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Victoria's Record Underemployment - Article by Kelvin Thomson

The Intergenerational Report is used to claim that we don't have enough workers, and imply that we need more – either migrant workers or people working longer. The reality is the opposite. (Originally published on Kelvin Thomson's blog at http://kelvinthomson.blogspot.com.au/2015/03/victorias-record-underemployment.html.)

Victorian workers are struggling to find enough hours in record numbers, with our under-employment rate now at its highest level for almost forty years. 293,000 part-time workers are looking for and available to work more hours but can't get them. 9.5 per cent of Victoria's workforce is now classified as underemployed, the highest since the Bureau of statistics started keeping records in 1978.

So the real problem we have right now, not the imaginary problem we might have in the future, is nottoo few workers, but too many.

The Intergenerational Report's unsurprising and unremarkable finding that the population is ageing is used to claim that the workforce is constrained by the supply of workers, implying that there is work for all who offer themselves. As the figures above show, this is rubbish. It leads to a "blame the victim" approach in unemployment, welfare to work programs and job readiness training.

The Report is used to claim that population ageing in Australia will be a debacle. Will it?Helpfully, there are other countries with a noticeably older population than Australia, so we can compare our performance with theirs. The Queensland academic Jane O'Sullivan has done this in a chapter in the book "Sustainable Futures", recently published by the CSIRO.

Denmark, Sweden, Germany, Finland and the United Kingdom all have a much greater old age dependency ratio than does Australia. Between 2000 and 2010 Australia's population grew at three times the rate of Sweden, Denmark, the UK and Finland, twice the rate of Norway's, and Germany didn't grow at all.

So with our much faster population growth and our younger workforce, we would have outperformed those countries, right? Wrong. Germany and the UK had the same per capita increase in income in the 2000-10 period, and Sweden and Finland had much higher growth in per capita income. And every one of those five countries performed much better than Australia in terms of the percentage of income received by the poorest quintile. This is important – income inequality in developed nations is strongly correlated with worse physical health, mental health, drug abuse, imprisonment, obesity,violence, and teenage pregnancy.

As Jane O'Sullivan puts it, in stable populations like Germany, people retire with considerable savings, and give more to the next generation than they receive from them. Their retirement opens up recreational opportunities for them and a job opportunity for a young person. In contrast, the vibrancy claimed for a rapidly growing population is often that of the crowded market place with more buyers than sellers, where recreation is something reserved for elites and foreign tourists.

As said by William Grey, from the University of Queensland, growth is the problem to which it pretends to be the solution.

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