The last 15 years or so have seen massive changes in work practices in Australia. The very notion of a full-time job has been challenged. The idea that someone works 7.2 hours per day for (about) 254 days a year is still the norm but there is far more diversity in employment now than there ever was before. This is all good.
Unfortunately, it makes historical comparisons difficult. There are more people with part-time jobs and it is difficult to compare that over time. Some people are very happy to work part-time, while others would prefer to work more. Of course, many full-time employees would like to work less. The point being that diversity makes generalisation difficult.
To try to better understand what is happening in the labour market we have been looking at the ABS series on Aggregate Hours Worked (table 19 Cat. 6202). At present that figure is at the long-run trend. What we have done is create a variable we call the “effective full time unemployment rate”. We calculate this making the assumption that all employees are full-time workers who work 7.2 hours per day for 254 days per year. We are able to calculate the number of full-time employees that would generate the total number of hours worked. By comparing this to the ABS data on the size of the Labour Force we are able to calculate what the unemployment rate would have been if all workers were full time employees.
Ash has updated the data using the latest ABS data on hours worked.
Below is an update of the national EFUR together with some detailed analysis at the state level. An important thing to keep in mind when looking at the following graphs is that the EFUR is a relative measure – it is not an absolute measure. In other words it should be interpreted relative to its past.
According to Chart 1 the EFUR indicates that national labour market conditions are worse than the pre-GFC conditions of the mid-2000s. In particular the EFUR seems to be hovering at rates consistent with the experience of the early-mid 1990s and 2001. The standard unemployment rate at these times was around 10 per cent and 7 per cent respectively. No doubt some of the difference between the alternative measures is attributable to changes to working conditions.