Earn
How much is underemployment costing the Australian economy?
The latest government figures show Australia is heading towards an underemployment crisis, with a leading researcher stating we can’t afford to “snap back” when people are struggling to find full-time employment.
How much is underemployment costing the Australian economy?
The latest government figures show Australia is heading towards an underemployment crisis, with a leading researcher stating we can’t afford to “snap back” when people are struggling to find full-time employment.
According to a research paper from Per Capita, underemployment is costing the Australian economy as much as $24 billion due to lost wages, which would create $4.3 billion in income tax receipts.
“Underemployment has become one of the greatest drags on our economy, stifling wages and consumption, fuelling the productivity crisis, and ruining careers,” said research economist Matthew Lloyd-Cape, the paper’s author.
“We simply cannot afford to snap back to an economy where over a million workers cannot find enough hours.
“Tackling underemployment must be placed front and centre of the post-COVID economic reconstruction.”
National figures released by the Australian Bureau of Statistics (ABS) showed underemployment increased by 50 per cent, with 15 per cent of the Australia’s workforce now underemployed.
This leaves Australia’s labour force underutilisation rate at 19.9 per cent.
However, while the economic shutdown caused by COVID-19 has exacerbated the problem, over the last five years, Australia’s underemployment rate has been among the highest in the OECD.
This is leading to negative outcomes, with significant damage to livelihood and long-term economic outcomes for Australian workers being highlighted.
“For individual workers, eliminating underemployment would see a significant increase in their standard of living,” Mr Lloyd-Cape said. “For example, for already underpaid workers in the healthcare sector, wages forgone due to underemployment could be as much as $25,503 per year.”
The current COVID-19 slowdown also has the potential to cause “economic scarring”, the research paper said.
“Recessions typically cause deep scarring: for example, the incomes of low-income earners in the USA fell by 20 per cent during the 1980–82 recession and did not return to their pre-recession level until the late 1990s,” the report read.
Economic scarring not only affects employment status, incomes and economic security, it has significant implications for health and wellbeing.
“Levels of mental ill health increase during recessions, and mental health problems persist for workers who emerge from a recession with long-term reduced hours and income,” Mr Lloyd-Cape concluded.
About the author
About the author
Salary
PM implored to introduce ‘AviationKeeper’ to prevent further job losses
The aviation industry is calling on the government for additional support, as one of Australia’s hardest-hit industries continues to struggle through the COVID-19 pandemic. ...Read more
Salary
Why employees could be forced to get a COVID-19 vaccination
Employees are being warned that they may need to sign up for a COVID-19 vaccine or face possible termination, a lawyer has explained. ...Read more
Salary
50,000 Aussies back at work: ABS
Australia has added 50,000 new jobs for the month of December, with the unemployment rate falling from 6.8 per cent in November to 6.6 per cent, official stats show. ...Read more
Salary
Economists predict a further drop in unemployment
Economists are predicting further falls in the unemployment rate largely led by Victoria as it emerged from an extended lockdown, new research has revealed. ...Read more
Salary
Casual workers could lose $1k under new reforms
The opposition has claimed that the Morrison government’s plan to amend penalty rates could cost casual employees up to $1,100. ...Read more
Salary
Job vacancies surpass pre-COVID levels
The Australian economy is continuing to show signs of improvement, with job vacancies skyrocketing over the last quarter, official figures have revealed. ...Read more
Salary
Unions take Qantas to High Court over JobKeeper ‘misuse’
Aussie unions are taking their fight with Australia’s largest airline to the High Court following claims Qantas misused the JobKeeper payment to subsidise overtime payments, essentially robbing wor...Read more
Salary
JobSeekers urged to ‘turn off Netflix’ and work in regional Australia
The acting Prime Minister has urged unemployed Australians who are currently on JobSeeker benefits to "turn off Netflix" and look for regional work, as farmers struggle to find temporary foreign worke...Read more
Salary
PM implored to introduce ‘AviationKeeper’ to prevent further job losses
The aviation industry is calling on the government for additional support, as one of Australia’s hardest-hit industries continues to struggle through the COVID-19 pandemic. ...Read more
Salary
Why employees could be forced to get a COVID-19 vaccination
Employees are being warned that they may need to sign up for a COVID-19 vaccine or face possible termination, a lawyer has explained. ...Read more
Salary
50,000 Aussies back at work: ABS
Australia has added 50,000 new jobs for the month of December, with the unemployment rate falling from 6.8 per cent in November to 6.6 per cent, official stats show. ...Read more
Salary
Economists predict a further drop in unemployment
Economists are predicting further falls in the unemployment rate largely led by Victoria as it emerged from an extended lockdown, new research has revealed. ...Read more
Salary
Casual workers could lose $1k under new reforms
The opposition has claimed that the Morrison government’s plan to amend penalty rates could cost casual employees up to $1,100. ...Read more
Salary
Job vacancies surpass pre-COVID levels
The Australian economy is continuing to show signs of improvement, with job vacancies skyrocketing over the last quarter, official figures have revealed. ...Read more
Salary
Unions take Qantas to High Court over JobKeeper ‘misuse’
Aussie unions are taking their fight with Australia’s largest airline to the High Court following claims Qantas misused the JobKeeper payment to subsidise overtime payments, essentially robbing wor...Read more
Salary
JobSeekers urged to ‘turn off Netflix’ and work in regional Australia
The acting Prime Minister has urged unemployed Australians who are currently on JobSeeker benefits to "turn off Netflix" and look for regional work, as farmers struggle to find temporary foreign worke...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
