Critical Times

Marcus L’Estrange, a teacher, ALP member and former CES employee who left after blowing the whistle on questionable unemployment figures, writes:

Henry Thornton’s economic analysis in Crikey largely fails as it is based on a false and misleading unemployment figure of 5%. There are many things wrong with the monthly or headline “Labour Force” (Australia) figure on which Henry Thornton bases his analysis.

Some examples are that advanced countries such as Germany and Singapore only count a person as employed if they worked 15 hours or more. In Australia you are counted as being employed if you work just one hour or more, paid and unpaid. About 400,000 Australians work between one and 14 hours. They are counted as being employed in Australia but in many countries they are counted as unemployed.

Henry Thornton does not tell the readers of the second set of unemployment figures, “Persons not in the Labour Force”, also produced by the Commonwealth Statistician and staff because they don’t believe the monthly definition/figure forced upon them by the political process – is based on an actuarial or real survey that shows a (real) 2 million or 20% level of unemployment, chasing about 155,00 vacancies, advertised and not advertised.

National definitions of unemployment do differ from the recommended ILO international standard definition. The national definitions used vary from one country to another as regards inter alia age limits, reference periods, criteria for seeking work/not seeking work, treatment of persons temporarily laid off and of persons seeking work for the first time. This, plus the tricks all governments get up to in cooking their monthly unemployment figures, makes comparisons between countries well nigh impossible and a fruitless exercise.

Secondly, 1.75 million unemployed Australians are on one of the five or six types of dole or unemployment benefits. This alone makes a mockery of the unemployment figure. Fudged unemployment figures are not the basis for economic analysis and a host of other matters such as immigration targets, aid to disadvantaged areas support for ABAs and above all, general economic planning

CRIKEY.com.au 17/7/06