Unemployment has increased by 1.1 percentage points to 9.2% in October according to the latest Roy Morgan employment series data. This is 6% higher than the Australian Bureau of Statistics’ (ABS) seasonally adjusted unemployment rate of 3.5%.
According to Roy Morgan, the increase in unemployment was due to a decline in full-time jobs which drove overall employment down, although it said part-time employment hit a record high.
Roy Morgan CEO Michele Levine said the end of COVID-19 restrictions in mid-October will have a profound impact on the labour market going forward, as those contracting COVID-19 are no longer forced into mandatory isolation or eligible for government COVID-19 payments.
“The ending of the mandatory period of isolation means businesses are now less likely to hire additional employees to fill vacancies created by the forced periods of isolation,” Levine said.
“The latest Roy Morgan employment estimates for October show the workforce contracting by 77,000 in the month as overall employment fell by 237,000 to 13,468,000.
“The drop was driven by a decline in full-time employment of 309,000 to 8,572,000 - although part-time employment increased for the fourth month in a row, up 72,000 to a record high of 4,896,000."
Levine cited that the drop in overall employment also led directly to a rise in unemployment, up 160,000 to 1.36 million.
“There is an even larger cohort of 1,554,000 Australians now under-employed, equal to 10.5% of the workforce.
“Taken together, overall unemployment and under-employment is now at 2,916,000 (19.7%) – the highest it has been since February 2021.”
Throughout the year, over 10 million cases of COVID-19 have heavily distorted employment numbers due to mandatory isolation rules, according to Levine.
She said the early indicators from Roy Morgan estimates show overall employment falling, indicating that business are perhaps adjusting to the removal of pandemic restrictions by letting go of employees hired as ‘covers’.
“Although these results suggest the end of mandatory COVID-19 restrictions will lead to less pressure for businesses to hire workers as cover,” Levine continued, “the strong labour market throughout 2022 provides a counterargument that any drop in employment is likely to only be temporary.
“Looking forward, the current month is the first since February 2020 during which COVID-19 related restrictions will not have a direct impact on the labour market.
“However, other influences such as increasing inflation, interest rates and supply chain challenges caused by extreme weather events are set to be key factors driving employment outcomes during the upcoming year.”
In total, 2.92 million Australians (19.7% of the workforce) were either unemployed or under-employed in October, up 152,000 on September – the highest overall figure for over 18 months since February 2021.
Compared to early March 2020, before the nation-wide lockdown, in October 2022 there were more than 850,000 more Australians either unemployed or under-employed (+4% points) even though overall employment (13,468,000) is around 600,000 higher than it was pre-COVID-19 (12,872,000).
According to Roy Morgan, their under-employment figure of 10.5% is over 4 percentage points higher than the ABS estimate of 6% for September.
However, it reported that the ABS figures for September show there were 568,400 workers who worked fewer hours than usual due to illness, personal injury or sick leave compared to an average of 478,000 for the month of September over the five years from September 2017 – September 2021.
The research firm said this difference in the numbers of people who worked fewer hours, which can be put down to the Omicron variant, equates to a difference of 90,400 in September 2022 above the average for the month of September for the previous five years.
If these workers are added to the approximately 846,000 workers that the ABS classifies as under-employed, Roy Morgan said, this creates a total of 936,400 – equivalent to 6.6% of the workforce.
Regarding the ABS unemployment rate of 3.5% (or 499,400 workers) and its underemployed rate of 6.6% (or 936,400 workers), Roy Morgan said that when they are combined, these figures add up to 1.44 million workers, or 10.1% of the workforce.
The Roy Morgan survey on Australia’s unemployment and under-employed is based on weekly interviews of 866,037 Australians aged 14 and over between January 2007 and October 2022 and includes 7,404 telephone and online interviews in October 2022.
Roy Morgan’s ‘under-employed’ measurement are those people who are in part-time work or freelancers who are looking for more work.
According to the ABS website, people who are ‘not in employment’ are “those who should not have undertaken any work at all (not even for one hour) during the reference period, nor should they have been temporarily absent from a job to which they have a formal attachment.
“Where the reduced questionnaire module is used, all persons absent from work, but who usually work one hour or more a week, are classified as employed.”