7 March 2010

Comment on ABS unemployment and underemployment data

Noted in Australian Financial Revue in February was a series of letters that questioned the accuracy of the Australian Bureau of Statistics figures Unemployment and Underemployment.  It was an interesting exchange of views that appears worthy of reproduction.

 AFR 8 February 2010

Political definition of unemployment

David Lurie’s letter, “Underemployment must be addressed” (February 4), has missed the whole point of Australia’s employment-unemployment and under-employment figures.

Those headline figures in the monthly Labour Force series result from a political, not actuarial, definition of unemployment, and are foisted upon a very reluctant Australian Bureau of Statistics by both sides of the parliament.

Until the media stop letting both Labor and the Coalition off the hook and insist that they only use the annual ABS series: “Persons not in the labour force” figures that show that we have a real unemployment figure of at least 20 per cent or 2 million unemployed plus 700,000-plus underemployed, chasing about 100,000 vacancies, precisely nothing will be done by both sides about underemployment let alone unemployment.

After all, as the media have let both parties get away with counting a person who works only one  hour or more during the Australian Bureau of Statistics survey week as being employed, why should they care about unemployment/underemployment?

Marcus L’Estrange, St. Kilda Vic

AFR 10 February 2010

No ABS conspiracy on unemployment

Marcus L’Estrange (Letters, February 8) rightly notes that care needs to be exercised in understanding the labour force figures compiled by the Australian Bureau of Statstics, as is the case with all data.

 L’Estrange asserts that there is a conspiracy between the major political parties that forces the ABS to adopt a definition of unemployment that reduces the published numbers.

 There are usually many problems with conspiracy theories.  In this case, the key ones seem to be that the ABS is an independent body and that it adopts International Labour Organisation definitions.  It also publishes much more detailed figures than the headline ones to which L’Estrange takes exception.

 Would it be better if the ABS broke with international standards and produced figures that could not be compaed across countries?

Michael Walsh, West Ryde NSW

AFR 15 February 2010

Unemployment figures fall short on reality

I didn’t say or imply, Michael Walsh, that the Australian Bureau of Statistics is involved in a conspiracy (Letters, February 10).  My view is that there is a conspiracy between both sides of parliament to come up with a political definition of unemployment, not an actuarial one.

That’s why the Australian Bureau of Statistics, very reluctantly, conducts the monthly Labour Force survey.  As public servants they simply don’t have a choice.  They are certainly not independent.

Privately, many members of the ABS I have spoken to over the years laugh at the accuracy of the monthly Labour Force figures.  That’s why they produce the Persons Not in the Labour Force survey and also the Householders Survey in order to  publish reality, not fiction.

The former commonwealth statistician Dennis Trewin is quoted as saying that “the offical measure of unemployment does not reflect the true jobless rate”.

Why, then, would people disagree with him, rather than listen to what he has to say?

 I am well aware that the ABS uses concepts and definitions recommend (but not directed) by the International Labour Organisation, one of the specialised agencies of the United Nations.  My point is that these ILO concepts and definitions of unemployment are, in essence, designed for political purposes and to provide governments (here and overseas) with the most flattering figure.  They have nothing to do with reality.

Finally, how does Walsh “explain away” the fact there are 1.75 million Australians on one of the six different dole payments and a claimed unemployment number of 600,000?

The Americans are even worse than us in cooking the books.  Just look up


Marcus L’Estrange, St. Kilda Vic

AFR 17 February 2010

ABS data known for consistency

The Australian Bureau of Statistics upholds the quality of the full range of labour market statistics we produce despite Marcus L’Estrange’s  suggestion that “Unemployment figures fall short on reality” (Letters, February 15).

 Headline indicators such as monthly employment and unemployment data are important contributors to the analysis of economic conditions and the methods used in Australia are consistent with international practice and standards.  The strength of these measures is their consistency and relevance across different periods of the economic cycle, and in comparison with other countries.

 A more comprehensive range of labour market information is produced by the ABS through the Labour Force Survey and other survey sources, including aggregate hours worked, underemployment, underutilisation, etc.  These measures assist understanding of underlying issues and trends and the full range of data are relevant to both economic and social analysis.

On the matter of independence, the decision to undertake the monthly Labour Force Survey and related surveys is a matter that has been determined by successive Australian Statiticians, not by others.

Brian Pink, Australian Statistician

Australian Bureau of Statistics Canberra ACT#

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