemployed, 72.2% Participation = Non-Employment rate of 0.3%

Interesting figures. Western Australia is obviously enjoying its mining boom while both the Northern Territory and the ACT - both small in population - nevertheless have very high levels of employment. Tasmania's unemployment - which reached a (20+ year) low of 4.9% in September still has the lowest participation rate of any state in Australia, thus making it the worst place for employment. South Australia is struggling, but look at NSW - once the "premier" economic state it appears as though the other states have overtaken it. Given that the housing boom first started in NSW, it now appears as though the effects of the boom are over now - and that the boom never really delivered good levels of employment (unlike mining, of course, which is why WA is so good at the moment).

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